BBC shortlists three for £150m auction of technology arm

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The Independent Online

Three companies were last night vying to acquire the BBC's technology arm, thought to be worth between £100m and £150m, with the winner also due to receive a 10-year contract to supply the corporation's technology needs that could be worth £2bn.

Three companies were last night vying to acquire the BBC's technology arm, thought to be worth between £100m and £150m, with the winner also due to receive a 10-year contract to supply the corporation's technology needs that could be worth £2bn.

Accenture, the consultancy business, Computer Sciences Corporation (CSC), the Californian-based technology group, and Siemens, the information and communications group, were yesterday named by the BBC as the shortlisted bidders.

Analysts believe that the BBC contract is a groundbreaking deal because the corporation is the first public service broadcaster to outsource its technology requirements.

The technology company that wins the contract will be seen as occupying pole position once other public service broadcasters around the world follow the BBC's lead, as they are expected to do so, over the next few years.

The bidding process for the BBC's contract is being followed particularly closely in the US, where technology groups are hoping for an outsourcing boom as American broadcasters turn to outside contractors.

John Varney, the BBC's chief technology officer, said: "In terms of the effect on the service providers, they are at a point where they have tapped every market they can.

"The one that is left is the broadcast content market which does it all itself at the moment."

Mr Varney added: "We are embarked on a full outsource for the BBC, and given the BBC's prominent position in the media it is expected to lead to others following suit."

Analysts think it is a potential market worth between £25bn and £100bn.

Whichever of the three shortlisted BBC bidders wins will be expected to supply the corporation with all its broadcast engineering, its satellite equipment and the corporation's desktop infrastructure."

Previous bidders that have lost out in the race for the BBC deal include IBM, Hewlett Packard and LogicaCMG.

BBC Technology is part of BBC Ventures, which was set up by the corporation's former director general Greg Dyke, to exploit the commercial potential of the BBC's technological expertise. The group was asked to generate an extra £300m for the BBC's coffers.

However, Roger Flynn, the group's chief executive, achieved the £300m target early, and with the sale of BBC Technology will exceed that target by at least £100m. As a result Mr Flynn has left the BBC.

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