BBC sale attracts interest

The sale of the BBC's transmission business, scheduled to take place later this year, is attracting a high level of interest, sources close to the situation said yesterday.

Potential bidders include several domestic and international telecommunications companies, at least two cable companies, and NTL, the rival ITV transmission service.

A memorandum on the sale is to be sent to interested parties shortly. This is expected to detail the terms of the BBC's long-term contract with the new company. It is being set in a way that maximises the proceeds of the sale while providing the Corporation with flexibility to use alternative transmission services at some stage in the future.

The Government has already pledged that privatisation will not mean the BBC paying any more for its transmission than it does at the moment.

No decision has yet been taken by the BBC on whether it will be using the existing transmission infrastructure, which is analogue-based, in its plans for digital television. Were it to do so, the newly privatised company would have to invest heavily in new technology.

The recent sale of NTL for pounds 235m to International CableTel provides a benchmark for valuing the BBC's transmission services. The four transmission sites in the UK devoted to the World Service are being parcelled into a separate business, although bidders for the domestic service can also bid for the international side.

NTL would have the opportunity to make big efficiency savings were it the successful bidder, since it shares many of the sites occupied by the BBC's service. However, the resulting reduction in competition may prove unacceptable to the Government.