Interference of FM radio waves in smaller towns coupled with non-viability of radio business may derail the plans of the ministry of information and broadcasting (I&B) to kick-start the third-phase of private FM radio (FM-III) next month.
The wireless, planning and coordination (WPC) wing of the communications ministry says a large number of the 790-plus FM frequencies listed for FM-III across 230 towns will not be able to work due to close geographical proximity to neigbouring smaller towns thereby resulting in the interference of radio waves. As a result only a limited number of FM frequencies may actually come up for auctions, says WPC.
?We have informed the I&B ministry that they may conduct a study to see the feasibility of FM radio spectrum across all the towns as allocation of all the listed frequencies may not be possible to successful bidders post the auction process,? a source in the WPC wing told FE on condition of anonymity. WPC, the national radio regulatory authority, responsible for frequency spectrum management including licensing and caters to the needs of all wireless users, both government and private within the country.
The FM radio waves work in a radius of 90-120 km while a large number of towns listed under FM-III are within the range. The FM radio works in the 88 MHz- 108 MHz frequency band that also mandates fixed spectrum to All India Radio, certain police frequencies among others.
Technical experts say not more than 40-45% of the overall FM-III frequencies can actually be allocated for commercial use. ?Not all frequency will get auctioned in FM-III going by the past experience of FM-I and FM-II. And it is a fact that smaller cities can not take more than two frequency depending on their geographical location and distance from adjacent towns,? said KRP Verma, former CMD of Broadcast Engineering Consultants India Limited (BECIL), a profit-making public sector enterprise under the I&B ministry.
However, the existing FM radio firms are sceptical and say not more than 70-80 stations are worth investments under FM-III. Currently, there are 250 private FM radio stations operated by around 40 companies with most running in financial loss due to high input costs and lower returns.
?At present, almost all of FM-III is unviable due to high music royalties paid by the existing radio stations to the music companies,? he added.
?Currently, the annual music royalty is to the tune of Rs 30-50 lakh. In our view, that?s more than even the revenue potential of the entire town itself for radio. The correct royalty figure should be in the region of a few thousand rupees for a town of 100,000-300,000 population,? said Prashant Panday, CEO, Radio Mirchi and senior vice-president of the Association of Radio Operators for India, the apex body of private radio firms.