Bigger choice in free satellite TV

By JAMES GARDINER

Up to eight new free-to-air television channels could be available shortly.

TelstraClear has put up for sale its half of a transponder on the Optus B1 satellite, raising the prospect of digital television broadcasts from a range of small would-be broadcasters hoping to break into the television market.

Secret talks are already underway with a range of large and small broadcasters. An announcement of which company or companies are the successful bidders could come as early as next week.

State-owned Television New Zealand and transmission company BCL, along with private companies TV3 (CanWest) and Sky TV are all believed to be interested, along with smaller players such as Mai TV of Auckland, City TV in Wellington and the Christian channel Shine, which screens on Sky's satellite network.

The attraction for the smaller players is that many have struggled to get bandwidth on the crowded VHF and UHF frequencies.

But there are concerns that one of the big players, such as TVNZ, or Sky, might try to buy the lot to keep out competitors for viewers and advertisers.

Satellite television offers the opportunity to get national coverage to anyone willing to spend about $500 on a small satellite dish and a set-top box, which converts the digital signal to analogue for TV sets.

Industry observers reckon that within a decade analogue television broadcasts will disappear, ushering in an era of high-quality, interactive viewing.

Unlike pay television, the set-up cost to receive free-to-air satellite broadcasts is one-off.

Already Television New Zealand is using the other half of the same transponder on the satellite to broadcast TV1 and TV2 but only an estimated 6000 homes are equipped to receive the satellite signal other than through the Sky decoders. Industry sources say the sale could raise between $3 million and $4 million, or up to $500,000 for each channel.

There would be an ongoing cost for each broadcaster of several thousand dollars a year to get the broadcast up to the satellite because the only link is at TVNZ's Avalon studios in Lower Hutt.

TelstraClear took over ownership of the transponder when TelstraSaturn, a telecommunications and cable TV company, merged with the telco Clear.

Spokesman Mathew Bolland said it had decided to sell now because television broadcasting was not the company's core business.

The company was interested in getting the best price it could for a surplus asset, not which broadcaster should get access to the satellite.

All parties involved have been asked to sign confidentiality agreements.

City TV managing director Jim Cross, who plans to set up a cable channel in the Wellington region next year, said "we're interested and we're in negotiations".