Business Standard: The Indian government has allowed 20 per cent foreign direct investment in the FM radio sector. It has also replaced the licence fee regime with a revenue share of 4 per cent a year.
However, the ban on news and current affairs programmes will continue in FM radio. Thus far, the only foreign investment allowed in private FM radio companies was foreign institutional investment up to 20 per cent of equity. The operators will now have to pass on 4 per cent of their revenue every year to the government.
The current regime is based on city-specific licence fee – Rs 15 crore ($3.5 million) for Delhi, Rs 12.5 crore ($2.9 million) for Mumbai, Rs 7.5 crore ($1.7 million) for Chennai etc. – which increases 15 per cent every year. Those who have defaulted on licence fee payments will not be black-listed.
It’s to be noted here that the government has gone against the Indian telecom regulator’s view that 100% FDI should be allowed in FM radio.
Meanwhile, in the wake of the new FM radio policy, the private broadcasters are planning to expand their services to other cities. According to this story in Business Standard, quoting a KPMG report on the Indian media, the radio industry in India generated revenues of around Rs 220 crore ($52 million) annually and would grow to Rs 800 crore ($190 million) by 2010. The report states that India has an estimated 180 million radio sets and commercial radio has the potential to account for 8 per cent of the media spends in the short and medium term to 10-12 per cent in the long run.
Related: Foreigners May Be Allowed To Invest 20% In Indian FM Radio
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