Mumbai : Private FM operator Entertainment Network (India) Ltd owned FM brand Radio Mirchi is all set to expand its footprint to 11 more cities, on the back of its successful participation in the first batch of the Phase III FM channel and frequency auctions that ended recently. With this the FM brand Radio Mirchi will expand its network to 43 cities from the 32 where it is present now.
Entertainment Network (India) Ltd (ENIL), which operates Radio Mirchi, successfully bid in seven cities – Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati and Shillong – in the latest round of auctions.
Also, it recently got permission from the Ministry of Information and Broadcasting to acquire the TV Today group’s FM channels in Amritsar, Patiala, Shimla and Jodhpur. These four will be rebranded as Mirchi channels, adding heft to the company’s portfolio in northern India.
Prashant Panday, managing director and chief executive of ENIL, said the company understood that radio is a small medium where one needs to always keep the head down.
“We had to keep reminding ourselves that we have to bid sensibly. The first strategy was to develop our business plan correctly and go by it,” Panday said. “If we get into that trap then we can’t deliver the returns to our shareholders. We did the same thing in 2006 and we bid as per our potential and could deliver to our shareholders.”
In this round of auctions, Radio Mirchi focused also on building a strong “2nd frequency” network in the biggest A+ and A category cities. It won a 2nd frequency in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur, Lucknow, Jaipur, Nagpur and Surat. The FM major acquired a third frequency in Hyderabad, which it will use to experiment with a new programming format in the city.
Panday said this time too the company did not bid beyond its means.
“Look at the last ten years. There was the Lehman crisis and nobody expected it and volatility has increased dramatically. That will happen in the future and we cannot ignore it. So don’t build an overtly optimistic business plan; it doesn’t work that way,” he said.
He said the current business plan is a very realistic one. “We also factored in digital. It will become big in future and a lot of business will move digital,” he said.
The central government had set the ball rolling on the FM radio auctions at the end of July, making available 135 frequencies in 69 cities. As many as 21 companies had vied for the frequencies.
At the end of the auction, 97 channels in 56 cities became provisional winning channels with cumulative provisional winning price of Rs 1,156.9 crore, against their aggregate reserve price of Rs 459.8 crore.
Reliance Broadcast Network, Music Broadcast, HT Media, Rajasthan Patrika, Digital Radio (Mumbai) Broadcasting, DB Corp, Abhijit Realtors & Infraventures, Sarthak Films, Odisha Television and Abir Buildcon were the other successful bidders in the auction. ENIL, part of the Times Group that also publishes The Economic Times, reported a 6.5 per cent increase in net profit for the quarter ended June 30, 2015 at Rs 25.9 crore, with revenue increasing 9.1 per cent to Rs 101.6 crore. It posted a net profit of Rs 105 crore on revenue of Rs 438 crore in fiscal 2015.
Radio Mirchi plans to participate in the second batch of the auctions that the government is expected to hold in the next 12 months.