TVNZ coy on details after buying TelstraClear satellite capacity

By PETER GRIFFIN

Telstraclear has offloaded its unused satellite capacity to TVNZ, giving the state broadcaster scope to offer more channels via satellite in competition to Canwest and Sky TV.

TVNZ refused to disclose how much it paid for the transponder space on the Optus B1 satellite, which is understood to be capable of delivering up to eight TV channels. Industry sources indicate the price would have been a few million dollars at most.

TVNZ is also coy on what it may use the capacity for. Chief executive Ian Fraser said one possibility was to add to the three regional advertising breakout zones it provided through Sky's digital service, but the broadcaster was weighing up its options.

TVNZ already has its own capacity on the same satellite, which it uses to deliver TV1 and TV2 to a few thousand customers who have bought digital set-top boxes.

The purchase is seen by some in the industry as a land-grab for satellite capacity before TVNZ makes a real play in satellite TV services.

TelstraSaturn originally leased the capacity from TVNZ a few years ago when the telco had its own ambitions of entering the satellite pay TV market in partnership with TVNZ. Those plans evaporated and the capacity languished as Sky signed up more households to its own service.

TVNZ has the transponder space until June 2006, when the contract will be up for renewal. By that stage, there is likely to be a lot more satellite capacity available to New Zealand companies seeking to offer pay TV and high-speed internet services.

Sky chief executive John Fellet said last month he was not interested in TelstraClear's transponder space because Sky would be getting increased space on a new satellite in 2006 and compression technology would allow it to deliver more channels using the same capacity.

Thai operator Shin Satellite also hopes to have its IPSTAR satellite in orbit by March next year. The satellite will cover the whole of New Zealand, and local internet provider Iconz won Government funding to set up an internet service using Shin's satellite.