Sky poised to gain from TVNZ dismay

By KARYN SCHERER

Shares in pay-TV operator Sky TV shot up 24c yesterday as investors celebrated the Government's decision to put TVNZ's digital plans on hold.

Its share price hit 355c at the close of trading after a turbulent six months which has seen its price fall as low as 285c.

The Government's decision this week not to allow TVNZ to proceed with a joint venture with British-based cable giant NTL has raised investors' hopes that TVNZ will no longer offer a potential threat to Sky by offering its own pay-TV service.

It has also raised hopes within Sky that the Government could yet force TVNZ to strike a deal with its rival which would see the state-owned broadcaster deliver digital services through Sky's own satellite and set-top box.

Sky, which is now part of Rupert Murdoch's global media empire, has been arguing for more than a year that TVNZ is wasting taxpayers' money by upgrading its own equipment to offer a digital service.

Both TVNZ and CanWest, which operates TV3 and TV4, initially refused to join Sky's satellite service, saying they believed any such deal would only benefit their competitor.

TV3 finally agreed to join the service last year as part of its deal with Sky, which has seen it win the rights to free-to-air rugby and rugby league.

Sky chief executive Nate Smith appeared confident yesterday that the company's lobbying of politicians over the issue had worked.

"Hopefully, it clears one of the last few hurdles for TVNZ coming to the conclusion to go up on the satellite with us, and that would be important for me," he said.

However, any political resolution of the issue appears some time off, with a "high-powered officials committee" yet to be set up to consider the matter.

Broadcasting Minister Marian Hobbs was unable to be reached for comment yesterday, but a spokesman confirmed the committee would be asked to review what was happening internationally with digital technology and whether there was any need for "any associated regulatory framework."

The spokesman also confirmed the committee would be asked to consider whether TVNZ's transmission arm, BCL, should be set up as a stand-alone Crown-owned entity.

At present, TVNZ's rivals, including TV3, TV4 and The Radio Network, are forced to pay to use the BCL network to transmit their signals.

The asset is a major money-spinner for TVNZ and has frequently been tipped for privatisation. However, a scoping study commissioned by the National-led cabinet two years ago concluded a separate sale of the asset would damage the overall price tag that could be put on the broadcaster.

Meanwhile, the body set up by free-to-air broadcasters to lobby the Government over digital issues, the Television Broadcasters Council, has reacted cautiously to the Government review.

In a statement yesterday, the council said it welcomed the Government's plan to consult the industry over digital issues.

"We still have some detailed but important issues to resolve with the Government, but we are confident that considerable support exists for the introduction of digital television."

Appliance retailers and manufacturers are planning to set up their own ginger group later this week. A similar group already exists in Britain, the United States and Australia.