FM auctions: Biggies win all - well almost!

The winner list for Batch 1, Phase 3 FM auctions in out.  As reported earlier, auction process took 31 working days to complete and altogether 125 rounds took place. 97 channels in 56 cities have won the bids. Their cumulative provisional winning price is Rs 1156.9 crore against the reserve price of Rs 459.8 crore set by the Government. The Government, however, has made additional money from the channels migrating from Phase 2 to Phase 3.

The Government has directed all the winners to pay 25% of their final bid amount by Monday, 21st September, and the remaining amount by October 1, 2015.  If the initial 25% is not paid in the required timeframe, earnest money deposit (EMD) paid by the station would be forfeited,  and if the channels pay the first 25% but fail to pay the total amount by October 1 both the EMD and 25% bid deposit would be forfeited.

Results for a few channels, including the Chennai have been put on hold. This is because the list announced by the Government does not include bids won by Sun TV, South Asia FM and Kal Radio in compliance with the Madras Government orders.

The Government, on another note, has also decided to file an SLP against the order allowing Digital Radio Broadcasting Company to participate in bidding process.
Coming back to the winners, it has been an interesting battle between the media owners….

The key winners:

HT Media Ltd (Fever FM Radio station) has won 10 licences, among them Delhi & Mumbai at a total cost of Rs 340 crore. It would now have presence in 13 cities with 15 licences.

Entertainment Network India Ltd from Bennett, Coleman and Co. Ltd has won 17 licences for Rs.339 crore. The new metro in its kitty would be Bangalore. It would now have 49 stations.

Big FM, an RBNL group company, has taken its presence to 59 stations. It has added 14 new stations to its existing 45 thus continuing to be the station with the largest footprint.

The Dainik Jagran group, owners of Radio Mantra and Radio City, won 11 frequencies and will now have a network of 39 stations.

Rajasthan Patrika Pvt Ltd And DB Corp too won 14 channels each.

Digital Radio Broadcasting Ltd, a company associated with the Sun Group, has won one channel each in Mumbai, Jodhpur and Srinagar.  The channel is poised to have two frequencies in Mumbai now, depending on the Supreme Court appeal being filed by the Government of India.

It has indeed been Goliaths winning all the way, with 7 media companies bagging 83 channels amonst them. A few regional players who have picked a channel or two are as follows:

Abhijit realtors and infraventures have picked a channel each in Akola & Bilaspur.

Sarthak Films Pvt Ltd has picked a frequency in Bhubaneswar, Rourkela.

Odisha television ltd too has bagged a channel in Rourkela

Renderlive Films & Entertainment have picked a channel in Aligarh

Abir Buildcon Pvt Ltd has bagged a channel in Bilaspur

Mathrubhumi is winner of the single frequency in Kozhikode

A look at few of the cities:

While bidding was slow and steady for some stations, for some, it was fast and furious and a few others just fell flat. Here is a quick look at a few of the cities that were connesiours of many an eye.
Single frequency in Delhi has been bagged by Hindustan Times at a bidding price that amazed many.

Two frequencies in Mumbai went to Hindustan Times and Digital Radio broadcasting Ltd. Interestingly, the monies paid by Hindustan Times for the channels in Mumbai and Delhi put together would be bigger than most others would have paid for their entire kitty.

Bangalore, the third most aggressively bid station, went to Entertainment network India ltd.

Patna frequencies which were among the top 10 bids in terms of the bid amounts have been bagged by Reliance Broadcast Network and Music Broadcast Pvt ltd. Pune frequencies, meanwhile, have gone to Reliance Broadcast Network and Entertainment Network.

Varanasi which gained momentum after a sluggish start went to Reliance Broadcast Network as well.

Bareilly, the last city frequencies being bid, have been bagged by Rajasthan Patrika & HT Media.

Two stations in Shillong have been bagged by Reliance Broadcast Network and Ltd and Entertainment Network India Ltd. Guwahati too has gone to Entertainment Network India Ltd.
Happy winners:

The winners are excited. Last couple of days when they knew they were the winners but could not discuss it openly must have been long. Here is what a few of them had to say about their wins:

Prashant Panday:  “We are delighted with the results of the Phase-3 Batch-1 auctions! We at ENIL focused at building a stronger presence for ourselves in the major metros. We have directly won 2nd frequencies in Bangalore, Hyderabad, Ahmedabad, Pune, Kanpur, Lucknow, Jaipur, Nagpur and Surat. We are hopeful of getting Delhi, Mumbai and Kolkata via the Oye FM acquisition route, provided MIB gives us permission. With this, we will be present in 12 of the top 13 A+ and A category towns. In addition, brand Mirchi will enter new cities – Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati and Shillong. We have also taken over Oye’s four cities – Amritsar, Patiala, Shimla and Jodhpur. In all these new cities, we will launch brand Mirchi soon. Now that the auctions are over, it is time for action! And that’s what we will be focusing on”

Harshad Jain, CEO, Fever FM, “We are happy with the way the FM Phase III e-auctions went. The prices were market determined and totally dependent on demand-supply economics. The process was transparent and fair. Every investor had their own value expectations and those who bought the licenses believe in their capabilities to get good returns on their investments. This auction will definitely stimulate competitive intensity.

Our radio business has established an enviable position in the 4 metros of Delhi, Mumbai, Kolkata and Bangalore. We felt that this was the most opportune time for us to expand our radio footprint across the country. With the FM Phase III e-auction we have strengthened our metro presence and formed a strong footprint in UP, the largest Hindi market. We now have a dominant position in the biggest FM markets of Delhi and Mumbai with a second station in each; also, by acquiring a station in Chennai and winning in Hyderabad, we now have a presence in each of the 6 metro markets. We have also won seven stations in the key towns of UP – Lucknow, Kanpur, Agra, Allahabad, Aligarh, Bareilly and Gorakhpur.”

Mr. Harrish M Bhatia, CEO, MY FM, “I am very happy with the stations we have picked up, we have acquired 14 new markets, which extends our presence to 31 cities. Our focus has always been Tier II & III markets and with the addition of these station, we will continue to deliver good returns to our shareholders, employees, customers and associates. We have been able to strengthen our network further in the states we are present and also consolidated our presence in Maharashtra.

We had a clear business plan which was basis last 7-8 years business trends & keeping in my mind current market, economic and political situation. We only picked stations which we thought will be profitable and left certain markets the moment we realized the cost has reached a point where it defeated our business logic in the long run. Retail market perception & reality is different, while growth is there in retail market, one has to remain very efficient with clear focus on customer centricity. We aim to break even in 3yrs and profitable in 5 years.”

Apurva Purohit, CEO – Radio City 91.1 FM, “We are pleased to share that we have won 11 frequencies &  in the markets that we were keen on. This increases our footprint across important cities in each state as we become a 39 station network. Together Radio City & Radio Mantra will be dominant players in important state clusters and continue our successful phase 2 strategy of concentrating on advertiser relevant markets.”