Ulster Television (UTV) is to roll out an all-Ireland Internet service in a bid to build a new media presence. The company announced the plan yesterday as it revealed record operating profits - up 43 per cent to £11.9 million sterling (#15.3 million).
UTV has bought DNA (Direct Net Access), Northern Ireland's leading Internet Service Provider (ISP) in a deal worth £4.25 million. DNA will be rebranded under the UTV name.
UTV managing director Mr John McCann told The Irish Times that the company would be trying to leverage the UTV brand, and the content it provided, to add to the services DNA would offer. He said the company was prepared to invest the monies necessary to make it a major player in Ireland.
It is understood UTV may have to spend up to £10 million over the next few years to build the company. UTV may also acquire other companies to grow DNA. DNA has 3,000 customers in the Republic, according to its managing director, Mr Scott Taunton, who holds a 10 per cent stake in the company.
The company will face tough competition from other ISPs in the Republic. Apart from well-established ISPs owned by Esat and Eircom, others, such as Princes Holdings and NTL are also planning Internet offerings. DNA is 45 per cent owned by Mr Martin Lyons (25) who receives £1.9 million, and 45 per cent by Golden Mile which owns Computerstore in Belfast. It also receives £1.9 million, while Mr Taunton receives £425,000. The deal comprises £500,000 cash and £3.75 million convertible loan stock.
Mr McCann said the acquisition was "a fairly natural progression. Internet is the new media, we are the old media, I suppose. It is all about understanding your audience needs and providing information and entertainment".
UTV's turnover last year was £38.3 million (#49.27 million). Operating profits rose, but pretax profit fell to £7.8 million from £12.5 million in 1998, because of a restructuring charge.
UTV shareholders include Canwest (29.9 per cent) which is a major shareholder in TV3, management (10 per cent) and institutional and other investors.
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