How radio can grow: FICCI

02 Mar,2016


Presenting policy recommendations for the growth of radio broadcast sector in India, as per FICCI. Excerpts


1. Restriction on ownership of licenses

Current policy Regulation

A permission holder cannot run more than 40% of the total channels in a city subject to three different operators in the city.


No entity shall hold permission for more than 15% of all channels allotted in the country excluding channels located in Jammu and Kashmir, North Eastern States and island territories.


While such policy restriction may have been designed to address concern around creating monopoly and promoting competition, such policy restriction is actually prohibiting the Industry players to leverage economies of scale and holding them back from making greater investment in technology and content. The Industry believes that there may have been sufficient rationale for such restrictions when the Radio Industry was in its infancy stage.


However, as the Industry has matured, it is right time that such regressive regulations can be removed to allow the Industry players to scale up their operations and technologies. The Industry bonafide believes that there are sufficient regulations and regulatory bodies such as Competition Commission of India (CCI) which can address the concerns of creating monopolistic market or other unfair trade practices. In view of the above, it is humbly submitted that the government should reconsider its current policy and remove all such arbitrary caps.



It is recommended that the cap on ownership be removed such that national players and strong regional player can emerge that can consolidate operations, bring in economies of scale to the industry, reach grass roots level and acquire more frequencies.


2. Three Year Lock-in Period

Current Provision

The current policy mandates that the shareholding of the largest Indian shareholder in a Radio Broadcasting company cannot be reduced below 51% till a period of 3 years from the date on which all the channels allotted to the company holding permission stand operationalized.


Existing Radio Broadcasters have already served a lock-in period in previous regime of Phase I and/or Phase II. Further, Phase III imposes a fresh lock-in from the date of operationalisation of all the channels which could possibly extend during batch II auctions.



It is recommended that the said condition for three year lock-in period should be waived for new allotments done in Phase III to the existing radio broadcasters as such broadcasters have already served the lock-in period in earlier phases. Additionally, lock-in should not apply to Phase I and/or Phase II broadcasters who have migrated into Phase III. The Lock-in period should be imposed only once.


3. Sourcing of news & current affairs

Current Policy Regulation

Based on the current regulations, the permission holder will be permitted to carry the news bulletins of All India Radio (AIR) in exactly same format unaltered. Consequently, exclusive radio interviews, debates and content sourcing from any other source are not allowed. In the current age of internet access and converged media platforms, access to news and information has become unrestricted. Under phase III, the medium will penetrate deeper into the newer cities.



Radio being a free to air medium for masses should not be restricted in terms of sourcing of news and information. It should be considered as the primary medium for dissemination of information at national and local level which will assist in formation of pluralistic opinions and higher awareness amongst listeners.


Similar to television, radio industry should be liberalized to broadcast independent debates and local news sourced from any wire services, or independently, as they desire. Standard rules of checks and balances as applicable to other news media should apply to FM radio as well.


4. Service Tax/GST levy on Advertisement

Advertisement on radio is liable to Service Tax levy. Radio competes with newspaper at local level. There is no levy of service tax on advertisement in newspaper. It is recommended to remove service tax on advertisement in Radio to provide level playing field to Radio. It is recommended that Services Tax and GST should be lowest in radio as it is a free to air medium.


5. Auction Rules

In the first Clock Round, the Auction Activity Requirement (AAR) will be set at 80%. Subsequently, the Auction Activity Requirement will be increased in two steps as the Auction progresses, from 80% to 90% and then to 100%.


In Phase III Batch I Auctions, the AAR went to 80- 90 % after many rounds and then arbitrarily to 90 -100% after many rounds which led to gaming, parking and artificial rate increase.



It is recommended that the increase in AAR should be in accelerated manner in Phase III Batch II auctions. AAR of 100% should be reached after a few rounds of 80% and 90%.


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