FM radio biggies ENIL, RBNL eye acquisitions

Entertainment Network (India) Ltd. | TV Broadcasting & Software Production | Media | BSE: 532700 | NSE: ENIL

10 Jun 2011 Evaluate

As the government prepares to issue additional radio licenses and announce new guidelines for the sector, leading FM channel operators such as Entertainment Network India Ltd (ENIL) and Reliance Broadcast Network Ltd (RBNL) are eying acquisitions. FM Radio Phase-III expansion is expected to allow multiple frequencies in the same town. It is also likely to relax the lock-in period for radio promoters. As per the current policy, an FM license is given for only ten years and a company cannot operate more than 15% of the total FM stations allocated.

Entertainment Network India Ltd (ENIL), which operates 32 radio stations under the Radio Mirchi FM channel across India, will consider acquiring other radio operations if government regulations are relaxed. Similarly, Reliance Broadcast Network Ltd (RBNL), which owns Big FM, will consider making acquisitions for its radio business provided future government guidelines for the sector are favorable.

Under the present circumstances, it made sense to bid for new licenses rather than acquire an existing company whose license is about to expire. After much delay, the government is likely to announce the auction of additional licenses for the Phase-III expansion of FM radio and other policy decisions related to the sector.