India has 867 commercial radio stations, including AIR, now called Aakashvani. It has phenomenal reach and is a hyper-local medium. Local retailers contribute 50-70 per cent to the radio operator’s ads.

India’s radio business has been severely affected by the pandemic, the emergence of streaming music and a host of structural issues.

Radio listenership and volumes of radio advertising have risen. However, its share in total advertising fell down, from 3.5 per cent to 2 per cent in 2020, and have stayed as it is.

Advertisers do not see radio as a strategic medium for frequency or reach. Radio operators have taken to event organisation, and this contributes 20-40 percent of their top line.

Telecom Regulatory Authority of India (TRAI) has made some recommendations to revive FM radio.

1.There are two fees for FM operator. One time non-refundable entry fee and licence fee. The licence fee is at 4 per cent of gross revenues (including GST) or 2.5 per cent of the one-time entry fee for a city. To illustrate, if the highest bid for a city is Rs.169 crore, the licence fee would be Rs.4.2 crore.

TRAI now recommends that licence fee should be delinked from non-refundable one-time entry fee. It should be calculated as 4 per cent of gross revenue (not including GST). If the license fees are rationalised, it will help the medium to become cost effective.

2.The government should support those operators who have been affected by pandemic.

3.Operators will be allowed to broadcast news and current affairs for 10 minutes per clock hour. This will bring advertisers.

4. Mobile phones should have their receivers active for FM reception. This should be made mandatory. Telecom companies disable the receivers on handsets to promote their own music streaming service. FM radio can reach over a billion mobile users. The current listenership can easily double.

Let us see whether the ministry accepts those proposals.