HT Media Limited, the company that owns the Hindustan Times, has signed a memorandum of understanding with Richard Branson's Virgin Radio Asia to explore the possibility of setting up FM radio operations in the country.
Currently, neither HT Media nor any of its affiliate companies has a licence to operate an FM radio station. Sources close to the development said a licence would be applied for after the two partners gave shape to their joint venture, including a decision on the cities to start the services in.
Both partners would be closely scrutinising the regulatory environment, which makes the FM radio business a costly affair. The licence fee in a city is decided by bidding and the licencee has to pay a 15 per cent incremental annual fee. It is estimated that the radio companies will have to cough up as much as Rs 125 crore (Rs 1.25 billion) in licence fees this year.
Besides, foreign investment is also not permitted in the business. Even Radio City, which has a tie-up for content with Rupert Murdoch's Star India, is under the government's scanner because of its foreign connections.
Virgin Radio Asia is a member of Branson's Virgin Group of companies and was launched in 2002 to build an Asian radio network on the back of Virgin's European radio operations. It currently has operations in Thailand and China.
Virgin Radio was originally set up by the Virgin Group in April 1993. Subsequently, the Virgin Radio business in the UK market was bought out by SMG Plc, a Scottish media company.Now, under the Virgin Radio Asia banner, Branson's Virgin Group operates six radio stations in Thailand, four of them in Bangkok. These are Soft FM89, Soft Samui, HITZ 95.5 (Bangkok), HITZ 105.75 (Chiangmai), Smooth FM 105, and Eazy FM 105.5.