BBC transmitters head for pounds 200m sell-off

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The Independent Online
THE Government is to press ahead with preparation for the privatisation of the BBC's transmitter network, despite protests from the Corporation.

This week it will announce that the investment bank Hill Samuel and the consultancy National Economic Research Associates (Nera) have been appointed to put a price tag on the network, which could be worth up to pounds 200m.

It is believed the advisers have been given a wide-ranging brief to consider full privatisation of the network of 500 TV masts and sites.

They will also examine the prospects for a joint venture with the private sector, as well as investigating the efficiency of the transmitter division.

The appointment of independent advisers signals the determination of the Government to remove the network from the BBC's control. Nera is believed to be a strong proponent of auctioning the network to the highest bidder, while Hill Samuel's most noted TV work was as adviser to the Independent Television Commission during the ITV auction three years ago. It is also advising on the future of the National Grid.

But the BBC is expected to put up a vigorous fight. A report by consultants Coopers & Lybrand earlier this year concluded that it would cost the BBC pounds 24m a year extra of licence-payers' money to hive off the network.

The report, commissioned by BBC management, also warned that privatisation would slow down the introduction of a new era of digital TV, which could make way for the launch of BBC3 and BBC4. However, the Government remains unconvinced by these arguments.

Experts believe the land alone could push the value of the network up to pounds 200m - pounds 130m more than generated from the sale of the ITV transmitter network three years ago.

'They own half the highest hills in the country and there is an argument that says you will make money from that no matter how bad you are at marketing the services,' said one consultant.

Pro-privatisation factions in the Government also cite the selling off of the ITV and Channel 4 network as proof that there is substantial extra business to be won in new markets.

Since it took over the network, National Transcommunications has nearly doubled its TV income through new business, such as contracts with the coastguard and ambulance services.

Nera and Hill Samuel are expected to conclude their study early next year, in time for the bill on the BBC's charter renewal.

(Photograph omitted)