Sir Richard Branson, the founder of Virgin Radio, and Kelvin MacKenzie, the former boss of talkSPORT, want to snatch one of the licences held by Classic FM, Absolute Radio and talkSPORT and reenter the radio business.

Virgin and Mr MacKenzie told Ofcom last week that they wanted the regulator to sell the frequencies used by the three stations in an auction process.

By law, Ofcom has to offer all three licences to the highest bidder in 2011 and 2012 – giving the former radio owners the chance to stage a come-back. An Ofcom consultation on the process closed on Thursday.

John Pearson, the co-founder of Virgin Radio, who now works for Sir Richard’s Virgin Radio International, said that the group had told Ofcom that “we believe the national radio licences should go out to tender; we think other potential broadcasters should be given a chance”.

Virgin Radio broadcast in the UK for 15 years from 1993. Its name survived various ownership changes, but was changed to Absolute last year after a takeover by the company that ownsThe Times of India. Virgin Group still has interests in radio stations around the world and Mr Pearson said: “We’d like to return the brand to the UK.” If successful in a bid for a UK licence, Virgin may end up going head-to-head with Absolute Radio.

Mr MacKenzie declined to comment on his submission to Ofcom, but sources close to the former editor of The Sun and chief executive of The Wireless Group said: “Since he was the first one to make money out of speech radio, he wants the chance to do it again.”

The first licence to come up for grabs is Global Radio’s Classic FM in September 2011. This licence has the most valuable frequencies. Classic FM is Britain’s most successful commercial radio station and is listened to by 5.7 million people a week. It makes up to £10 million a year and its FM frequencies can be awarded to any “nonpop” broadcaster.

Absolute Radio and talkSPORT, which is owned by UTV, reach about 1.2 million and 2.5 million listeners a week, respectively, on their AM licences and also have the right to be carried on digital radio.

Under existing rules, Ofcom has to ask for one round of sealed bids and the regulator has very little discretion to rule out the highest bidder on quality or other grounds.

Present fees are modest. Absolute Radio and talkSPORT pay a flat fee of £100,000 a year. Global’s Classic FM pays 6 per cent of its revenue and £50,000 a year.

The incumbents hope that the auction process will be scrapped. Last month, the Government’s Digital Britain review rejected a proposal to extend the national commercial licences without an auction, but said that it would keep that decision “under review”.

Andrew Harrison, the chief executive of the RadioCentre, the radio industry trade body, said: “It seems illogical to have an auction of analogue licences when we are trying to go to digital.”

A spokesman for UTV, talkSPORT’s owner, said: “If we didn’t win, we’d run the station only on digital.”

Friends in need

Friends Reunited, the original social networking site, is poised to be put up for sale as part of wider ITV cutbacks that could lead to 500 jobs being lost.

The website, which brings together old school friends, was one of the best known in the UK when ITV bought it for £175 million three years ago after a fierce auction.

But Friends has stagnated since the arrival of more advanced social networking sites, such as Facebook, and ITV has failed to nurture its acquisition successfully. The site, which ITV recently made free to access in an attempt to boost its advertising take, is now thought to be worth less than the amount the broadcaster paid for it.

The proposed sale forms part of an expected programme of cuts at the broadcaster. The group, which will report its full-year figures on March 4, could shed up to 10 per cent of its 4,500-strong workforce as it struggles with falling advertising revenue. In November, ITV said that advertising revenues would fall 9 per cent in the Christmas quarter and were unlikely to recover in the first few months of 2009.It received a further blow when its Project Kangaroo – a rival website to YouTube jointly owned with the BBC and Channel 4 – failed to win Competition Commission approval.

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