Inside the world of business

The big switch off still a  big question for RTÉ

After several years in gestation, there now appears to be a clear picture of how digital terrestrial television (DTT) will be delivered in Ireland. The shame is that it took so long and that it will fall some way short of what was promised at the outset.

RTÉ plans to offer nine free-to-air TV stations and 12 radio channels by the analogue switch off date of the end of December 2012. It will cost €70 million to put a digital transmission network in place to deliver these services via set-top boxes and satellite.

But a few years back, the former Broadcasting Commission of Ireland seduced us with the notion that DTT would deliver more than 50 digital stations at a cheaper cost than UPC or Sky currently provide.

Denis O’Brien’s Boxer consortium won a competitive tender process to provide the commercial services. Its plans were knocked off course by the recession and hard-balling by RTÉ’s transmission subsidiary on the price it should pay for access to its DTT network. OneVision, led by Eircom, was then offered the gig but also failed to agree a deal with RTÉ’s transmission arm. Third-placed Easy TV decided not to bother when offered the contract.

It now seems highly unlikely that any commercial DTT platform will be launched. UPC has substantially upped its game and Sky continues its relentless acqusition of customers in the Republic.

In a presentation to the Oireachtas communications committee yesterday, Broadcasting Authority of Ireland chair Bob Collins, formerly of the RTÉ parish, highlighted a flaw in the legislation that left it powerless to try and intervene in negotiations between the commercial DTT provider and RTÉ’s transmission subsidiary over the past year. It was hamstrung by the Government’s lack of foresight.

It’s a race against the clock for RTÉ, with the switch off only just over 29 months away. That’s not a lot of time to build and test a network, train 450 retailers and installers and educate the public about the EU-mandated switch off of the analogue signal.

Some Oireachtas members yesterday suggested that the whole process has been botched. The BAI and RTÉ wouldn’t agree but from this remove, they might be proved right.

Slim odds of taxing top brass

The IMF’s call for a tax on Irish banks and top bankers to fund future bail outs hits all the right populist notes. It also has the more productive attraction of aligning the interest of the banks, their top brass and taxpayers. What it does not have is much chance of seeing the light of day.

Even if the banks and their senior cadres were willing to submit to such a levy, implementing it would be difficult. But when you factor in the attitude of the Irish banks over the past 18 months and the Government’s inability to bring them to heel, it looks impossible.

If we have seen one thing over the last year and a half, it’s that despite the paucity of their hand the banks have fought dogged and very effective rearguard campaigns against measures aimed at making them pay any sort of price for the reckless lending and poor governance that had such a staring role in the economy’s collapse.

Against the express wish of the Government, both AIB and Bank of Ireland appointed insiders to replace chief executives who only stepped down after intense pressure. Both tried to find ways around the cap on salaries instigated by the Government.

Other, less bare-faced acts of defiance, confirm that the banks still place the public interest way down their list of priorities. The most recent example is the revelation that they cynically gamed the body set up by the tax payer to save them from annihilation – the National Asset Management Agency – when it came to transferring loans.

It would be a very pleasant surprise indeed if these two organisations accepted the pragmatic public policy arguments, never mind the moral case, for measures such as the IMF propose.

Grafton building up 

Given the nature of its main businesses – builders’ merchant and DIY – this week’s trading up date from Grafton could be described as reasonably upbeat. The group met the recession head on, implementing a cost-cutting package that will save €85 million a-year. In 2009 it reduced net debt by €112 million to €322 million and it ended the year with €300 million in cash.

However, it seems that there are still some fairly troubled waters ahead. Britain now accounts for more than half Grafton’s sales, and with no sign of recovery in the Irish building industry, and all of its growth.

Stockbrokers Davy pointed out this week that it may not last. Mortgage approvals and house sales in Britain are slowing, indicating that demand for builders’ merchants’ products could flatten out later in the year.

Analyst Flor O’Donoghue suggested that Grafton is in a good position to make hay from decent sales volumes and says that current trends bode well for its first-half results.

Nonetheless, it looks like some people at least believe that this has already been factored into its price. Its shares fell 2 per cent on Tuesday, the day it released its statement. They made marginal gains yesterday.

. Today

The Public Accounts Committee is set to examine documents relating to the banking crisis and housebuilder Abbey is due to issue annual results.

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