The Resurgence of Radio in India

As a result, in December 2001, Prasar Bharati extended the deadline to April 30, 2002, and signed a memorandum of understanding (MoU) for a period of 10 years. This MoU allowed private FM operators in five cities to use AIR resources against payment. In spite of these developments and the 'bright future' predictions for radio broadcasting, there were some doubts regarding the industry's future. Given the huge amount of money spent on acquiring licenses and setting up stations, analysts pointed that it would take four to five years for the companies just to break even. Moreover, radio was not very popular in the media market and its revenues accounted for a negligible percentage of total media revenues (Refer Exhibit V For Projected Media Revenues). Thus, it seemed rather difficult for all the players to sustain the competition for long without earning any profits...