Johannesburg - Residents of Limpopo, Mpumalanga and North West will tune in to a new groove in the next six months, when three new commercial radio stations start operating in the provinces.
This is after the Independent Communications Authority of SA (Icasa) announced yesterday that it had awarded three consortiums commercial radio licences to operate in the provinces.
A consortium including MSG Afrika, led by businessmen Simphiwe Mdlalose and Given Mkhari, as well as Moss Ngoasheng's Safika Investments were awarded a licence to open Capricorn FM in Limpopo.
A consortium led by African Media Entertainment will operate M-Power Radio in Mpumalanga. Radio North West (RNW), 26 percent owned by Kenny Setzin's Direng Investments, will give North West a new sound of gospel and R&B. Direng Consortium has a 26 percent stake in M-Power. Setzin is a former executive at New Africa Investments.
The three stations will have a fusion of adult and youth programmes, with emphasis on events and news related to the regions they cater for. Icasa has given residents more choices as they had previously relied on community, campus and SABC radio stations for entertainment and information.
The stations will more or less operate like Gauteng-based Kaya FM, YFM, Jacaranda FM and Durban's iGagasi FM.
Mkhari said Capricorn FM expected to make profit in the next three years on the back of economic growth in Limpopo brought by the mining industry, which was expected to drive advertising spend in the province. "Limpopo is a lucrative business Capricorn has been given something close to a monopoly as the first commercial licence holder in the province."
However, the same could not be said about North West, John Massel-Henderson said as advertising spend was not "fantastic from a national point of view". But he added that there were opportunities to attract local advertising.
Peak funding for Capricorn FM would be R11.6 million, while that of RNW and M-Power would be about R6 million each. Standard Bank, through Safika Investments, would inject R12 million into Capricorn FM.
Massel-Henderson said the group's shareholder, 21 Venture Capital, would invest R2.7 million, but further negotiations were under way with the Industrial Development Corporation for more funding.
In awarding the licences, Icasa found that the three consortiums had sound empowerment credentials.