Chorus, NIL line up to buy RTE network

CHORUS, part-owned by Independent News & Media, and NTL, which owns the former Cablelink, have emerged as potential buyers of RTE's transmission network.

The Government plans to sell 72 per cent of the network next year, although enabling legislation in a new Broadcasting Bill has yet to pass the Oireachtas.Independent owns half of Chorus, formerly known as Irish Multichannel, which offers digital television, telephone and Internet services.

People close to the sell-off of Eircom's businesses - in which Independent's chairman, Dr Tony O'Reilly, is said to have an interest - believe Chorus may be sold if Dr O'Reilly acquires Eircom's multimedia interests.

Chorus's chief legal and regulatory officer, Mr William Fagan, did not comment.The company claims more than 250,000 customers for its television services. Its other shareholder is US group Liberty Media, which is controlled by AT&T. Liberty has signalled that AT&T wants to sell it off.Mr Fagan yesterday said Chorus had an interest in becoming a partner in the transmission network. When asked about the size of the stake Chorus wanted to buy, he said: "We'd need to see the terms on which it becomes available."NTL's spokeswoman said it never commented on "speculation". Yet it is understood the company is prepared to bid for the entire 72 per cent. NTL has about 360,000 subscribers for its basic television cable service. It recently introduced a bundled Internet, telephone and television service.

The sale of RTE's network will be managed by a London investment bank, N.M. Rothschild. The bank also handled the sale to NTL of Cablelink, formerly owned by RTE and Eircom. NTL paid £535 million (€679 million) for the business.The sale of the transmission network is part of the process which will see the introduction of digital television services distributed via "multiplex" channels. RTE, TV3 and TG4 have secured multiplex licences and others will be issued by the Director of Telecommunications Regulation.

At an IBEC conference in Dublin yesterday, the chairman of the RTE Authority, Mr Paddy Wright, said the 72 per cent stake was valued at £40-£70 million.The Government's consultants, AIB, favoured the £40 million valuation, he said, adding: "That is subject to how the Government wants to handle the sale."The company wanted to save £15 million by 2003 in a transformation designed to cut its staff by 190 this year and 140 in 2001. Referring to the job cuts, Mr Wright said: "That might not be enough. We don't know yet."

He confirmed RTE had sought a £50 increase to £120 in the television licence fee. Earlier, in a speech, he referred briefly to the fee in calling for an amendment to the Broadcasting Bill providing for the network's sale.Mr Wright said: "As I understand Section 24 of the Bill the [RTE Authority is to be precluded from spending income from the television licence fee on the supply of Internet services. "I believe the last thing we should do now is exclude the possibility of public funding for interactive services. As broadband technology improves land becomes more widely available, it's possible the Internet may become a primary distributor of broadcast content.

"If convergence means anything, it means that our online and multimedia services are now of the broadcasting environment and they merit public funding for the same reasons as other areas of our public broadcasting."