Govt may push digital radio adoption at upcoming FM spectrum auction: I&B secretary

The Indian government is mulling over policies to adopt digital radio standards in the country, said Apurva Chandra, secretary, Ministry of Information & Broadcasting (I&B). Talking to Mint at the sidelines of an event by industry body, India Cellular and Electronics Association (ICEA), Chandra said that the government may host the third round of spectrum auction for the frequency modulation (FM) radio industry “within the next six to eight months”, and a policy decision on promoting digital radio in the country could be taken by then.

“The I&B Ministry is working with industry stakeholders, including private radio players, auto and phone manufacturers to understand and enable the scope of adopting digital radio services in India, which can help advertisers and revive revenues for radio operators in India,” Chandra added.

On Thursday, the ICEA in partnership with consultancy firm Ernst & Young (EY) India published a report, titled ‘Digital Radio Broadcast in India’. According to the report, while the Indian radio industry clocked annual revenue of $390.7 million in CY 2019, the impact of the pandemic saw the industry’s ad-driven revenues drop by more than half — to $176.4 million in CY 2020. By the end of this year, this could grow to $226.9 million.

ICEA and EY expect radio revenues to grow to $327.7 million by CY 2026, based on its current trajectory of analog FM radio broadcasts. However, with adoption of digital radio, the industry could clock up to $756 million in revenues by 2026 — more than 2x that of its expected revenue trajectory.

Pankaj Mohindroo, chairman of ICEA, said at the launch of the report that adopting digital radio is not a cost intensive task for broadcasters. “The industry needs a push to bring in receivers that are compatible with digital radio transmissions. The mobile phone industry could play a major role in this, and a starting point of around 50 million devices for digital radio broadcasters to target could be viable,” he added.

Mohindroo added that the cost of the FM chip required to enable digital radio reception on mobile devices is very low, which could persuade mobile device manufacturers to adopt digital radio as part of their feature set.

However, for private players, adoption of digital radio in India is a wait-and-watch affair. A senior executive with a leading private FM radio broadcaster said that at present, the main issue is a lack of digital radio receivers — and as a result, listeners — in India. “If the government decides to allocate additional spectrum for digital radio broadcasting in the initial phase, that could make a case for private radio businesses in the country to adopt digital broadcasting,” he added.

At present, the industry is also split on the standard of digital radio services that they could adopt. Digital Radio Mondiale (DRM), a global broadcasting consortium, and US-based private digital radio service provider Xperi’s HD Radio, are two of the standards competing to get a share of Indian radio listeners. While both DRM and HD Radio have conducted digital FM broadcast trials in Delhi and Jaipur, there is no consensus on a standard for digital broadcasting in India — which a formal policy could help define.