Radio players seek uniform laws, higher FDI & tax relaxation from Budget

Courtesy: www.exchange4media.com

Writer: Abhinn Shreshtha - Wednesday, Jul 09,2014 8:21 AM

The private FM radio industry has complained for years, and with good cause, that the government has never helped them. The recent few months have promised a glimmer of change and radio players are hoping that 2014 will not be another year in the long annals of false promises.

With the Phase III transition and hence a new stage in private FM expansion in India on the cards, it is understandable that FM players expect policies that will allow a smoother transition to Phase III and pro-growth policies from the Union Budget.

For example, one of the chief issues is the case of FDI, which radio operators feel should be on par with other mediums. In fact, this is an issue that has been consistently raised by radio operators; questioning a different set of rules for radio as compared to other mediums (a case in point being the issue of news broadcast).

The current FDI level is set at 20 per cent. TRAI, in its set of recommendations, released earlier this year, suggested that this should be increased to 49 per cent.

"The Phase III policy when activated allows 26 per cent. The industry will be happiest with 49 per cent without FIPB approval. Above 49 per cent is not likely to be accepted by the Govt. Already the delays in activating Phase III are huge and financial investors directly correlate sectoral risk with the delays," said Vineet Singh Hukmani, MD of Radio One.

Ashwin Padmanabhan, National Head, 92.7 BIG FM also said that a relook at FDI was important. When asked whether the industry would be happy with the TRAI suggested percentage of FDI, he said that there was no reason why non-news FM should not be allowed 100 per cent FDI. "We can understand if the government does not want to allow FM channels that broadcast news to have 100 per cent FDI but non-news FM should be allowed that. FM radio needs whatever applies to other mediums," he said.

Prashant Pandey, MD & CEO of ENIL, gave a simple explanation. According to him; between Phase III auctions, renewal of Phase II licenses and auctions resulting from channel spacing halving to 400 KHz, broadcasters will need to pay up anywhere from Rs 3000 to 5000 crore. "For the FM radio industry which has been bleeding for long, this kind of investment is impossible. Foreign players on the other hand might be keen to enter the Indian market, and may be willing to invest. So opening up FDI to 49 per cent is a good idea," he said.

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