Digital TV licences won by O'Brien consortium

BOXER DTT, a consortium 50 per cent owned by Denis O'Brien's Communicorp group, has won the three national digital terrestrial television (DTT) multiplex licences.

This paves the way for the group to launch its digital television offering in January 2009.

The Broadcasting Commission of Ireland (BCI) awarded the 12-year licence to Boxer DTT, a joint venture between Communicorp and Swedish DTT operator Boxer TV Access.

DTT will replace the analogue television signal, which will be switched off at the end of 2012, obliging households with no satellite or cable television services to upgrade to DTT using a set-top box and smart cards.

Boxer DTT and Communicorp chairwoman Lucy Gaffney said DTT would bring Ireland to "a new level, a new dimension in television viewing".

Boxer beat Easy TV, a collaboration between RTÉ and NTL/Chorus parent Liberty Global, and the OneVision consortium, which included TV3, Setanta Sports, Eircom and Arqiva, to the licence.

The permit is subject to negotiations with the broadcasting commission and contracts are due to be signed on September 29th, with Boxer hoping to sign up customers from the autumn.

But the real boost to its subscriber numbers could come when analogue services are removed.

"The most important thing is that nobody's left behind," Ms Gaffney said. "People will need to get a set-top box, otherwise they will be staring at a blank screen."

The consortium, which has BT Ireland as a business partner, will invest approximately €115 million in the broadcast network and multiplexing services, €30 million in customer support services and €20 million in sales and marketing in its first four years.

Shareholders have invested €43 million in the business to date. The firm expects to employ 50 people at its head office.

Boxer's commercial service will run alongside a free-to-air public service multiplex, which will be operated by RTÉ.

The company's starter-level pack is expected to cost €9.99 a month for seven channels, not including the four Irish free-to-air channels.

It will offer two alternative packs of up to 30 channels, according to its licence application, with prices in the region of €22.99 and €34.99 a month. The price of the set-top box will vary, depending on the product.

It is also planned to offer a "pay as you go" option. Customers will be able to choose their combination of channels on an "a la carte" basis.

Ms Gaffney said she envisaged that different family members would purchase separate smart cards allowing them to tailor their choice of channels to reflect their tastes.

Boxer hopes to act as an alternative source of television channels to digital satellite operator Sky and cable operator NTL/Chorus.

Ms Gaffney said Boxer's consumer research showed people only wanted a finite number of channels.

She said she believed Boxer had won the licence because of the experience of Boxer TV Access in rolling out DTT services in Scandinavia, where the company has 710,000 subscribers.

Moreover, she added the licence had been won because the firm was purely a DTT operator and not a broadcaster, eliminating a potential conflict of interest.

What is digital terrestrial television?

Digital terrestrial television (DTT) is a way of sending digital signals - pictures and sound - to an aerial.

A process called "digital multiplexing" squeezes the digital signal so that it takes up less space than an analogue signal.

A set-top box on the viewer's television set decodes the digital signal received by the aerial so that it can appear as pictures and sound.

DTT will be rolled out to households across EU member states by 2015 in order to free up the analogue spectrum currently taken up by "traditional" television services. In Ireland, it is hoped that the switching off of analogue services will occur in 2012. From that point on, television services will no longer be available through an aerial without a set-top box from a DTT multiplex operator.

As well as the commercial services that will be operated by Boxer under licence from the Broadcasting Commission of Ireland (BCI), RTÉ will operate a single DTT multiplex on a free-to-air basis to ensure the continued availability of the four existing free-to-air channels - RTÉ 1, RTÉ 2, TG4 and TV3 - so that people do not lose out as a result of the digital switchover.