afaqs!

Radio Mirchi eyes small towns and cities

By , agencyfaqs! | In | October 08, 2003
The Bennett & Coleman-promoted Radio Mirchi plans to move into smaller towns and cities as the Government readies itself for the second round of FM privatisation


Radio Mirchi, promoted by Entertainment Network India Ltd, part of Bennett & Coleman, hopes that the radio committee formed with the active cooperation and support of the I&B Ministry, will focus on phase one towns (towns and cities opened for licences in the first round of bidding) as well. The committee headed by the secretary general of FICCI Amit Mitra, is working towards providing recommendations to the Government on the second phase of FM privatisation. "We are hoping that the task force looks at phase one towns too," says Prashant Pandey, COO, Radio Mirchi. "Strictly speaking, the committee will concentrate on phase two towns only. However, we are hopeful that the committee could consider looking at current operations as well," he says.

Primary on the committee's agenda is to provide recommendations on a revenue share model, which, according to media reports, may be finalised at 3 to 3.5 per cent. Licences for up to 70 towns and cities will be up for grabs in the second round, which comes after nearly three years since the first round when 108 frequencies across 40 cities were open to bidders.

From a viability point of view, Pandey asserts that looking at current operations makes sense since these stations have the potential to contribute significantly in terms of revenue. "Currently, one cannot even think of achieving a specific target," he says.

Licence fees for the metros of Mumbai, Delhi, Chennai and Kolkata is Rs 11.25 crore, Rs 7.125 crore, Rs 1 crore and Rs 3.3 crore respectively while Bangalore and Lucknow touch Rs 9 crore and Rs 7.34 crore respectively.

The station, meanwhile, is looking to expand reach with the onset of the second round of bidding. According to Pandey, likely additions to the existing network, which comprises Mumbai, Pune, Delhi, Kolkata, Chennai, Indore and Ahmedabad, could be Bangalore, Chandigarh, Jaipur, Surat and Kanpur-Lucknow. "These are some of the obvious markets we have in mind," he says.

In the case of smaller towns, the station is monitoring their business potential since dependence on local advertising is significantly higher in these markets. "National-level advertisers may not want to pitch their products and services in such markets," points out Pandey. "Hence the potential of local advertising has to be gauged first," he says.

Currently, Radio Mirchi has a daily urban reach of 10 million people with the addressable population pegged at 160 million. Demographically, the station targets the 15-34 age group in socio-economic classes A and B and is positioned at the "young at heart". © 2003 agencyfaqs!

Search Tags