Britain's Daily Mail Group (DMG) hopes to have its second Sydney radio station up and running by Christmas after agreeing to pay $106 million for an FM licence.

DMG, which runs the successful Nova brand, outbid the joint venture between British billionaire Richard Branson and John Singleton's Macquarie Radio Network at an auction in Sydney.

Australian Broadcasting Authority chairman David Flint said the ABA was "very pleased" with the result of Thursday's auction.

"It indicates how commercially valuable the FM band is," he said.

Nova has taken the local airwaves by storm since arriving three years ago, with all five DMG-owned or partly owned stations picking up market share across all age groups in this year's second survey.

The 17.9 per cent commercial listening share in Sydney was its highest ever in that market and compares favourably against its 2003 year average of 14.7 per cent.

DMG blew away competitors in 2000 when it paid $155 million for a first Sydney licence and all up, has spent $295 million acquiring a full or part-share of metropolitan radio licences around Australia.

The only capital city without Nova is Brisbane.

DMG chief executive Paul Thompson said after the auction the group was not looking to chase the Nova market again in Sydney.

"I think it's probably logical to suggest that it would be very silly of us, really, to put a station on the air that was going to be a direct competitor of Nova," he told reporters.

"So I think you can probably safely say it will be a little way away from Nova," he said of the new licence.

Mr Thompson said the company's first priority was to launch its Nova station in Adelaide, which would likely be done in the second half of this year, before turning its full attention to Sydney.

Nielsen Media Research AdEx estimates that eight per cent of main stream advertising dollars - or $495 million - was spent on radio advertising in 2002 with almost 80 per cent of Australians tuning in to commercial radio each week.

Mr Thompson that with more than 40 per cent of Australia's radio revenue generated in Sydney, it was "a long way from a saturated market".

However, the boss of DMG highlighted concerns the price required for a licence at an auction to be held next week in Brisbane may simply be too high.

"In Brisbane, I suspect it's going to be an auction of losers - everybody who bids and loses will be a loser and whoever (wins) will have to pay too much and will also be a loser," he said.

Mr Thompson said it had been "quite important" to outbid the Branson/MRN joint venture at the auction in an attempt to try and prevent them from launching a national, under 40 network under the Virgin Radio brand.

Only those two parties bid during proceedings.

Austereo Ltd chief executive Michael Anderson, whose company has seen its core market increasingly attacked by Nova, said Thursday's events had come as little surprise.

"Obviously, DMG were the front runner but the price was probably at the upper end of what we expected," Mr Anderson told AAP.

Mr Anderson said that while it was encouraging to hear comments from DMG that it planned to attack a different market segment to Austereo's 2Day and Triple M stations, he would be adopting a wait and see attitude.

"We wouldn't build our business model based upon that only but there's some logic that says you wouldn't bring in your second licence too close to your first," he said.