ONdigital set to oust BSkyB in pubs

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The Independent Online

Ondigital, the Tv venture, is in talks with Bass about replacing BSkyB's pay television service in 1,600 of its pubs.

Ondigital, the Tv venture, is in talks with Bass about replacing BSkyB's pay television service in 1,600 of its pubs.

The plans follow BSkyB's imposition in September of a near 40 per cent increase in the price paid by pubs wishing to show its pictures. Bass has already withdrawn BSkyB's service from 500 of its establishments.

The threat comes as the Office of Fair Trading (OFT) has launched an investigation into BSkyB's alleged monopoly of sports coverage in pubs. OFT officials have written to trade associations to canvass opinion about BSkyB's pricing system. The probe follows complaints from trade bodies and licensees about BSkyB's conduct.

They are likely to receive an angry response from both Bass and Whitbread, which is also reviewing its use of BSkyB's platform in its 3,000-strong estate. Both have reacted furiously to the price rises which BSkyB has imposed. Bass has calculated that the average charge has risen by 38 per cent.

The charge, which is dependent on a valuation of the particular pub, can now be as high as £10,000 per year. The increase coincides with the decision of ONdigital, the rival digital platform owned jointly by Carlton and Granada, for the first time to offer its service to pubs. The 500 pubs from which Bass has chosen to withdraw BSkyB's coverage were considered to be those which struggled most to justify the increased cost of the service.

However, the move was seen as a veiled threat to the pay-TV company that it would not tolerate the imposition in any of its outlets. Bass is incensed that the price hike has come at a time when beer prices are rising at below the rate of inflation. The emergence of ONdigital as rival provider may force BSkyB to climb down. A spokesman for the OFT said that the consultation with trade associations was part of an ongoing, wider review of BSkyB's activities.

BSkyB's eagerness to maximise its revenue follows the £1.1bn investment it has put up for live Premier League football rights. Although BSkyB is not considered to have overpaid for its package rights, the same cannot be said of NTL. Last month, the cable company withdrew a £328m bid for the Premier League's pay-per-view package.

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