Govt rules out FDI in FM radio

NEW DELHI: The government on Thursday said it was not open to foreign direct investment in private FM radio despite it being allowed, in various proportions, in other segments of the Information and Broadcasting sector.

"No, we are not open to allow FDI in private FM radio," Information & Broadcasting Minister S Jaipal Reddy said on the margins of the Economic Editors'' Conference here.

Currently, while up to 20 per cent FDI is allowed for direct-to-home (DTH) ventures, it is 49 per cent for the cable industry. On the other hand, for news TV channels as well as print media, it is 26 per cent each while for speciality magazines, it is 74 per cent.

Interestingly, even broadcast regulator Trai had asked for a "review" of the FDI regulation in the private FM radio segment to make it consistent with other segments.

"It is necessary for the Government to review the policy in a holistic manner and bring about a greater degree of consistency in the rules for various segments. For FM radio as such it would be necessary to place some restriction on FDI – this is also the practice in most countries.

"However the exact number should be determined so that it is consistent with the other segments of the media sector," Trai had said in its recommendations on Licensing Issues Relating to the 2nd Phase of Private FM Radio Broadcasting, submitted to the government in August.

Despite not favouring FDI in the segment, Reddy was bullish on the overall growth prospects. "Technically, there is scope for as many as 400 private radio stations in the country and the government is ready to provide all kind of support for this," he said.

The government has appointed a merchant banker to help it devise expansion plans for the FM radio sector. "It is in the final stage and the name of the banker will be announced in the next few days," Reddy said, adding that it was also talking to TRAI and existing players for this.