Media in Goa - Broadcasting Background

Broadcasting Background

In the mid-nineties, when India first experimented private FM broadcasts, the small tourist destination of Goa was the fifth place in this country of one billion where private players got FM slots. The other four centres were the big metro cities – Delhi, Mumbai, Kolkata and Chennai.

In Phase-II of FM licensing, Goa (rather, its state capital of Panaji) was categorised as a 'D'-class city, i.e. having a population between 100,000 to 300,000.

In Goa, India's smallest state with a population of just 1.4 million, the successful bidders were ENIL (Times group – Radio Mirchi) Rs 17.1 million; Indigo (Jupiter Capital – Rajiv Chandrasekhar) Rs 12.9 million; and Adlabs (Reliance – Anil Ambani group) Rs 12.1 million.

Indian policy currently lays down that these bids are a One-Time Entry Fee (OTEF), for the entire license period of 10 years.

(Under the Indian accounting system, this amount is amortised for the 10 year period at 10% per year. In other words, in the company's profit-and-loss account, ENIL will calculate their Rs 17.1 million as Rs 1.71 million per year.)

The Reserve Price is calculated as 25% of the highest valid bid. In this case, the reserve price in the Goan capital is Rs 4.27 million.

Annual license fee for private players is either 4% of revenue share or 10% of Reserve Price, whichever is higher. Therefore, the minimum guaranteed annual payment for Panaji FM operators would be 10% of Rs 4.27 million, or Rs 427,000 only (unless their revenue is much higher).

Earlier, India's attempts to privatise its FM channels ran into rough weather, when private players bid heavily and most could not meet their commitments to pay the governments the amounts they had expected.

In FM Phase-1 (year 2000), the highest bid in Goa was Rs 41.5 million. Under the policy then, this would have escalated – at 15% each year – to Rs. 146 million by the tenth year of operation. The bidder would have ended up paying Rs. 42.6 crores over 10 years! Some see it as not surprising that the major players then backed off.

This time round, the only local company from Goa to bid for a license this time was Tarun Bharat Multigraphics. All the winning players are based outside Goa; it is to be seen what effect this will have on the way their channels are run.

All the three winning bidders this time will have to co-site their transmitting infrastructure with All India Radio's tower on the outskirts of Panaji, unless the policy is changed.

AIR’s FM Rainbow has a six kW transmitter, and even this is not heard properly in some distant areas of Goa. The private FM operators are allowed only 3 kW transmitters.

Radio Mirchi (of what was the Times FM group, run by one of the biggest newspaper chains in the country) is making a come-back to Goa after many years. In the late 1980s and early 90s, Times FM used to buy air-time on AIR’s Panaji FM channel.

The three new 24 hour stereo channels are expected to go on air by the end of 2006. Times could be first off the mark, but the others also have deep pockets.

C and D category cities are allowed to network and share programming, but generally, channels prefer to do in-house programming.

News in not permitted on private FM (though the federal minister says this may be reconsidered in two or three years). Nationally, many of the current FM players – like the Times of India, Hindustan Times, Mid-Day, BBC etc. – are essentially newspaper chains or media, and they are already making a strong pitch for News on FM.