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FM Radio Industry in India, Playing at the Right Frequency

Aparna Dutt Sharma, Chief Executive Officer, IBEF

Dec 24, 2012 16:29

The FM radio sector in India has come a long way in India and the road ahead is equally exciting. Going by the numbers, India’s FM radio industry accounts for just four per cent of India’s total advertising industry and the market size of the sector has been estimated to be at INR 14 billion in 2012-13 with almost 40 radio broadcasters providing services in 245 stations in 86 cities, as per a recent study. The small share of FM radio industry in the overall advertising pie is no surprise considering that radio is not considered to be the primary advertising medium, but it is still very effective in executing regional ad campaigns.

FM radio industry in India has been growing at a compounded annual growth rate (CAGR) of 14 per cent annually over the last three years. It is important to note here that Phase III of FM radio licensing promises further growth opportunities for the Indian FM radio industry, since it covers 294 cities and 839 licenses. Also, the sector is expected to grow to INR 23 billion, at a CAGR of 18 per cent, during the three years following Phase III auctions.

Currently, the advertising revenues comprise more than 85-90 per cent of the total revenue generated by FM radio companies. The number of FM stations can be expected to grow multifold during the third phase of expansion, attracting the attention of both domestic and international players.