Saturday, December 08, 2007 Radio network mulls IPO to fund expansion, technological upgrade
ONE of the country’s biggest radio network chains is now starting to lay the foundation of becoming a player in the stock exchange market in the next five years.
Radio Mindanao Network (RMN) president Eric Canoy said the company will use the proceeds of its initial public offering (IPO) to fund its expansion programs.
RMN is hoping to raise P500 million to P1 billion from the IPO.
To signify its confidence in the country’s radio industry, RMN is earmarking a total of P300 million to acquire additional equipment for its radio stations.
Canoy said the amount for technology upgrade will be shared among RMN stations in key cities like Cebu, Bacolod, Cagayan de Oro and Davao.
RMN started investing P25 million in upgrading its Manila-based AM (amplitude modulated) station dyXL, along with FM (frequency modulated) FM station IFM, Canoy said.
“The market has dramatically changed and competition is still stiff. There are a lot of new equipment, and talents are expensive,” he said in an interview with reporters last Thursday in an RMN-related event at the Marco Polo Plaza Cebu.
Something new
“We need to introduce something new. The last major development of radio was the advent of the FM stations in the 1970s,” he added.
The need to innovate has prompted Canoy to launch, for the first time in the country, the use of a high definition radio or digital broadcasting where a single frequency targets a different market segment.
For FM stations, this means improved broadcast quality through a digital format, multi-casting and the messaging capability of radio sets.
Canoy also revealed that RMN is now in talks with car manufacturers for the adoption of high-definition radio in cars.
In the United States, he said 10 percent to 15 percent of all radio stations have capitalized on this new innovation.
“We want to encourage, even our competitors, to use these radio sets,” he said.
But he said full operations of the high-end service may mean relocating transmission sites of the network.
“This will take some time but we take pride in being the first,” he said. “If you don’t passionately sell your product, people wouldn’t passionately embrace it.”
Conversion of the two RMN radio stations in Manila to the digital format from the old analog broadcast is targeted to be finished in the middle of next year.
For dyHP in Cebu, the technology shift is slated in the second half of 2008, Canoy said.
Meanwhile, Canoy said RMN, which is popular in the Visayas and Mindanao, is targeting to expand in Luzon, particular in Bicol.
RMN, which was founded in Cagayan de Oro, is celebrating its 55th year in the broadcast industry. It has 39 company-owned stations, excluding its affiliates.
Canoy is optimistic that despite the presence of more high technology gadgets, radio will remain to be a preferred medium of information and entertainment, especially in the rural areas.
He said, though, that RMN has no plans to venture into TV broadcasting. (MMM)
