BBC launches transmission services sale

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The Independent Online
The sell-off of the BBC's transmission services, worth up to pounds 250m, was finally launched yesterday, with as many as a dozen confidential sales memoranda sent out to a list of potential bidders.

The BBC and its advisers, Lehman Brothers, declined to comment on its contents, but it is understood the sale will include 500 transmitters in the UK, all transmission and receiving equipment at the sites and the Warwick headquarters.

The sale is seen by many as a first step toward restructuring the BBC's sprawling operations, and is consistent with a management shake-up announced by John Birt, the corporation's activist director general, early this summer.

As reported in the Independent this week, the BBC's extensive communications network, including lines between the corporation's London head office and studios in the North, will not be part of the package put up for sale.

The transmission operations will be sold in two parts - the first covering the BBC's domestic television and radio services and the second incorporating equipment and services associated with the World Service, which is financed separately by the Foreign and Commonwealth Office.

Companies will be free to bid for both, but will be required to submit separate offers. The Government will receive the proceeds from the World Service sale, while the BBC will retain the full return from the domestic operations.

The seven World Service transmitters abroad, including a new facility in Thailand, will not be sold, for reasons sources said were "diplomatic rather than commercial", but the successful buyer of the World Service transmission operations will retain a contract to service the overseas sites. In the UK, three of four World Service transmitters are to be sold. The fourth, in Orfordness, is owned by the FCO outright and will not be sold.

The domestic operations will be sold on the condition that both BBC1 and BBC2 will be transmitted under contract for 10 years. In addition, the BBC's analogue radio, as well as its first-generation digital radio, will also be provided by the eventual buyer.

The service is to be guaranteed as to quality and price, and the BBC may also be in line to share in any savings achieved by the new owners within a set time frame.

Among the likely bidders for the services is NTL, the US-owned company that provides transmission services for ITV and Channel 4. The company declined to confirm yesterday that it had registered to receive the sales memorandum.

However, a spokesman said: "It has always been our intention to acquire the BBC transmission services, which we believe that we could run efficiently."

NTL, formerly state-owned, was privatised four years ago, and sold to a consortium led by Mercury Asset Management. It was sold to International CableTel, the US-based cable operator with extensive UK interests, earlier this year.