When the hammer falls at the auction of Sydney's new FM radio licence this week, strategic planners at all of the major networks will finally be able to get on with business.

Between $70 million and $100 million is expected for the entry ticket to Australia's most lucrative radio market, with similar amounts of money likely to be put on the table for upcoming licences in Brisbane and Melbourne.

And while Britain's Daily Mail Group is widely tipped to emerge victorious in all three auctions, the winner will undoubtedly influence the fortunes of a number of networks beyond their own.

Six bidders have lined up to vie for the Sydney licence this Friday, while eight have put their hands up for Brisbane's a week later.

Applicants in the harbour city include DMG, Harbour View Radio, Southern Cross and Sydney Radio Company while DMG, Brisbane Radio Company, Star Broadcasting Network, Hot Tomato Australia, ARN Brisbane and River View Radio will all compete there.

The wild card, as is often the case, will be British billionaire Sir Richard Branson, who alongside John Singleton's Macquarie Radio Network (MRN), wants to bring his Virgin Radio brand to Australia.

Industry stalwart Austereo, which boasts a stable including Triple M and 2Day FM, already has two stations in major markets and under strict media ownership laws is unable to buy more.

Macquarie Equities estimates that Austereo lost $20 million in advertising revenue to DMG's Nova stations during 2002/03, with its share of metropolitan radio advertising revenue dropping from 50 per cent in 2001 to 45 per cent last year.

Nova, on the other hand, continues to go from strength to strength, with all five DMG-owned or partly owned stations picking up share in this year's second survey, among all people.

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 its first Sydney licence. All up, it has spent $295 million acquiring metropolitan radio licences here.

And interestingly, DMG chief executive Paul Thompson said recently that the only thing that would save Austereo's bacon was if DMG won the licences and kept Virgin Radio out of the market.

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.

APN chief executive Brendan Hopkins, whose joint venture with United States company Clear Channel Communications makes up the Australian Radio Network (ARN), raised concerns at the company's interim results briefing that the bid price in Brisbane could be beyond reason.

ARN wants the licence so it can convert its AM music station 4KQ to the FM band, but Mr Hopkins warned the asking price could simply be too high.

"The total (advertising) revenue market in Brisbane's worth $65 million," Mr Hopkins said.

"Anyone who's going to be paying $70 million, $80 million, $90 million for a Brisbane licence - they should be asking them on what basis it can possibly make a return."

That view is broadly echoed by investment bank Citigroup, which said that with the disruptive impact of the first round of FM radio licences still ongoing, incumbent metropolitan radio companies now faced the prospect of another wave of competitive pressure.

This was in addition to longer term structural threats to the commercial radio industry such as the internet, DVDs, pay TV, gaming consoles and MP3, Citigroup said in a research report to clients.

"The continuing proliferation of alternative media and entertainment options is likely to underpin a trend of declining radio consumption," it said.

"This poses a threat to the industry's share of the overall advertising market."

However, Citigroup expects DMG to "bid aggressively" for the licences, with synergies to be gained in both Sydney and Melbourne, while Brisbane remains the only capital city to not yet have a taste of Nova.

"(The new licences) will give DMG the opportunity to create a dual national network targeting different age or gender demographic groups, thereby further enhancing its appeal to national advertisers," Citigroup said.

"And the additional fixed costs of operating a second station in each market are relatively low."

Meanwhile, Austereo has embarked on a major re-branding campaign across its network, with chief executive Michael Anderson welcoming the second survey results as an indication the restructuring was on track.

Mr Anderson said he believed Austereo would be a year ahead of most of the new stations created by the latest round of licence auctions.

However, Credit Suisse First Boston said that for the most part, the second ratings period showed Austereo's Sydney stations were tracking below their 2003 year averages in key demographic segments and time slots.

"The opposite is true at its Melbourne stations," it said.

"One theory is that the changes that were implemented earlier in Melbourne will take longer to gain traction in the Sydney market."

When Austereo released its interim results in February, chairman Peter Harvie said he expected revenues to remain flat over the full year due to increased competition as the new licences were issued.