Digital TV launch faces delays

The consortium formed by British Sky Broadcasting and British Telecom may be forced to postpone next year's launch of a digital satellite television service because of delays in gaining approval from regulators in the UK and Europe.

Investors in the service, called British Interactive Broadcasting (BIB), fear the European Commission is taking much longer than expected to give the plans the go-ahead, which would involve injecting pounds 265m into the consortium to subsidise the cost of the set-top boxes that decode programmes.

British Sky broadcasting will use the technology to launch a digital television service in the spring, with the full interactive home shopping and educational channels provided by BIB in the summer.

It emerged this week that the rival digital cable service planned by Telewest has already been put back from the end of this year to coincide with BIB's launch.

Despite attempts by BIB to accelerate the process, Karel van Miert, the Competition Commissioner, has given no indication about whether he would agree to the proposed subsidies of around pounds 200 a box, to bring the price in retailers down to about pounds 200. The EC is understood to have indicated that it needed extra time examining the plans, which could become a template for other digital services across the European Union.

Though Oftel, the UK telecommunications watchdog, is thought to be closer to approving the scheme, it has also not reached a final conclusion. The partners, BT, BSkyB, the Midland Bank and the Panasonic parent group Matsushita, had hoped to hear from all the regulators involved by the middle of this month.

The Independent Television Commission and the Department of Trade and Industry are also involved.

An industry source said it looked as though the EC would not reach a decision until late September at the earliest and time was "critical" for BIB to meet the spring deadline.

Electronics groups which intend to make the set-top boxes, led by Matsushita, have been unable to invest in production facilities until the regulators give BIB the go-ahead. More time would then be needed to test the systems and distribute the boxes to retailers.

A BIB spokesman yesterday insisted the launch dates for both the television and interactive services would not be put back.

He added: "If we want to delay it by a month or two then we can, but at the moment we are working to the original schedule."