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Richa Mishra
Nithya Subramanian

New Delhi , Nov. 15

THE loss-making private FM radio companies may just get to see better days.

The Expert Committee on FM radio is set to recommend the telecom model for companies migrating from the existing licence-fee regime to a revenue-sharing arrangement with the Government.

According to sources, the committee has suggested that FM companies pay a migration fee before switching over to the revenue share arrangement.

In the telecom sector, the highest entry fee was taken as the migration fee. Once the migration fee was paid, the revenue-sharing arrangement came into effect.

Informed sources said that revenue-sharing would be a percentage of the gross revenue. However, industry sources pegged the percentage to be around 4 per cent of the gross revenues.

Private FM players have been incurring losses to the tune of Rs 120 crore on total revenues of just Rs 47 crore for the last fiscal. A major portion is because of the high licence fee. The total licence fee paid to the Government, so far, is Rs 75 crore.

Companies, for instance, have paid Rs 9.75 crore as licence fee for Mumbai, Rs 7.12 crore for Delhi, Rs 1 crore for Kolkata and about Rs 3.3 crore for Chennai and these go up by 15 per cent each year.

However, radio attracts just 1.5 per cent of the Rs 8,600-crore advertising pie.

Among the other recommendations, the committee, which is slated to submit its report on Monday, is likely to suggest 26 per cent foreign direct investment into the radio business.

Currently, foreign institutional investors can hold up to 20 per cent in private FM radio companies.

Also, the committee is likely to suggest allowing news in private FM radio channels. So far, only All India Radio could broadcast news and current affairs shows.

The Government had set up a 10-member task force headed by Dr Amit Mitra, Secretary General, Federation of Indian Chambers of Commerce and Industry, to suggest changes to the existing FM radio norms.

Some of the major players which have commenced operations are Living Media's Red FM, Times Group's Radio Mirchi, Ispat Group's Radio City and Sun Group's Suryan.

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