Murdoch and Packer fail in bid for Australian pay television licences

SYDNEY - A consortium consisting of the biggest media names in Australia, including Rupert Murdoch and Kerry Packer, has lost its bid to enter the country's pay television industry when the government awarded the inaugural licences to two unknown companies, writes Robert Milliken.

Canberra's decision stunned the television industry because the Murdoch-Packer consortium had been expected to win one of the licences by the sheer weight of its participants. Besides the two media moguls, it includes Telecom Australia, the state- owned telecommunications company, and two existing commercial television networks, Channels Seven and Ten. The third commercial network, Channel Nine, controlled by Mr Packer, is also a member.

The companies that won the two licences to start broadcasting satellite television in Australia by next April are Ucom and Hi Vision, both of Sydney. A third satellite licence is already reserved for the state-owned Australian Broadcasting Corporation. Little is known about either successful company, except that some directors are people with experience in the legal and electronic sides of the media.

The second shock came with the high prices both companies bid for the licences - Adollars 212m from Hi Vision and Adollars 177m from Ucom, a total of almost Adollars 400m ( pounds 182m). The price bid by the Packer-Murdoch consortium was not disclosed last night, but it was considerably less than these.

The plans to introduce pay television next year have been dogged by controversy, which these decisions inflamed further. There was criticism in media circles about the rules for the tendering process.

The rules also excluded existing Australian media owners from one of the two commercial satellite licences. Time Warner, the world's biggest media company, was among the 50 applicants for the licences, but also lost because its price was too low. There had been a general expectation that the bids would be for Adollars 60m to Adollars 90m.