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Vineeta Mishra in New Delhi

India's radio broadcast sector, hitherto state-controlled and reeling under the onslaught of television and cable, is all set to witness excitement. The recent Union Cabinet decision to open up the market is expected to force national broadcaster All India Radio and a clutch of private channels to vie for people's ears, so to say.

Industry analysts say FM (FM = frequency modulation) radio is bound to be a potent medium, given the healthy sales projections of companies peddling car stereos, hi-fi music systems, Walkman-type personal radio/casssette players.

Action is not going to be limited to setting up private FM stations -- some 150 of them are expected to sprout all over the country. The move will spawn a new business in India: ancillary services that will supplement the industry. Small wonder, entrepreneurs are already salivating over the business potential.

One such service, Digital Broadcasting Inc, has already set up shop in Delhi. On July 6, the Union government had announced that frequency slots would be auctioned to private companies in 40 cities. In anticipation of the government's decision, the company was set up three months ago.

"There is a lack of trained professionals with expertise in FM radio broadcasting in India. Prospective investors don't know where to begin in order to start an FM station. We foresee a huge market," says Rajeev Mishra, chief executive officer, DBI.

DBI is the sister concern of the Rs 200 million Mishan Flora, whose chairman is former Tisco chief Russy Modi.

According to Mishra, DBI would offer turnkey services -- commissioning of the FM radio station, recruitment and training of staff, softwared development, selection, procurement and commissioning of hardware.

"We are already working on 11 FM stations, which should be ready by December," says Mishra.

Providing technical expertise would be visiting experts having long years of experience in broadcast industry. Belonging to the US, Canada and Europe, the experts are associated with the Switzerland-based International Academy of Broadcasting.

Mishra says China and India would be the world's biggest revenue earners in broadcasting. "There are two reasons," he explains. "One, the large populations; two, only simple infrastructure is needed to start an FM venture. Broadcasting through air doesn't need roads to lay cables, etc." The logic is that entrepreneurs will find this avenue attractive, given the popularity and clout the mass media enjoy in India. "Radio receiver sets are ubiquitous, be it in suburban railway trains, college campuses, or cattlesheds," points out an industry observer.

DBI is planning to help entrepreneurs/companies launch FM radio stations in 40 cities. According to Mishra, the company is targetting 50 potential investors who have evinced interest in the medium. It also plans to launch its own channel by early 2000, besides seeking to emerge as the largest provider of FM radio software.

How much it takes to set up an FM station is not something that Mishra wants to discuss. "Companies in India could break even in the second year of operations," he says.

He points to the fact that in 1998-99, radio advertisement revenues touched Rs 1.44 billion. The figure, he says, could rise by 250 per cent in a couple of years. "Local shopkeepers and traders would be the main beneficiaries of local FM as advertisement costs would be marginal. There is a huge potential. With constant technological upgradation, the cost of technology will be very low."

Other plans in the company's agenda include setting up an academy for training in the broadcast medium in Delhi, in association with the Swiss academy. "Since FM was the monopoly of the government so far, there are no training institutes in India. And since this is going to be one area which is going to grow phenomenally, there is need for such an institute," says Mishra.

It is not the private sector alone which is active. The autonomous Prasar Bharati's All India Radio has relaunched Yuva Vani as a youth channel on FM radio.

The move is aimed at reviving listenership that has been sagging due to proliferation of television channels over the past decade.

Yuva Vani, which had commenced in the early 1970s on medium wave or MW, is currently broadcast from Delhi and Calcutta. From August 15, it is being aired on the FM band.

AIR has ensured that FM broadcast quality does not get affected due to interference from transmissions on MW.

Analysts say the scene is bound to hot up once foreign investors enter. However, the field will be restricted to Indian companies though equity from foreign institutional investors will not treated as a disqualification. However, equity from any other foreign investors apart from financial investors has been barred.

The number of channels will vary depending on the city. In Bombay, Delhi, Madras and Calcutta, 12 slots will be auctioned. Around 150 new FM channels are expected to come up in the wake of privatisation.

The slots will be auctioned on the basis of an entry fee and revenue sharing system. There will also be a cap of one licence per operator in a city.

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