TelstraSaturn, TVNZ under fire for outdated TV boxes

By PETER GRIFFIN IT writer

Rival broadcasters have questioned TelstraSaturn's plans to launch a nationwide pay TV service with TVNZ this year.

Industry figures said the company would be introducing outdated set-top boxes and going head-to-head with Sky TV's already well-established digital services.

TVNZ and TelstraSaturn announced last week details of a joint venture that will see TVNZ launch a digital free-to-air service on October 1 and TelstraSaturn a pay TV service in the third quarter of the year.

Both operators will deliver a digital version of TV One and TV2, offering better picture quality for viewers in outlying areas.

TelstraSaturn has also secured the rights to All Black games against Ireland and Scotland at the end of the year, challenging Sky's monopoly on sports content.

TVNZ has not yet decided what type of set-top box it will use for its free-to-air service. But TelstraSaturn is widely expected to use DGT400 set-top boxes from its Australian parent company, Austar United.

A source at Australian digital pay TV operator Foxtel, who did not want to be named, said the Austar boxes were rapidly being dropped in Australia because they did not meet emission standards, interfered with other TV and radio signals, and had been cracked by hackers trying to gain free access to services.

Wayne Wedderspoon, programme manager of standards at the Radio Spectrum Management Group, said TelstraSaturn had not yet been issued with a declaration of compliance for the DGT400 boxes.

The declaration was required under the Radiocommunications Regulations 1993 before the product could be supplied in this country, said Mr Wedderspoon.

TelstraSaturn executive Quentin Bright was unable to confirm that his company was planning to launch its services using the DGT400 box.

The company said last week that it saw no need to add interactive services to its initial offering, although competitor Sky had said it would begin services such as e-mail and interactive weather and programme guides over the next few months.

Brian Green, head of engineering at Sky, said reports from Australia indicated that the set-top boxes had significant problems.

"It is well known that this box interferes with the Channel Nine frequency in Australia.

"If one of these boxes turned up in a Sky subscriber's home and started to interfere with Sky transmissions, we would be less than silent on the matter," said Mr Green.

Technology commentator Bob Cooper questioned the lack of interactive services.

"People will find that what there is to do with it isn't worth their time for the most part. We are two full generations - seven to 10 years - away from a set-top box that does what is necessary to make interactivity a commercially viable service."

Mr Cooper said the Austar boxes provided TelstraSaturn with a cheap route into digital TV but little more.

While confusion surrounds TelstraSaturn's choice of technology, some have also asked whether the operator's belated arrival in the digital TV market would interest enough consumers.

Nick Wood, managing director of ihug, which also provides set-top boxes, said TelstraSaturn would be hard-pressed to serve up a viewing package that competed with Sky's digital services, which had about 235,000 subscribers.

"I don't understand the logic behind it at all, other than to aim at the sector outside urban areas. Sky has most of the good content wrapped up," he said.

TVNZ has announced that its set-top box will include the same Open TV software employed in Sky decoders. It has also said it will use TelstraSaturn's network of sales personnel, installers and call centres to market its boxes.

TVNZ's general manager of strategy, James Munro, said a single hardware vendor was initially expected to provide the boxes.

But the open-access nature of TVNZ's offering meant fully compatible set-top boxes were likely to be available from many retailers later.

A range of models, some including hard drives for digital video recording, would likely follow the initial set-top box launch.