A group of former RTE executives has bid to operate the Republic's proposed digital terrestrial television service.

It remains unclear whether any other parties submitted bids by yesterday's noon deadline to challenge the bid by It'sTV, which is headed by the former RTE executive, Mr Peter Brannigan. The It'sTV bid is backed by Dublin-based venture capital group, Delta Partners.

The Department of Arts, Heritage, Gaeltacht and the Islands would only say last night that the evaluation process had begun. The Minister, Ms de Valera, said she expected the process to be concluded by mid-October and she hoped digital television would become a reality by 2002.

A separate process - the sale by RTE of a majority stake in its transmission system - should be concluded by November, she added.b The new transmission company will broadcast existing analogue television and radio signals, some local radio services and digital television services.

The successful bidder for the digital licence would operate at least 30 channels that would be broadcast on this transmission network.

Neither Mr Brannigan nor Delta Partners was available for comment last night on the details of their bid. Mr Brannigan has been a major driver of the concept of digital terrestrial television over the past few years. He left RTE earlier this year to work on a bid for the digital licence.

Digital terrestrial television would offer 98 per cent of the population access to better picture and sound quality television. Almost 20 per cent of the transmission capacity of the new company would be used to supply interactive services such as home shopping and home banking as well as access to the internet.

This week the Department of Arts, Heritage, Gaeltacht and the Islands revealed that the process of awarding the licence to operate digital terrestrial television would be a hybrid of beauty contest and auction.

Some 80 per cent of the marks will be awarded on the ability of each bid to promote the platform and provide a stable business plan. Twenty per cent of the marks will depend on the financial size of the bid.

Some experts believe the winning company that wins the licence to operate the digital service will have a tough time making a return on its investment. It would cost more than €100 million to establish and promote the business due to the high costs of subsidising set-top boxes and purchasing digital equipment.

In addition, the digital terrestrial television platform will face stiff competition from cable firms, Chorus and NTL, and the Sky satellite platform.

Establishing the digital terrestrial television platform was held up for almost a year when Ms de Valera ordered amendments to the Broadcasting Bill.

Since then the capital markets have become difficult for technology projects, and the equivalent platform in the UK, ITV digital, has come under pressure.

ITV Digital's shareholders, Carlton and Granada, are reported to be looking for a partner to support the loss-making service.