Emap venture wins digital radio licence
CE Digital, which has already won the digital licences for Manchester and Birmingham, will go on air in the capital from next May, the Radio Authority said.
It added that bids for the first of two more digital licences for London would be accepted from next week, with a decision due to be announced in March.
Paul Davies, group commercial director at Capital Radio, said: "There were some pretty big guns out there [in the bidding]. The decision is a vote for the listener."
Digital radio offers better sound quality than existing services, as well as the capability to receive accompanying text displays. However, digital-capable sets retail for about pounds 1,000 and industry analysts concede that until prices fall, their popularity will grow only slowly.
Mr Davies estimated that by 2005 about one in five of London's listeners would have a digital set.
Mr MacKenzie, who heads Talk Radio and had bid for the digital licence with media personality Chris Evans, characterised yesterday's award as "a vote for the old order".
A spokesman for Talk Radio said that its Switch Digital consortium - which also included Virgin Radio and Clear Radio - remained committed to digital services, but could not confirm whether it would make a fresh bid.
Phil Riley, chief executive of Chrysalis Radio, whose parent Chrysalis Group also bid for the first digital licence, said he was disappointed by the result but that the firm would contest the next award. "We all in the radio industry realise this is a long-term project," he said.
CE Digital will broadcast eight existing services - including Capital FM, Capital Gold and Emap Radio's Kiss 100 - on the digital format, together with a new service aimed at an audience aged 25 to 45. It will pay an annual fee of pounds 8,500 for the 12-year license.
Shares in Capital Radio, the UK's largest radio company, yesterday rose 31.5p to 911.5p while Emap added 53p to 1,043p.
Emap was also awarded a digital licence for the South Yorkshire area.
The Radio Authority said a digital licence for Glasgow was secured by Score Digital, a subsidiary of Scottish Radio Holdings, whose shares remained unchanged at 982.5p
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