A group of investors led by radio and television entrepreneur Mr David Harvey have been awarded a licence for a new Dublin TV station, which should be on air by the summer.

The new station, City Channel, will broadcast on the NTL digital platform to an initial market of 90,000 homes. The promoters have obtained an exclusive agreement from NTL for three years, although this may be extended.

The promoters believe that, as NTL digital is rolled out, the potential audience could grow by 25,000 homes per annum.

City Channel will broadcast on a 24-hour basis. It will be based around a number of "commercially focused and sponsored programmes", said Mr Harvey.

Typically these will feature subject matter currently not catered for by conventional broadcasters such as property,motoring, shopping, entertainment, local politics and gay programming, he added.

He said the channel would derive its income from a combination of sponsorship, conventional advertising and premium text revenues.

"City Channel believes it will have sufficient audience to generate the revenues necessary to make the channel a commercial success," Mr Harvey said.

While the investors have not been revealed at this stage, Mr Harvey has previously worked with businessman Mr Paul Coulson.

He said rather than attempt to enter a crowded marketplace with a "highly geared, high-cost model", City Channel would operate as a low-overhead company which could provide a service at a much lower cost compared to other operators

Mr Harvey, who is a well known broadcaster from Crimeline, has spent many years in the independent production sector. He has also invested in the music-driven radio station Dublin's Country, where he holds a 15 per cent stake.

Apart from City Channel, former Eircom executive Mr Michael Murphy and the former managing director of advertising agency Carat Ireland, Mr Pat Donnelly, are also believed to be planning a television service. However, they have yet to receive a licence from the Broadcasting Commission of Ireland (BCI).

Competition in the television market has grown significantly in the past year with the arrival of Setanta Sports, which is available on the NTL and Sky platforms. Competition is also provided by RTÉ One, RTÉ Two, TG4 and TV3. Also competing for Irish advertising revenue are various Sky channels, UTV, Nickelodeon and MTV.

Meanwhile, the BCI announced yesterday that a special-interest licence for the Dublin City area has been awarded in principle to the incumbent Dublin City Anna Livia 103.2 FM.