India is planning to set up regulator in radio sector.

The Indian govt. is planning to set up regulator in the radio sector. The radio sector is managed by Telecom Regulatory Authority of India (TRAI), which extend over telecoms and broadcasting. It is not clear that the radio regulator will be set up by parliament act or be a department with in information and broadcasting ministry.

Rajiv Mishra, proxy of the Assn. of Radio Operators in India says, "An independent radio regulator on the lines of such bodies in the U.S. or other developed countries is the need of the industry". Radio could be an enormous story. India now has nearly 80 local FM stations. All India radio, the state radio broadcast monopoly has been broken recently. That's up from 22 in 12 cities six months ago and is expected to reach 245 in 87 cities by end of this year.

According to audit firm PriceWaterhouseCoopers, the value of the Indian radio market could rise from rupees 5 billion ($120 million) in 2006 to $411 million by 2011, or cumulative average growth of 28% per year for the next five years.

New FM stations are bombarding the airwaves with tunes, and their arrival is partly blamed for the fall in physical music sales in metropolises where they have taken to the air. Moreover, as car ownership rises, FM radio is changing people's auditory habits. Weekday tune-ins is 94%, according to Madison Media research, but only 10% on Sundays.

Rules governing the industry are tightly drawn in order to ensure plurality and protect AIR. FM license fees are high, no player can operate more than a single station in a local market, no player can operate more than 15% of the total operational stations and no news or current affairs programming is allowed. That remains a preserve of the state; although there are regular rumors current affairs will be allowed.

Predictably, many of the biggest existing entertainment and media groups ended up with the most licenses. Reliance Ad labs got 45 and Sun TV, 41. Less predictably, the recent round of license awards also allowed foreign operators in. They are limited to a 20% stake in any franchise, but that did not stop Blighty's Virgin Radio and BBC Worldwide and Malaysia's Astor buying in.

Critics say that sector is hemmed in by overregulation, and the market may not reach its potential. That's where the new regulator could make a difference. With a further 700 channels up for seizes in the next license round, the new regulator will have plenty to do.