FM broadcasting began on 23 July 1977 in Chennai, then Madras, and was expanded during the 1990s, nearly 50 years after it mushroomed in the US. In the mid-nineties, when India first experimented with private FM broadcasts, the small tourist destination of Goa was the fifth place in this country of one billion where private players got FM slots. The other four centres were the big metro cities: Delhi, Kolkata, Mumbai and Chennai. These were followed by stations in Bangalore, Hyderabad, Jaipur and Lucknow.
Times FM (now Radio Mirchi) began operations in 1993 in Ahmedabad. Until 1993, All India Radio or AIR, a government undertaking, was the only radio broadcaster in India. The government then took the initiative to privatize the radio broadcasting sector. It sold airtime blocks on its FM channels in Indore, Hyderabad, Mumbai, Delhi, Kolkata, Vizag and Goa to private operators, who developed their own program content. The Times Group operated its brand, Times FM, till June 1998. After that, the government decided not to renew contracts given to private operators. In 2000, the government announced the auction of 108 FM frequencies across India.
Radio City Bangalore, started on July 3, 2001, is India’s first private FM radio station. It launched with presenters such as Rohit Barker, Darius Sunawala, Jonzie Kurian and Suresh Venkat.
FM LRS (Local Radio Station) was inaugurated on 1 July 2001 at 14.28 in Kodaikanal in the frequency 100.5 MHz. The two radio persons Dr.Musiri.T.A.Veerasamy and B.Rajaram (Savitraa) made 100.5 popular and the LRS was upgraded to a “METRO FM” channel in just two months. The channel covered a radius of about 200 km due to its location at 2200 meters above MSL in Kodaikanal. Later, the stalwarts like Supra (K.Natarajan) in 2002 and Maha Somaskandamoorthy in 2003 joined KODAI FM, as it is popularly known. The biggest individual FM channel in India in both area coverage and listenership.
Indian policy currently states that these broadcasters are assessed a One-Time Entry Fee (OTEF), for the entire license period of 10 years. Under the Indian accounting system, this amount is amortised over the 10-year period at 10% per annum. Annual license fee for private players is either 4% of revenue share or 10% of Reserve Price, whichever is higher.
India’s earlier attempts to privatise its FM channels ran into rough weather when private players bid heavily and most could not meet their commitments to pay the government the amounts they owed.