BT challenges the radio stars as it plots digital revolution

independent.co.uk
BT challenges the radio stars as it plots digital revolution
By Tim Webb
Published: 06 November 2005

BT is considering bidding for a chunk of the new digital radio spectrum that telecoms regulator Ofcom is making available.

The company, which reports first-half results this week, wants extra digital capacity for new services such as its Livetime joint venture pilot project with Vodafone, which broadcasts live television and radio on users' mobile phones.

Emma Lloyd, Livetime's chief commercial officer, has told City analysts that BT is exploring the possibility of bidding for the new national digital radio multiplex, whose release was announced last month by Ofcom. "We would be crazy not to," she told them.

The regulator will award the multiplex in early 2007, and analysts said BT's interest was preliminary.

Broadcast digital spectrum is specifically designed to be received on the move and so would be suitable for transmitting content-rich services, such as BT Livetime, to mobile phones. Digital television spectrum, which will become more available as the analogue television signal is gradually switched off, is not suitable for mobile phone reception and other digital spectrum is scarce.

In 10 days' time, Ofcom finishes its consultation on its proposals for releasing the new digital radio spectrum, which also includes three regional multiplexes. The new national multiplex will be able to carry up to 10 stations. The regulator will award it to whichever consortium can offer the most distinctive radio stations.

Analysts say BT may take a 50 per cent stake in any bidding consortium, with a radio broadcaster, such as Emap or Chrysalis, taking responsibility for the radio stations.

Radio executives argue that a successful bid would need at least £100m of investment. They say that other media groups, such as ITV and Channel 4, could also be interested.

Channel 4 and UBC Media Group jointly operate the digital talk radio station Oneword.

Radio group GCap is the only company that owns a national radio multiplex, Digital One, whose stations include youth pop station Core.

Digital radio is not yet economic. GCap has sunk at least £50m into Digital One, but hopes it is nearing profitability.

BT is currently testing the Livetime service, which broadcasts television channels including Sky News and Sky Sports, with 1,000 users within the M25 area.

If successful, it hopes to roll this out nationally in the first half of next year.

BT declined to comment.

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