Guest article: Vineet Singh Hukmani: IRF is also going through Phase 3!

Okay people, here it is again, that part of the year where the IRF comes back to India to tell us what we already know -- that the 'radio industry is happening'. What IRF does not know, like the rest of us is... 'when is it happening?' And, while we don't know what we don't know, at IRF, we even discuss what we don't know and award ourselves in the process. How cool we are! And, yes, welcome to the new international faces which get to discover that the 'Indian Radio Forums' are buzzing, if not the industry.

First, let's unravel the mystery of IRF.

I then got 'Island Resources foundation' -- the Resources Foundation's website features environmental information useful to the sustainable development of small tropical islands. Wow, I thought, at least someone protects those wonderful tropical islands. And then, there was 'Internal Rafting Federation' -- which is about bringing the world of rafting together, so we can all benefit from our interaction.

And then, after some 25 pages of Googling, I found the 'India Radio Forum'... talk about being digitally adept... so, their site lists 10 questions in its overview (no one has the answers, that's the fun part), which it has been listing the same way since the last three years!

It then dawned upon me, that the IRF is also going through the Phase 3 standby mode, just like the radio industry. (And, this time, there is the new buzz word 'interactivity'. Don't you just love it when someone uses a word as a diversion and almost succeeds?) So, why can the IRF afford to be stuck?

Well, that's because of us. We need to create a sense of dialogue so as to drown out the desperation of being stuck, and IRF is the saviour in this 'noble' endeavor.

So, let us sample some 'interactivity' that is likely at the event... 'Phase 3 is coming, blah, we will have new licences, blah, there will be a fight when the word e-auctions is mentioned, there will be murmurs when multiple frequency is mentioned, and then, someone will say the word 'government', and everyone will look around... why? Because, there will be no government representative. It's like you hear these loud noises when a bus stops... and then, you see the driver has left the bus to relieve himself... everyone looks at each other sheepishly!

Then, there will be the standard battle of RAM versus IRS accuracy, and one small town player will challenge a large market leader, saying that IRS is better than RAM, and finally, everyone will join in saying 'yes, yes, we must get a proper monitoring system'. Yawn... Don't you hate it when a good fight turns to friendship so soon?!

And then, the best word will crop up -- 'digital'. Last year, it was 'activation'... and, one player will say it's conquered mobile phones, and another will say it's conquered a planet, and there is one player which has launched TV, outdoor and many other bouquet media, making radio itself peripheral in its portfolio! And yes, there will be silence when return on capital is mentioned, because we know 10 years is not enough to get a healthy ROI. Have we resigned ourselves to the fact that 'ye sab chalta hai' ?!

In fact, the Radio industry can learn something from IRF. The IRF is profitable. No one gave them a licence to do this. It has a definite return on capital every year, otherwise they would not get away with the undifferentiated repetitiveness.

What should the industry be doing instead of making futile attempts at discussing previous discussions?

AROI needs to be more aggressive and challenge the I&B (Information and Broadcasting) ministry, using CCI (Competition Commission of India). CCI is a specialist in laws related to competition, monopolies, and level-playing fields. Private FM does not have a level-playing field with TV, or for that matter, even with AIR. AIR has multiple frequencies, it pays no licence fee, and yet takes away 35-40 per cent of the revenues in the market! Television is totally liberated! Our industry needs a 'fight for our rights' spirit. We have always got the worst end of the stick. The government is clearly indifferent to our needs. Time is running out!

The AROI must press for a quick solution to the Copyright board issue and ensure royalty is aligned with global norms, so that the industry can project costs going forward. Small towns are the ones that suffer the most because of royalty problems.

The AROI must involve FICCI and TRAI and get a detailed return on capital analysis done on why 'price per frequency per year' must go down and licensing should begin only when more spectrum is released in the metros. Licence should begin only when the licence period is fixed for 15 years. The government needs to apply itself here, and not just ignore this facet.

And then, the AROI must present an analysis of how many small cities are not 'breaking even' on their own, when they are being given free in discounted packages, and how they are dragging company profitability down. Someone should ask ... will Phase 3 not have more small cities and towns? Will not the large players think twice before further endangering return on capital?

If the IRF wants to succeed next time in gaining some credibility, they must invite the investors in Radio, face-to-face with government policy makers. Investors, who put their hard-earned money into this medium, so that all of us could be employed. Investors, who followed the government's objective to help the radio reach every corner of this country, only to find that it is now a one-sided relationship! So far, only the government has made money from the FM radio. All of us now need to get out of this 'Phase 3' standby mode we' re going through, and aggressively engage the government if need be, even the PMO, to get us out of this 'return on capital' mess!

(The author is managing director, Radio One)