Tuesday, June 23, 1998 Published at 06:58 GMT 07:58 UK
Digital radio set for slow start
Digital radio boasts features such as text display
Bidders aiming to run Britain's only commercial national digital radio station are due to be announced on Tuesday.
But the "contest" looks like being a one-horse race as only one consortium is expected to make a bid.
Radio is the latest frontier in the digital revolution, which has already had a major impact on the music industry in the form of compact discs. Digital television is just around the corner in the UK.
Digital audio broadcasting is being touted as the future of radio. It offers crystal clear CD-quality sound and an end to interference and tuning problems.
Digital radios can also display data such as information such as the names of artists being played. Some radios will be able to display pictures and, when used with a soundcard on PCs, can carry information such as stock-market prices that tie in with business reports.
But commentators point out that most of the major commercial broadcasters are giving digital radio a wide berth.
Simon Cooper, of Digital One, said the "sums add up" because much of the infrastructure is already in place.
"The programmes are being made on a national basis; the advertisements are being sold on a national basis; the transmitter network is already there for the analogue side and it's a question of adding the digital capability to that," he said.
The group's plans are backed by a £10m total investment over the 12-year licence period.
The consortium said it intends to introduce seven more radio services, apart from the three stations Virgin Radio, Talk Radio and Classic FM, which have a guaranteed place in its digital transmissions.
Both Capital Radio - one of the UK's fastest growing commercial radio companies - and Chris Evans's Ginger Media Group, which owns Virgin Radio, looked at bidding but pulled out.
David Mansfield, Chief Executive of Capital Radio, says digital radio will succeed, but he is not sure when.
"For Capital to take £3m a year or more and invest it in digital radio without knowing at what point we would start to get a return on that for our shareholders is a gamble we are not prepared to take," he said.