DTT Commercial Multiplexes (was OneVision, Boxer etc...)

The Cush · 27-04-2009 04:04PM

Also from yesterday's Sunday Business Post

DTT deal collapse threatens rollout

Sunday, April 26, 2009

Ireland’s tortuous transition from an analogue based TV service to a digital one - scheduled to be completed by 2012 - looks like being even more protracted than anyone would have guessed.

The DTT strategy has been years in preparation - and had accelerated in a promising fashion last year. But the process has been stalled since January, as it was becoming clear that the Communicorp/Boxer DTT consortium would fail to conclude a deal to take up the DTT contracts it won last July.

The contracts would have given it the right to operate three commercial DTT multiplexes, alongside RTE’s free-to-air multiplex.

When it originally won the contracts, Boxer DTT promised it would have its DTT service running by January 2009.That should have meant its digital set-top boxes would be already in the shops.

Boxer has blamed the problems on ‘‘prevailing and anticipated economic circumstances, in addition to challenges in successfully concluding a contract with RTE Networks Limited, to the satisfaction of both parties, for the provision of transmission services’’.

It has since emerged that RTE warned the Broadcasting Commission of Ireland and the Department of Communications six weeks ago that the deal was floundering.

One of the problems that killed the deal, according to informed sources, was RTE’s request for a €20 million security from the Communicorp/ Boxer Group, which was not forthcoming.

It is also understood that RTE - which tried unsuccessfully to win the contract to operate the commercial DTT licence itself - had offered Boxer a contract that envisaged charging it €10 million a year to access the RTE digital transmission network.

In letters sent by RTE management to the BCI and the government, it’s understood that RTE said it had no confidence that a deal was achievable with Communicorp.

As a result, and given the changed economic circumstances since last July, it is understood that RTE’s director general Cathal Goan called on Minister for Communications Eamon Ryan to review the government’s approach to DTT ‘‘as a matter of urgency’’.

There is now a situation of complete uncertainty about DTT. The BCI has given the underbidder - a consortium that includes Eircom,TV3 and Setanta - two weeks to decide if it wants to pick up where Communicorp left off.

If it does not, under normal circumstances the next move would be to revert to the third bidder, the group led by RTE itself with entertainment firm UPC.

While there are good reasons why groups like Eircom or UPC might want to take on a project like DTT, in the current economic climate, it’s not at all certain if either would be prepared to make the investment. The media partners are all battling sharp downturns in revenue.

Realistically, the latest delay means it’s questionable whether or not Ireland will be in a position to switch off analogue TV services in 2012.RTE is supposed to be working on developing a whole new digital transmission network in preparation for the launch of a free-to-air DTT service in September.

Technically, it’s understood it will be able to provide a network that covers 80 per cent of households by the end of this year. That’s now also an uncertain project.

While it’s understood that RTE has already committed a budget of €40 million to this task (which will cost about €110 million to complete), it’s questionable whether there can be any market for a DTT service that has no commercial element at this point.

For DTT to be a success, it has always been understood that it would have to be a joint project between the public service broadcaster and a commercial player.

It’s doubtful now that RTE - facing a €68 million shortfall this year - has the funds needed to deliver any new content for a DTT service, as it had planned originally when its revenue position was secure.

There had been talk of an RTE Three channel on the digital platform. In all likelihood, all RTE could now offer in a free-to-air DTT package would be the channels that are already available to analogue customers - RTE One, RTE Two,TV3 andTG4.

Since availing of the service would mean buying a dedicated set-top box (at an estimated cost of €50), there’s no real reason for anyone to do so, since the analogue signal remains intact.

However, failure to switch off the analogue signal in 2012 would leave Ireland trailing behind the rest of Europe, which is proceeding fast with the transition.

The BCI is insisting that all remains on track for DTT and that it is hopeful that this matter can be resolved. BCI chief executive Michael O’Keeffe said the process was continuing and emphasised that a lot of work had already been done by the BCI on the matter, so any new contract could be completed rapidly.

‘‘There is still a very large market out there for analogue only service. It’s about 25 per cent of the market, and that hasn’t changed,” said a BCI spokeswoman.

However, if the BCI’s search for a party that has the interest and wherewithal to manage the commercial DTT service falls flat, the whole DTT project will be more or less starting again from scratch.

‘‘If we don’t sort this out,” said one insider, ‘‘we’re effectively handing this whole market over to Sky.”

Also from the Sunday Business Post, the BCI has it's term extended by a further six months while the Broadcasting Bill makes it way through the Dáil.

BCI term extended

Sunday, April 26, 2009 -

The board of the Broadcasting Commission of Ireland (BCI) has had its term extended by six months until October. The BCI said it requested the extension so the board could deal with urgent decisions, particularly in relation to digital television.

The BCI is due to be replaced shortly by a new Broadcasting Authority of Ireland, but that cannot happen until the long-awaited Broadcasting Bill becomes law.

The Broadcasting Bill is set to establish a whole new regulatory framework, changing some of the terms under which RTE operates and amending the rules for commercial broadcasting. It is also expected to include a clampdown on the advertising of unhealthy foods to children.

I wonder if the Broadcasting Bill will be further delayed if neither of the other two applicants take up the multiplex contracts, so that the whole DTT situation can be reviewed and the Bill amended (scheduled again for the week beginning 4 May 2009).

Koloman wrote: »

It seems that some people are upset over the decision of Boxer to pull out.

http://www.independent.ie/national-news/boxers-knockout-blow-leaves-digital-tv-on-the-ropes-1720326.html

Colum Kenny's article disappeared from the website yesterday afternoon, I wonder why?

Hissing Sideban · 27-04-2009 07:13PM

There were a couple of articles on the possible threat to DTT and analogue switch off due to the Boxer decision to pull out in Yesterdays Irish Business Post

See

Downturn forces RTE to review digital plan:
http://archives.tcm.ie/businesspost/2009/04/26/story41348.asp

DTT deal collapse threatens rollout: ThePost.ie
http://archives.tcm.ie/businesspost/2009/04/26/story41296.asp

Elmo · 28-04-2009 12:56PM

According to the Irish Daily Mail (I found it on the dart so I read it) said that Doherty Hanson (TV3's owners) are investing 110,000,000 into Setanta Sports. They currently own 22% of Setanta.

What will this mean for One Vision?

Sponge Bob · 28-04-2009 01:23PM

Setanta are less important than they were last summer when they bid , here is why .

http://www.guardian.co.uk/football/2009/feb/07/sky-setanta-premier-league-rights

tretle · 28-04-2009 07:32PM

Leagues has only a small part to do with how important they are to Onevision, they are the only part of Onevision with experience with pay tv.... Eircom have experience with billing etc...

Apogee · 28-04-2009 08:53PM

Elmo wrote: »

Go Digital Value Go Digital Select Go Digital Max ~
Number of channels* Over 60 Over 100 Over 130
Monthly Offer Price € 20.00 € 27.00 € 33.50

In UPC marketing terms, a radio station is considered a channel. A scan of the Cork cable output shows a total of 118 TV stations and 37 radio stations over 11 muxes.

The geographical variation is due to lower bandwidth on MMDS - typically carrying a total of 87 TV and 37 radio over 13 muxes.

Elmo · 29-04-2009 10:19AM

Apogee wrote: »

In UPC marketing terms, a radio station is considered a channel. A scan of the Cork cable output shows a total of 118 TV stations and 37 radio stations over 11 muxes.

The geographical variation is due to lower bandwidth on MMDS - typically carrying a total of 87 TV and 37 radio over 13 muxes.

I am going to have to scan all of my TV channel on UPC and then get back to you. I hate Marketing and PR people. Just filled with people like Lucy Gaffney

I hate it when you give proof and people still think they are right.

Elmo · 29-04-2009 10:29AM

tretle wrote: »

Leagues has only a small part to do with how important they are to Onevision, they are the only part of Onevision with experience with pay tv.... Eircom have experience with billing etc...

But what experience do TV3 have?

tretle · 29-04-2009 02:47PM

lol, theres a reason why I left out TV3, I don't think they have any relevant experience other than tv3 and 3e.Sure they are not very usefull but in the long run the way I see it is tv3 are another pocket in which setanta and eircom can use to back up onevision financially.
If TV3 bought Setanta there would only be too pockets instead of three so it would be less likely to launch judging by tv3 groups reluctance to spend large amounts of money.

Elmo · 29-04-2009 03:31PM

I think Doghety Hanson (sp?) are stuck with TV3 for the next 5 to 10 years. OneVision, 3e and the part ownership of Setanta could help in the future but currently their investment portfolio looks ill.

Setanta Ireland might be renamed 3Sports !!!! who knows

29-04-2009 04:54PM

Only in Ireland would you have one of the bidders[or a part of ie RTENL] being involved in the negotiations with the sucessfull bidder [boxer] with the power to act the maggot.

According to the SBP article above,they wanted a €20million deposit arrangement before even a penny rent.

That looks like sabotage to me even if prevailing economic circumstances were going to scupper the thing anyway and even if we all knew this whole project was going to flounder due to it being non viable as it missed the boat thanks to delay delay and basic incompetance whilst sky and fta/ftv satelite got more and more pervasive.

The €20 mill requirement was overkill...It was like pouring acid over the body after the life support machine stopped working.

Elmo · 29-04-2009 04:59PM

Deleted User wrote: »

Only in Ireland would you have one of the bidders[or a part of ie RTENL] being involved in the negotiations with the sucessfull bidder [boxer] with the power to act the maggot.

BOXER is a semi state company owned by the Swedish Government.

http://translate.google.com/translate?prev=hp&hl=en&js=n&u=http://www.boxer.se/%3Fpage%3D1&sl=sv&tl=en

I wouldn't be surprised that Communicorp were "acting the maggot" to be honest. The deposit was possible for carrying out any work that may be done to the network before the rent is paid or before Boxer start to role out their "network".

29-04-2009 07:28PM

A €20 million deposit was and is frankly a ridiculous ask.

Elmo · 29-04-2009 08:14PM

Deleted User wrote: »

A €20 million deposit was and is frankly a ridiculous ask.

Look we don't know what the issues where, the 20million may not have been anything to do with it, it could have been how much RTÉNL were willing to open up to Boxer, how many Boxer Technications would be needed. How much would Boxer pay for the Network?

Back in the Early 1990s Century Radio blamed RTÉ for over pricing there rental, later it was found that RTÉ were giving them an acceptable rate.

RTÉ NL deal with TG4, TV3, Today FM and other commercial enterprises on a daily basis. They have no need or want to ruin this on anyone.

watty · 29-04-2009 09:10PM

€20M is peanuts

Sponge Bob · 29-04-2009 09:37PM

1. Denis O Brien announced that Boxer would invest €165m , €20m is less than 12% of that , see here
2. Century Radio ...back in the day

That cost RTE quite a bit and they never saw a penny of it . They did not build a new network for Today FM 6 years later . RTE were down £3m ( €3.6m ) by May 1990 Alone thanks to Ray Burke .
3. The deposit was probably an upfront payment for the first 3 years ...the riskiest for RTENL with a c.€70m network to build .

Boxer was a failure from the word go, O'Briens people were saying last summer ( shortly after the off) that they could not see how they were going to make money out of it .

The €20m story is not even a good excuse , and good riddance anyway .

Capt'n Midnight · 29-04-2009 09:54PM

Elmo wrote:

Back in the Early 1990s Century Radio blamed RTÉ for over pricing there rental, later it was found that RTÉ were giving them an acceptable rate.

http://www.independent.ie/national-news/1m-legal-costs-are-refused-over-bribe-150190.html

The tribunal found that Mr Stafford had also given a false account as to how the Century figure of £375,000 for transmission charges were calculated.

The focus of the inquiries with which Mr Barry was concerned centered on the £35,000 payment to Mr Burke, a payment which the tribunal found to have been paid and received corruptly.

patrick whitty · 29-04-2009 10:10PM

why would any of us pay for channels we can on freesat for nothing
patrick

scath · 29-04-2009 10:44PM

I still see a market for pay DTT. Just I see DTT's future as a DTT/Freesat Combo with pay DTT for Sky/Setanta/Adult Channels. Of course if UPC were involved this would not suit them. But I suspect they would combo with DTT and just drop the Irish channels from cable. Essentially DTT would take over the MMDS market for them and they would sell subscription channels through pay DTT for those areas it could otherwise never reach. I think there's nowt wrong with UPC/DTT comboing with satellite for FTA channels (Irish-DTT/UK Satellite end)and offering the subscription channels through cable/pay DTT.

UPC should focus on channels that are subscription, not charging for FTA content and mudding the waters. Of course this would make things easier for switching to Sky as it would make it easier. That's the only snag.

I suspect that Sky will provide Irish FTA combo boxes so that encryption for Irish channels isn't needed if requested to by RTÉ.

I think UPC as part of Easy is effort to counteract Sky's dominance by extending reach beyond MMDS land. What could happen is you might have Easy decide to join Onevision's bid a dilute the cost. That way you have all players. However at the moment its up to Onevision and question would be if Easy would then say yes or nah. But would option is if Easy don't want to sink money in so much but have interest in it, then they could invite Onevision back in with stake.

However Eircom as part of the bid could be a problem which is why UPC might want them out. Mind you UPC could take a look at buying Eircom out!

To me what makes most sense is Easy and Onevision consortia joins but with Eircom not part of it. That way Setanta and TV3 can put in smaller stake, RTÉ, UPC and Arquiva bigger stake. Arquiva would have more experience than RTÉ I suppose with DTT so could be a good partner though taking more advisor role like BT. So could have RTÉ, UPC, TV3, Setanta. That'd spread the cost among all interested parties and should then be successfull.

Just some thoughts, could be wrong.

bk · 30-04-2009 12:45AM

scath wrote: »

I think there's nowt wrong with UPC/DTT comboing with satellite for FTA channels (Irish-DTT/UK Satellite end)and offering the subscription channels through cable/pay DTT.

Never happen, UPC would be afraid that it would make it too easy to switch to Sky or FTA sat, once you have a dish in place.

Plus the lack of dish is a major reason why many people get UPC, for aesthetic reasons or because they live in an apartment.

Plus UPC would probably end up in big trouble with the UK broadcasters.

However if they did win, they could bring out a DTT/MMDS combo box to free up space on MMDS for more subscription channels.

And you've just reminded me that we've actually have had a wireless digital broadcasting system for years in the form of MMDS and it is losing customers hand over fist to Sky, I can't see why DTT would do any better with significantly less channels.

scath wrote: »

I suspect that Sky will provide Irish FTA combo boxes so that encryption for Irish channels isn't needed if requested to by RTÉ.

Not a snowballs chance in hell, Sky won't do anything that might help a competitor.

watty · 30-04-2009 08:38AM

Sky & UPC have practically all the people that want payTV. About 70% of households. To compete as PayTV, DTT has to have SkySports & Setanta much cheaper (which it can't) and also have about 200 channels.

DTT could maybe have 40 channels. Those 40 channels cost much more than running 200 channels on Satellite or Cable.

Digital only MMDS has about 120 channel using MPEG2. If MMDS used MPEG4, it could have about 200 Channels + a handful of HD. But I think that will not happen as MMDS is likely to loose its spectrum around the time of ASO.

The encryption of Irish TV on satellite is needed because of the x20 bigger next door English speaking audience with satellite.

A FTA box to everyone in Ireland simply gives BBC/ITV/C4/Five and about 35 other watchable free channels. You can do that on a Sky box, with or without subscription, or on a DIY install Sat receiver + dish under 70 Euro.

The only thing Sky will ever supply is boxes with a slot for Sky payTV card. By law those have to receive FTA satellite too.

30-04-2009 09:29AM

watty wrote: »

€20M is peanuts

Not in todays market Watty when you have to pitch your business idea to banks.

emo wrote:

the 20million may not have been anything to do with it

Frankly thats nonsense.It should have been negotiatiable down to a notional €2 million or something achievable.
RTÉ aren't eejits either.They know that they benefit from the fall of the DTT project as they will pick up the pieces.

I suggest what they have spent on the Tx equipment to date is irrelevant as (a) they had to do that anyway and (b) they are state owned so it's not like they bought a fleet of mercs with our money,they bought tx equipment that they are obligated to buy.
It's not coming out of Cathal Goans pocket.
As far as the "board of directors" of RTE is concerned,it's all good.
They hang onto the market of those that currently won't bother with satelite.

Only in Ireland.

Mind you as I said,Boxer would have pulled out anyway in the current environment rather than enter the money pit.As practically everyone to a man here has observed,dtt in reland as a paying proposition is a non runner.
It was stifeled either by deliberate incompetance starting nearly a decade ago or just incompetance in my opinion.

No bank would bank roll it now.

RTE's €20 million request [they chose the figure] was simply proof to me,that there was no way in hell that they wanted even the faintest hope of it succeeding.

It's not as if they would be told to send the tx equipment back.They were safe in that knowledge.
Heck in 2012 if the economy improves,they'll probably get a licence fee increase solely to pay for DSO :rolleyes:

bk · 30-04-2009 10:41AM

Deleted User wrote: »

Mind you as I said,Boxer would have pulled out anyway in the current environment rather than enter the money pit.As practically everyone to a man here has observed,dtt in reland as a paying proposition is a non runner.
It was stifeled either by deliberate incompetance starting nearly a decade ago or just incompetance in my opinion.

Well surely then RTE were correct to look for €20 million up front, otherwise they would have gone and spent €70 million on the equipment for Boxer and according to you (I agree) Boxer would have walked away anyway.

Elmo · 30-04-2009 11:21AM

Deleted User wrote: »

They hang onto the market of those that currently won't bother with satelite.

Only in Ireland.

Boxer are a Semi-state body, they took the market due to DSO in Sweden. I.E. they held on to the market. I suppose it can only happen in Sweden too!

30-04-2009 01:59PM

bk wrote: »

Well surely then RTE were correct to look for €20 million up front, otherwise they would have gone and spent €70 million on the equipment for Boxer and according to you (I agree) Boxer would have walked away anyway.

Wait a minute-Are you telling me that RTE would have had to spend €70 million extra on tx equipment over and above what they have now bought [to do what they are obliged to do for themselves with DSO] and installed for to transmit for boxer?
Wheres that information ?

I thought they spent the €70 million already ie money gone supplier paid etc,licence payer the poorer ?

Thats the situation where I'm maintaining the €20 million deposit as opposed to say one or two mill was a písstake.

Elmo wrote: »

Boxer are a Semi-state body, they took the market due to DSO in Sweden. I.E. they held on to the market. I suppose it can only happen in Sweden too!

Do boxer own and operate the tx system in Sweden ?
I know in the UK,the tx system is largely private.

mrdtv · 30-04-2009 02:26PM

After all the debate and today's fascinating discussion of the declining prospects for the economy in Ireland by Bronwen Maddox in the London Times you have to ask yourself:

a) Can RTE and the Irish Government afford to fund DTT capital expenditure?

b) Who will pay for the operating costs?

c) Is the consumer proposition a real driver?

d) What will the delay factors be?

Don't censor this thread as its clear that this issue is not going away. Prediction: no decisions, delay, delay and delay as Ireland spirals back towards a 1930's style economy.

slegs · 30-04-2009 02:29PM

there is already a very active thread on this topic in the stickies

Elmo · 30-04-2009 02:31PM

Deleted User wrote: »

Do boxer own and operate the tx system in Sweden ?
I know in the UK,the tx system is largely private.

Boxer was in charge of the role out of DTT in sweden, with Senda in charge of the network. Both mergered later on. Boxer is 100% owned by Teracom. 30% was owned by a UK investment company 3i. Teracom bought them out.

Teracom is a terrestrial broadcast service company owned by the Swedish government. Teracom owns all Swedish broadcast antenna sites, and distributes all terrestrial radio and TV programmes, private as public service, analog as well as digital.

tretle · 30-04-2009 02:33PM

RTE aren't obliged to give away infrastructure they have built with tax payers money to any company planning to use it for commercial purposes. 20mill was less than what should have been asked for seeing as how much infrastructure boxer would have received in comparison to rte.
The only reason boxer pulled out was they realized their business plan was a failure because they most likely did the research of the Irish market after getting the application not before. The 20mill is nothing for a company like boxer, and although its alot for most people that shouldn't cloud your judgment here.

STB · 30-04-2009 02:35PM

As well as the thread in the stickies, Mr DTV, didnt you start a similar negative thread now labelled as MPEG2 vs MPEG4.

We hear you.

DTT Commercial Multiplexes (was OneVision, Boxer etc...)

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