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FM players welcome Budget announcement on Phase 3 licensing

The government proposes to expand private FM radio services to 294 more cities. However, the higher duty on STBs has not gone down well

BestMediaInfo Bureau | Delhi | March 1, 2013

In order to encourage domestic production of set-top boxes (STBs) as well as for value addition, Finance Minister P Chidambaram yesterday announced in his Budget 2013 a doubling of customs duty on STBs. Now the duty will be increased from 5% to 10%. However, the Finance Minister also brought some cheer for the FM radio industry with the announcement that the government proposes to expand private FM radio services to 294 more cities.

The additional import duty on STBs would make them more expensive for consumers as the country moves towards full digitisation. Ankur Jain, Managing Director, Jain Hits, commented, "With the government's decision to increase the import duty on set top boxes, consumers will now have to pay more for them. The decision stands against government's own objective of making it mandatory for each home to have a set-top-box as the country goes in for digitisation. Since there is no capacity available in the country to manufacture them, it becomes inevitable to import the set-top boxes."

On FM radio services, the Fianance Minister said that about 839 new FM radio channels will be auctioned in 2013-14 covering 294 cities and towns. And, after the auction, all cities having a population of more than 100,000 will be covered by private FM radio services.

Vineet Singh Hukmani

Vineet Singh Hukmani, MD, Radio One, said, “We are happy that the Finance Minister has committed to Phase 3 of FM licensing in the budget with a special focus to spread FM radio to the smallest C and D towns. This is a smart move by the government in a difficult economic situation as the chances of success in lower-reserve-price small markets are higher. Furthermore, metro licenses even in telecom spectrum bidding have not thrown up any buyers due to their exorbitant prices and huge competitive pressure in metro cities. The next move that the ministry should make is allow migration of existing players  to Phase 3 and signing of GOPA to allow 26% FDI, networking and a level playing field with AIR and other media.”

Tarun Katial

Tarun Katial, CEO, Reliance Broadcast Network, commented, “The budget brings good news for the radio industry, with Phase III poised to create optimal reach for the medium. Other benefits like news, networking, current affairs and sports, multiple frequencies, etc., will add the necessary fillip to further fuel listenership growth through reach and content diversification and will also drive profitability and revenue through cost optimisation. With deeper penetration, radio can play a key role as a catalyst of social transformation through partnership for CSR initiatives, social causes and government initiatives as it reaches where no other medium can because of literacy and cost issues. With expansion to 300+ cities, it stands to reach 90% of the Indian population, making it a truly common man’s medium!”

Apurva Purohit

Apurva Purohit, CEO of Radio City, said, “We welcome the announcement of Finance Minister on the government’s resolve to expedite Phase 3. This impetus would help FM radio expand and offer the choice of consuming private FM radio to millions living in smaller towns. We are looking forward to the same.”

Prashant Panday, CEO, ENIL, welcoming the announcement, said, "We are happy that the Finance Minister announced the imminent launch of Phase 3 of radio expansion. With this, we hope all hurdles to the launch of Phase 3 are now removed. We hope quick action follows this announcement."

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