Plans for digital terrestrial TV in tatters after pullout
PLANS to launch a new commercial television platform in Ireland are in disarray after the final bidder for the multi-million euro contract bowed out in recent days.
Easy TV, a joint venture between RTE and UPC owner Liberty Global, was offered the contract for commercial Digital Terrestrial Television (DTT) a fortnight ago when negotiations with an Eircom-led consortium collapsed.
An RTE spokesman last night confirmed that Easy TV had told the Broadcasting Authority of Ireland (BAI) it was "declining their offer to pursue negotiations" on the DTT contract.
He added that Liberty and RTE had "carefully considered" the contract but had agreed not to proceed "due to the significant lapse in time and the altered circumstances since Easy TV's original application in 2008".
The development leaves the BAI in a major quandary, since all three groups who battled it out in the 2008 DTT beauty parade have now withdrawn from the process.
The BAI is expected to issue a statement confirming the situation early next week and may also announce a new tender process to reignite the embattled project.
The failure to secure a commercial DTT operator is also a significant challenge to plans for Ireland's four free-to-air channels to switch from traditional analogue to the DTT platform in time for the EU's 2012 deadline.
DTT will require new set-top boxes, which the public will be far more likely to buy if they can also receive commercial channel packages.
The commercial operator was also expected to help foot the financial bill of marketing DTT.
A spokeswoman for Communications Minister Eamon Ryan yesterday said he was "disappointed" by Easy TV's withdrawal, but was unable to comment further while the BAI process was still ongoing.
She stressed, however, that the minister expected RTE to begin rolling out the four free-to-air channels on the DTT platform towards the end of the year, regardless of any impasse with commercial DTT.
RTE's networks division is understood to be working actively towards this deadline, despite the considerable marketing challenges of launching DTT without a commercial operator.
The withdrawal of all three DTT bidders is in stark contrast to the summer of 2008, when the contract was hotly contested by three high-powered groups.
Boxer DTT, a joint venture between Denis O'Brien's Communicorp and Swedish group Boxer, initially won the contract and planned to invest €165m in the new system. However, they backed out after almost a year of negotiations with the BAI and RTE's networks division, citing the changed economic circumstances.
The contract then passed to the second-placed One Vision, a consortium fronted by PR man Fintan Drury and backed by Setanta, Eircom, TV3 and UK company Arqiva.
Eircom went on to take a majority stake in the consortium, but the bid was abandoned a fortnight ago after almost a year of negotiations, triggering the eventual award to Easy TV.
Several of the parties involved retain an interest in DTT and would be likely to reapply should the BAI re-advertise the licence.
The new applicants are expected to feature different spending and pricing commitments, given the current economic environment.