BT's TV ambitions date back to a £600m bid for ONdigital

Click to follow

BT made a £600m bid for ITV's failed ONdigital service, The Independent on Sunday can reveal. Carlton and Granada, which controlled the pay-television venture before merging to form ITV, rebuffed the offer made to the ONdigital board in 2001.

The companies said BT should pay more than £1bn. But the next year, the loss-making venture, renamed ITV Digital, went bust.

The revelation shows how longstanding are BT's broadcasting ambitions. The company, which last week reported that the past quarter was its best for four years, plans to launch its own television service this year called BT Vision.

It had originally said it would be launched this summer but the timetable has slipped to the autumn. Rumours that it could even be put back towards the end of the year are denied by BT.

Viewers will be able to watch the service through a set-top box and BT broadband.

The box, which will also be able to record programmes, will broadcast live content as well as showing downloaded programmes. BT has already signed content deals with Paramount, Warner Music, the BBC and Big Brother producers Endemol.

The telecoms giant hopes BT Vision will help to keep broadband customers loyal, as well as generate income by selling content and encouraging viewer interaction. It could also help offset shrinking revenues at BT's fixed-line phone business

The IoS first revealed that BT was working on a broadcast project - which it originally dubbed "Sky Plus Plus" after Sky's personal recorder - back in 2004. The company has insisted, though, that it is not turning into a broadcaster because it does not plan to make content for the service.

BT's television ambitions became serious in 2001, as demonstrated by its failed bid for ONdigital. That was when the post-privatisation ban on broadcasting, imposed on BT by the Government, was lifted.

The then chairman, Sir Christopher Bland, considered setting up a cable television service, and options included partnerships with BSkyB and ONdigital to secure content.

The company was heavily in the red at the time but made a £5.9bn rights issue in the same year to shore up its balance sheet.

BT now faces stiff competition from BSkyB, which this summer plans to launch its own television-over-broadband service with Easynet, the broadband company it bought last year.