Delays give mixed signals on the future of commercial DTT
Published 26/02/2009 | 00:00
THERE was precious little celebration last week when the Competition Authority rubber-stamped plans for a €165m investment in Ireland's commercial Digital Terrestrial Television (DTT) market.
Swedish DTT giant Boxer and Denis O'Brien's Communicorp may have gotten the regulatory nod to launch Ireland's new paid-for TV platform, but their ambitious plans to woo customers with DTT this September appear to be growing more remote.
Last November, their Boxer DTT consortium was given a key contract from RTE's networks division, which is responsible for building the infrastructure for Boxer as well as RTE's own public service DTT.
Sources close to the national broadcaster confirm that the contract has yet to be returned, and RTE's patience seems to be fast evaporating.
"We've spent €40m on equipment already," said one source in RTE.
"We're not ordering the next piece of equipment until we get that contract back."
Boxer DTT's original launch date of last month has long been ruled out, but now even their revised plans to launch the service in September are looking decidedly shaky.
"Unless we get that contract back very soon, it'll be very hard to get this thing up and running by then," an RTE source said.
Meanwhile, as RTE itself contemplates a hefty fall in revenues over the coming years, the "prudence" of investing massive sums in DTT this year could be questioned, since the EU doesn't require the launch of the new technology until 2012.
Communications Minister Eamon Ryan has always said he wanted both commercial and public service DTT to launch "in tandem", which has left RTE aiming to launch its DTT system by the September deadline.
But if Boxer DTT was to significantly overshoot that September deadline, would it not be "prudent" for RTE to hold off as well, given the economic carnage already assailing the national broadcaster?
It's all a far cry from that triumphant sunny day last July when Boxer DTT was declared the surprise winner in the tender to provide commercial DTT.
Having fought off a consortium backed by RTE and cable operator UPC, and another backed by TV3, Setanta, Eircom and UK company Arqiva, Boxer boldly promised to spend €20m marketing the next frontier in paid-for TV and allocated a further €30m to "customer service".
Glowing spreadsheets showed the project would have 117,000 customers by 2010 and would be "cash flow positive" by 2012, projections chairwoman Lucy Gaffney insisted were "recession-proof" since the consortium would be cheaper than other players in the paid-for TV market.
"I get irritated with these people talking about recession, we're not as buoyant as we were but we're not in the doldrums yet," she added, for good measure.
If we weren't in a recession for then, few could argue that we're not in one now, and a particularly horrific one at that.
And in these changed times, few in the industry can see any prospect of Boxer launching its service in September with all its original bells, whistles and projections still intact.
The consortium itself this week declined to answer detailed questions on how the project is progressing, offering the generic "negotiations are ongoing" as its only comment.
Sources at the group's "technology partner" BT profess to be none the wiser on the impasse.
"I can tell you we're in a holding pattern, that's about it," said one.
The Broadcasting Commission of Ireland (BCI), the body which awarded the contract to Boxer, said it "wouldn't be appropriate" for them to comment in detail on negotiations with Boxer. "We are obviously keen that they would be successfully concluded", the BCI added in a statement.
On further questioning, the commission also insisted it was "satisfied with the progress made to date", an upbeat sentiment that even Boxer DTT doesn't lay claim to.
The Department of Communications, which ultimately oversees the entire project, was quick to point out that DTT was primarily an issue for the BCI and not for the department.
But the department was willing to be drawn on the suggestion of whether RTE could defer its roll out of public service DTT until 2012 if Boxer's offering was similarly delayed.
"While there is an obvious synergy between the commercial and public aspects, the department expects RTE to deliver on the 2007 (Broadcasting) Act obligations (to achieve analogue switch-off by 2012) and to ensure the project does not lose its momentum," the department said.
"To achieve analogue switch-off in 2012, public service DTT must be available a number of years in advance."
Some answers then, for RTE. But the greater question of the immediate future of commercial DTT remains very much in the air.