Ofcom plans to reform commercial radio could make local networks more attractive to investors.

The communications regulator on Monday also offered a vision of a network of commercial stations that would see the likes of Heart, the group of stations owned by Global Radio, becoming nationwide broadcasters.

A decline in advertising has left the big industry participants struggling, though as more than 90 per cent of the business is in private hands, it is hard to give a full picture. Radio groups have been calling for changes similar to those proposed by Ofcom, seeing them as the only way of preventing big losses.

The chief executive of one group told the Financial Times: “This is a radical approach but that is a bit like saying Gordon Brown’s plans for the economy are radical: it could well be the only thing that could work.”

In response to a Digital Britain report being prepared by Lord Carter, the communications minister, Ofcom, in effect, suggested throwing out restrictions on how much local output operators have to broadcast and easing the merger regime.

Simon Cole, chairman of the Digital Radio Development Board, welcomed Ofcom’s proposals that would allow the two principal regional networks of digital transmitters, known as multiplexes, to merge. He said: “This is an indication that both the industry and the regulator recognise the need for a completely new digital model.”

The chief executive added: “This …would make it much more attractive to a local businessman in, say, Gloucestershire, to invest in radio if he knew that he could be part of putting together all six radio stations in the county.”

Ofcom’s proposals would allow operators to make programmes from regional headquarters, allowing them to save money by concentrating resources.

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