European Banks Stepped In

The policy for private FM radio channels promises a multi-lane highway in place of the virtual single track that exists. A city can have anything up to 12 stations, depending on its size and of course its revenue potential. This amplitude makes it possible for FM broadcasting in India to take the shape that it has elsewhere, with a multitude of stations catering to a variety of special interests. But the stipulation that not just air time but transmitters and studios cannot be hired, can require excessive financing for the promotion of esoteric channels that cater to niche needs and add to the richness of community life. The same result is likely to follow from the norm that any channel must bring into play Rs 5 crore by way of funds. For these funds to pay for themselves, the business must yield an operating profit of at least Rs 1 crore. How many towns are there which will be able to generate a multiple of this figure by way of advertisement revenue for several channels? The policy is right in seeking to keep out non-serious bidders for FM stations but why should not a smaller franchisee, say one devoted to classical music, not be able to hire someone else's transmitter? Newspapers with small print runs nowadays invariably print their papers on someone else's press. This has not led to a mushrooming of non-serious papers.

The bigger players and articulate lobbies should be happy with the policy. Foreign promoters have been kept out. But since foreign institutional investors have not been, foreign funding has not been excluded. As FIIs can participate in private placements, a licensee need not even get listed to access foreign funds. Private licensees have been kept out of news and current affairs, to deflect criticism from the guardians of the national interest, but this is meaningless at a time when private TV news channels are giving Doordarshan a run for its money. In order not to make the licensing system look foolish, the sale of licences has been disallowed, but there is no such ban on the sale of the company owning a licence. Even if there was, the private telecom service providers have shown how to get round it.

This is not to say that everything about the new regime is to be frowned upon. Any attempt to provide multiplicity of choice in place of the present state monopoly is to be welcomed. Most of the aspiring big players, which are the important me