Newstalk aims to reach 80% of households

Newstalk 106 will have "an open mind" on surrendering its Dublin radio licence if it secures a "quasi-national" licence from the Broadcasting Commission of Ireland (BCI).

Denis O'Brien, chairman designate of Newstalk and the station's largest shareholder, said his team would "like to consider" retaining both licences and offering two separate services.

He was addressing the BCI at an open hearing about the award of a new quasi-national licence, which would cover about 80 per cent of the State's homes.

"We obviously will take guidance on this from the BCI," said Mr O'Brien, indicating that the plan to keep two licences would be amended if this was what the commission wanted.

Mr O'Brien said Newstalk, the only applicant for the new licence, was also "totally flexible" on how it would name any new station and would again be guided by the commission.

He told the BCI that he and his colleagues had built Newstalk to a position of 7 per cent listenership and 4.8 per cent market share in Dublin "inch by inch".

Newstalk 106 projects a 4 per cent share of the Republic's radio market in its first year of holding a quasi-national licence, delivering revenues of €8.4 million. After five years, sales will have climbed to €12 million, according to the station's forecasts.

Year five would also deliver operating profits of €720,000, according to Newstalk's forecasts. Accumulated losses at this stage would amount to €14.8 million. Newstalk has not broken even since starting to broadcast in 2002.

The station's finance director, Patrick Hand, told the commission that investors had pumped €14 million into Newstalk so far. A further investment of €6.2 million, designed to bring a national station to the break-even point, would now be required, he said.

Of this, €2.1 million has already been secured through a leasing facility, with the remainder fully underwritten by shareholders.

The BCI plans to decide on the new station by May 22nd.