BDB tipped to emerge as digital winner

Cathy Newman
Monday 23 June 1997 23:02

Analysts are gambling that British Digital Broadcasting, the consortium involving BSkyB, Carlton Communications and Granada Group, will today win at least one, and possibly all three of the licences for digital terrestrial television in the UK.

The Independent Television Commission said yesterday it had all the information it needed and would announce the licence awards today.

However, as a condition of awarding the licence Sky, the satellite broadcaster, last week had to drop its equity stake in BDB over competition worries. The new deal allows Sky to supply programming to BDB, and gives the company a pounds 75m rebate for losing its equity stake. Carlton and Granada are to share Sky's stake, at a cost of pounds 50m each.

Sources said yesterday that European competition authorities had intervened over Sky's stake in BDB only after Digital Television Network (DTN), the rival bidder for the terrestrial multiplexes, lobbied the European Commission over its concerns about Sky's presence in the consortium.

The satellite operator had been expected to make a public announcement about the terms of the deal with BDB yesterday morning. However, when news failed to emerge, analysts speculated that a statement would coincide with today's licence awards by the ITC.

Although some City analysts had worried that the ITC would fudge the issue by splitting the licences, most said the timing of the ITC's announcement might mean that BDB had won all three licences.

Jason Crisp, media analyst at Societe Generale Strauss Turnbull, said: "If you were going to bet on it, you'd have to choose BDB. But you can't rule out a split."

Mathew Horsman, media analyst at Henderson Crosthwaite, said: "The timing's too suspect. It may be a split award but BDB will be in the picture somewhere. If not, the ITC will have a lot to answer for, having put BDB through the expense and hard work of rejigging their bid."

Observers continued to express the view that, whatever the outcome of the ITC's deliberations, the watchdog was likely to be threatened with court action. Anthony de Larrinaga, media analyst at Panmure Gordon, said DTN could use legal action to try to gain licences if it failed to win any of the three multiplexes.

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