Hollick invests pounds 120m in bid for digital terrestrial licence

Lord Hollick's United News & Media is joining Digital Television Network, one of two bidders for the licence to run digital terrestrial television, with a promised investment of pounds 120m over four years.

United has always been part of DTN's programming submission to the Independent Television Commission, but until now it has not been financially involved in the bid.

It was unclear last night whether Lord Hollick's late commitment of funds could make any difference to the ITC's deliberations, which are already well advanced.

The ITC is expected to award the licences by early next month. DTN has so far been widely regarded in the City as the outsider, with most analysts expecting all three multiplex licences to go to the rival British Digital Broadcasting, a consortium of BSkyB, Carlton and Granada.

Bids for the licences had to be in by the end of January and in theory could not be altered in any way thereafter.

None the less, the addition of United will be seen as a big boost for DTN, which had appeared to lack the financial and industrial credibility of the rival bidder. DTN's only backer until yesterday was NTL, the television transmission business owned by International CableTel. Other potential partners, including Merryl Lynch and NatWest, dropped out before the bid was submitted.

Barclay Knapp, chief executive of NTL, said he was confident the late involvement of United would not be ruled out of court.

"The bid is still as it was when we submitted it on 31 January, but United will become a 30 per cent shareholder in DTN if we are successful," Mr Knapp said.

BDB did not return calls last night but was widely believed to be considering an appeal.

One analyst said: "It's all very well for DTN to say the bid as submitted to the ITC has not been changed, but the ITC cannot fail to take this latest development into account. It's a crafty move".

There has been speculation that the licence might be split, with two of the multiplexes on offer going to DTN and one to BSkyB.

This is believed to be the approach most favoured by the Government, which is concerned about BSkyB extending its present near-monopoly of subscription television on to rival platforms.