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Boby Kurian
Nithya Subramanian

"We are likely to bid for licences in some circles, mostly in the South."

Bangalore/New Delhi , July 21

MR Rajeev Chandrasekhar is surveying the FM radio space. The former Chairman and CEO of BPL Mobile, who unlocked personal wealth topping Rs 1,000 crore by selling his cellular operations to Hutchison Essar, is expected to participate in the second phase of bidding for FM licences catering to the Southern markets.

Informed sources said Mr Chandrasekhar has been rejigging his plans in the FM radio space with the Government preparing ground for the second phase of FM radio privatisation. "We are likely to bid for licences in some circles, mostly in the South," sources said.

This is, however, not Mr Chandrasekhar's first tryst with radio. About five years back when the Government opened FM radio to the private sector, Mr Chandrashekar's BPL Innovision, had bid for Bangalore and Kochi circles under Radio Indigo. However the radio channels did not take off.

"We had built a team behind Radio Indigo, and had serious intentions at that time. But as the bidding went haywire and we pulled out (after the Bangalore circle was quoted at Rs 15.5 crore and Kochi at Rs 7 crore) along with other private players," sources added.

Later, Radio Indigo was available on the satellite radio platform through the WorldSpace network for nearly four years. That association also came to an end in March this year. "We did not get the desired penetration and found it difficult to support it with viable advertising support," sources said.

It must be mentioned that media and entertainment, along with tourism and aviation, is a sector under Mr Chandrasekhar's scanner for future investments. And bidding for FM licences, though a relatively smaller investment, could mark his initial moves after exiting the telecom business, which he built from the scratch since 1995.

The Government's new policy on FM radio is targeted at increasing competition and attracting more players in the sector. During the first phase, out of 40 cities and 108 frequencies, services started in only 14 cities. A total of 37 licences were issued out of which 24 are operational.

Hence it has decided to move from the licence fee regime to a 4 per cent revenue share arrangement with a one-time entry fee. The net worth criteria would range between Rs 50 lakh to Rs 10 crore for companies bidding for different centres.

The Government has permitted 20 per cent foreign direct investment. About 336 channels would be available for bidding, which includes both the metros and the smaller towns as well.

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