Making waves: DAB radio analysis
22 July 2014
Author: Jack Carfrae
Digital radios are nothing new. They've been around for well over a decade, they're on the rise in cars, and we're told that, like the telly, the current analogue services will at some point be ditched in favour of Digital Audio Broadcasting (DAB).
That last bit is the cause for concern for the fleet industry. You don't want to order a basket of cars without DAB radios (which, granted, may be cheaper) only to discover their residual values take a hit when the Government announces the switchover a week later.
The trouble is that a date has yet to be set, and those in charge keep putting it off. An announcement was due at the end of 2013, but minister for culture, communications and creative industries, Ed Vaizey, refused to confirm a date, suggesting that listener numbers and signal coverage needed to improve before anything would be set in stone.
Jane Ostler, head of communications at Digital Radio UK, explains: "The minister said the industry has to meet certain criteria [before a switchover]. He confirmed that we had to have 50% listenership before the switch is made and we're currently at 36.1%. DAB [signal] also needs to cover where FM is today."
Work is underway to address this.
"The Government and broadcasters are jointly investing in DAB and building more transmitters," Ostler continues. "There will be around 190 new transmitters installed in the next two to three years. That will take it from about 72% coverage at the moment to about 90%.
It adds about 6700km (4163 miles) to the road coverage and will be completed by mid-2016. The BBC is installing 162 new transmitters for its national stations as well, and that will get it to about 97% population coverage."
She adds that 2016 is now the expected date for a definitive announcement: "The Government has always said that it wouldn't announce dates until the criteria were met. We know this will probably be met by the end of 2016. It will be the end of 2016 when the Government is in a position to do the review.
"Nobody, at [the point of the switchover], would want a car with a device in that isn't capable of working. DAB is quickly becoming something people expect in their cars."
DAB hasn't been championed by everyone, though. Richard Parkin, director of valuations and analysis
at residual value specialist Glass's told BusinessCar earlier this year that the technology wasn't all it was cracked up to be from a fleet operator's perspective, and that there was more worth in speccing cars with audio inputs for mobile devices.
"It's more important to have a USB port in a car," he said. "The problem is that [DAB radios are] very expensive to maintain. The radio industry never wanted it. I don't see the point of DAB. Given the way smartphones are going, people will be able to have [access to] all their music on their phone. What you really need in the vehicle is an iPhone or USB dock."
Ostler debunks that theory though: "People do have competing requirements in their car and they are doing other stuff in their cars. The fact is, 33 million people listen to radio in a vehicle each week.
More and more cars do have line-in connections, but radio is the only entertainment that happens at you, and you don't have to do anything. Radio doesn't cost anything either - you just switch on. It might cost you if you're on 4G on your phone on a five-hour journey."
Rival RV specialist Cap has been positive about the knock-on benefits of the technology, while Jay Parmar, the BVRLA's legal and policy director, says it's simply a case of wait and see for the RV impact: "From a residual value perspective, there will be a minimal impact until the Government commits to switching off the FM frequency."
As for the availability of the service in new cars, it is well on the up. Cap's figures show 43.7% of new cars now have DAB as standard. "It's growing very quickly," says Ostler. "It was around 30% this time last year.
"It's an inevitable march of progress. In four or five years' time there will be 10 million more new
cars with DABs."