Shares in UTV jumped by 10 per cent in London yesterday after Britain's Independent Television Commission (ITC) published the terms which it proposes to offer the company if it decides to apply for the renewal of its licence.

UTV must inform the ITC by December 11th whether or not it plans to apply to renew the Channel Three licence for Northern Ireland for a 10-year period from January 1st, 1999. The company is currently evaluating its options which also include deferring an application until next year or the latter part of 2000.

It will publish its decision by the deadline, a UTV spokesman said, although he declined to comment on the company's initial response to the terms. However, the terms were favourably received in the stock market where the share price jumped by 19 pence to close at 201.5p on the London Stock Exchange.

The financial terms being offered in return for the licence are five per cent of qualifying revenue - which is made up of advertising revenue plus sponsorship income - and an annual cash payment of £0.55 million. Qualifying revenue is defined as analogue revenue only and this should decline over the 10-year period as digital viewership increases.

However, the average cost of the licence over the 10-year period would still represent an increase on the current index-linked cash payment which is £1.2 million at present. Under the new financial terms, UTV would be likely to pay around £2.2 million in the first year of the licence.