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The FM local commercial radio licence for South Wales was awarded on 8 May 2007 to XFM South Wales Limited. The service is designed to cover Cardiff and Swansea and the areas around and between them. Subject to frequency availability, the coverage area of this licence subsequently may be extended further westward and inland.

South Wales licence award decision

Taking account of the range and diversity of existing local commercial radio services available in the South Wales area, Ofcom's Radio Licensing Committee (RLC) considered that the programme proposals put forward by XFM South Wales Limited for this licence would significantly broaden choice (section 105(c) of the Broadcasting Act 1990) for listeners throughout the region.

In particular, the Committee felt that the Format proposed by XFM South Wales Limited, which would offer an alternative rock music service, including each week at least 45 hours of specialist music programming, 'live' sessions, exposure for unsigned artists, local listings for live music and comedy programmes, would be very distinctive in relation to existing provision, and clearly would enhance the choice for listeners in all parts of the area to be covered by this service.

The research conducted by XFM South Wales Limited, which included a comprehensive analysis of the market as well as a detailed exploration of the local radio preferences of people living in the South Wales area, demonstrated clearly that the applicant's chosen target audience of 15-34 year-old males is relatively underserved by existing local commercial radio services, and the RLC noted in particular that BBC Radio 1, which is designed to appeal primarily to the same target audience, attracts a larger audience in South Wales than it does across the UK as a whole. The Committee considered that the service proposed by XFM South Wales Limited would therefore extend the demographic appeal of local commercial radio in South Wales, and was well-placed to attract current BBC Radio 1 listeners to the commercial radio sector.

This view was enhanced by the fact that considerable evidence was provided, in the form of both responses to the applicant's audience surveys and support from, among others, representatives of the local music industry, that there is demand and support for the provision of the proposed Xfm service (section 105(d)), and that it would cater for the particular tastes and interests of its target audience (section 105(b)).

In relation to section 105(a) the Committee considered that XFM South Wales Limited, a wholly-owned subsidiary of GCap Media plc, had amply demonstrated its ability to maintain its proposed service. More specifically, the RLC noted that the proposal to co-locate Xfm with the co-owned Red Dragon and Capital Gold services offered resource-sharing and cross-selling opportunities which were likely to enhance the financial prospects of the service. The Committee also considered that the financial forecasts submitted by XFM South Wales Limited were realistic and achievable in light of the recorded performance of existing specialist music services which have been launched into competitive markets.

Finally, the RLC considered that, in relation to Section 314 of the Communications Act 2003, XFM demonstrated evidence of demand for the amount of local material and proportion of locally made programming proposed in its application. The station’s proposed Format includes a commitment to provide locally-made output for at least 20 hours per day, and also includes a commitment to airing locally-relevant information during daytime periods.
The following pages set out the statutory requirements relating to radio licensing, and details of the licensing process. Further information about these, and detailed information relating to the applications for the South Wales licence, can be found at:

http://www.ofcom.org.uk/radio/ifi/rbl/car/

Statutory requirements relating to radio licensing

In carrying out all of its functions, Ofcom is required to have regard to the general duties set out in section 3 of the Communications Act 2003. In addition, under section 85(2)(b) of the Broadcasting Act 1990, it is the duty of Ofcom to do all that it can to secure the provision within the UK of a range and diversity of local radio services.

'Localness'

In carrying out its functions in relation to local commercial radio services specifically, Ofcom is required (under section 314 of the Communications Act 2003) to act in the manner that it considers is best calculated to secure:

• that programmes consisting of or including local material are included in such services but, in the case of each such service, only if and to the extent (if any) that Ofcom considers appropriate in that case; and
• that, where such programmes are included in such a service, what appears to Ofcom to be a suitable proportion of them consists of locally-made programmes.

For the purposes of the licensing process, Ofcom does not consider it appropriate to prescribe an amount of local material or a proportion of locally-made programming that new services should contain, as such matters may well vary greatly between different types of service. Rather, it is for applicants to set out in their application the amount of local material and the proportion of locally-made programming they propose to provide, supported, as appropriate, by evidence of demand or support for such proposals. Ofcom will then consider on the basis of the application whether the amount of local material included is appropriate, and whether the proportion of locally-made programming is suitable, for that particular service proposal.

Specific local licence award criteria

In considering the applications it receives for local commercial radio licences, Ofcom is required to have regard to each of the statutory criteria set out in section 105 of the Broadcasting Act 1990. These are as follows:

1. the ability of each of the applicants for the licence to maintain, throughout the period for which the licence would be in force, the service which he proposes to provide;
2. the extent to which any such proposed service would cater for the tastes and interests of persons living in the area or locality for which the service would be provided, and, where it is proposed to cater for any particular tastes and interests of such persons, the extent to which the service would cater for those tastes and interests;
3. the extent to which any such proposed service would broaden the range of programmes available by way of local services to persons living in the area or locality for which it would be provided, and, in particular, the extent to which the service would cater for tastes and interests different from those already catered for by local services provided for that area or locality; and
   d. the extent to which there is evidence that, amongst persons living in that area or locality, there is a demand for, or support for, the provision of the proposed service.
4. The legislation does not rate these requirements in order of priority, but it may be that Ofcom will regard one or more of the criteria as being particularly important in view of the characteristics of the licence to be awarded and the applications for it.

Process for assessment of applications

The South Wales licence was advertised on 12 September 2006. By the closing-date of 12 December 2006, eight applications were received, as follows:

allTalk FM South Wales Limited
David FM Limited
Kerrang! Radio Wales Ltd
Original 107 FM Ltd
South Wales Radio Ltd
Variety FM South Wales
UK Media and Radio Wales Ltd
XFM South Wales Ltd

The membership of Ofcom's Radio Licensing Committee (RLC) for this licence award was as follows:

Philip Graf, Ofcom Deputy Chairman (Chair)
Tim Suter, Partner, Content and Standards (Deputy Chair)
Peter Bury, Director of Strategic Resources
Martin Campbell, Chief Advisor, Radio
Peter Davies, Director of Radio and Convergent Media
Pam Giddy, Content Board member
Neil Stock, Head of Radio
Joyce Taylor, Content Board member for Scotland

The applications were circulated among all members of the RLC set out above as well as among relevant Ofcom colleagues. Copies of the non-confidential sections of the applications were made available for public scrutiny on the Ofcom website, and public comment on the local radio needs of listeners in the area, and the type of programme service required, was invited both at the time of the licence advertisement and on the day after the applications were received. The RLC took all replies into account when reaching its decision.

The RLC had an initial discussion of the applications at its meeting on 8 February 2007. This comprised an initial presentation by a member of Ofcom's Radio Team, summarising the proposals put forward by each applicant as they relate to the statutory criteria, followed by an opportunity for the RLC members to highlight any questions of clarification and/or amplification they wished to be put to the applicants.

Shortly after this meeting, each applicant was invited to respond, within a two-week period, to written questions of clarification and/or amplification on aspects of their proposals. The non-confidential questions and responses were subsequently made available for public scrutiny on the Ofcom website.

In line with Ofcom's published procedures, each application was awarded a score (of between 0 and 10) for each of the four statutory criteria contained in section 105 of the Broadcasting Act 1990. These scores provided an indicative picture of the perceived strengths and weaknesses of each application, and were used for guidance only. A summary of the scores was presented to the RLC at its 8 May 2007 meeting, as part of a paper which summarised the issues of relevance for each application under each of the statutory criteria. The information included in this paper was drawn both from the applications and the subsequent responses to questions of clarification and/or amplification.

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