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India's first private radio station to start soon

India's first private radio station, backed by content from media baron Rupert Murdoch's Star TV, is set to start in Bangalore in a few weeks.

The Bangalore FM station will mark a milestone in India's gradual opening of the state monopoly on broadcasting over the past decade. Private broadcasters currently beam on to satellites for cable distribution or rent out time slots from state broadcasters.

Star India, a subsidiary of the News Corp-owned Star TV, will supply the content and support sales for Music Broadcast Private Ltd, a company backed by expatriate Indian tycoon P K Mittal and associates.

"With this arrangement Star will be able to extend its relationship with audiences in India by connecting them in more ways than television," Sumantra Datta, chief operating officer of Star's radio division told Reuters.

The launch comes one year after India's federal government ended its monopoly on frequency modulation radio broadcasting and auctioned licenses to private companies.

There are currently no private terrestrial stations for radio or television in India.

The FM radio broadcast will be entertainment-based with a strong music content, Datta said.

NO NEWS BROADCAST

Under the current government rules, private FM radio stations can provide only entertainment and educational programming and cannot venture into the news and current affairs segment, considered politically sensitive, industry officials said.

More than 100 FM stations are expected to be set up in about 40 cities in the first phase of privatisation by December 2002.

Star will also supply content and provide sales services to other cities including Bombay and New Delhi where Music Broadcast has won radio licences, Datta said.

And because of its head start, Star will be able to set the pace in the potentially exploding media category, he said.

State-run All India Radio has in the past experimented with sponsored programmes and renting out time slots to private firms, but full-scale private stations have not yet taken off.

Star, which operates half-a-dozen satellite television channels for the Indian market, beams into Indian homes from Hong Kong.

The government currently allows only Indian companies to venture in to radio broadcasting.

"After several years of patience, Star has got a head stay in the Indian television market. Radio is obviously the most cost-effective way for them to expand their market," said Ashish Bhatnagar, vice-president at SSKI Finance Ltd.

"It's a great marketing tool and can serve as a good cross selling network for Star," he added.

But Star's radio venture will face competition from the powerful cash-rich Times of India newspaper group and Radio Mid-Day and other private firms.

Slick marketing and a variety of content is expected to help private radio stations boost the sector's revenues.

Bhatnagar forecast annual revenues of India's private radio sector to grow to about Rs 6 to 7 billion ($128-$149 million) by end-2005 compared to the state-run monopoly broadcaster's annual revenues of about Rs 1 billion.

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