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Radio City to invest up to Rs 400 cr on FM service expansion

Radio City

Radio CityNew Delhi: Private FM operator Radio City plans to invest up to Rs 400 crore to double its stations to 40 after Phase III auctions later this year and renewal of current licences.

“We would be doubling after radio station to up to 40 from our present 20 stations after the Phase 3 auctions,” Radio City CEO Apurva Purohit told.

On the investments for the new stations, she said: “It would take around Rs 300 crore to Rs 400 crore. This would also include licence renewals of old stations”

The leading FM radio broadcaster will spend on average Rs 20 crore per station on raising new infrastructure.

The Information and Broadcasting Ministry is planning to get over 200 more cities covered by private FM channels under the phase-III expansion for which over 800 FM channels will be auctioned across cities.

Auctions are expected to be completed by December.

“After getting delayed for almost three years, now things are moving in last 3-4 months under the regime of the new government. Lots of work is now happening on that front,” Purohit said.

She added that the ministry has also accepted the recommendations of the sectoral regulator TRAI on increasing licence period as well as the migration fee formula.

On the time that Radio City would take to raise new infrastructure, Purohit said: “If we get government support in terms of infrastructure as towers etc, then we would start in 3-5 months. If not, then it would take 9 months and above… Earlier we took more time to raise infrastructure but now as we have experience, it would not take more than three months.”

New radio stations would break even in up to three years and recover the cost of investment as the radio FM industry is working on good margins, Purohit.

“The industry is having margins of 35 per cent and the new stations would break even and pay all debts and liability in less than three years,” she said.

Radio City is promoted by Music Broadcast Private Limited (MBPL) owned by private equity firm IVF Holdings Pvt Ltd.

It is present in 20 cities: Mumbai, Delhi, Bangalore, Chennai, Ahmedabad, Pune, Hyderabad, Lucknow, Jaipur, Vadodara, Surat, Sholapur, Nagpur, Sangli, Coimbatore, Vizag, Ahmednagar, Akola, Nanded and Jalgaon.


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