Southcoast Television has applied for a licence to set up a digital television service for Munster that would compete against BSkyB and cable companies. Jamie Smyth, Technology Reporter, reports.
Firms are also being invited by the Commission for Communications Regulation (ComReg) to apply for new licences to operate digital television services in other regions, including Dublin.
Digital television offers consumers better picture and sound quality and a much wider selection of television channels. It can be supplied by satellite, cable and a range of wireless technologies.
The new licensing process will attempt to boost competition in the television distribution market, which is currently dominated by the satellite firm BSkyB and cable firms Chorus and NTL.
It could also signal the death knell for Government plans to launch a national digital television service to compete directly with BSkyB and the cable firms.
This plan, first outlined in the late 1990s, has so far failed to produce a viable bidder for a nationwide digital television network. A lengthy review by the Department of Communications of the viability of the project has yet to yield a result.
ComReg's decision to licence local digital providers, if successful, would probably prevent the establishment of a national digital television network.
Successful licensees will be entitled to launch "digital terrestrial television services", which beam digital signals to homes from a network of radio transmitters. An application process for the licences was outlined yesterday by ComReg, which has already received an application for a Munster licence from Southcoast Television.
Southcoast is a community television company that was originally set up as a television deflector firm in Co Cork in 1985. It has 10,000 multi-channel television subscribers in the Cork region and plans to expand throughout Munster.
Mr John Hurley, chairman of Southcoast, told The Irish Times yesterday that the firm proposed to offer customers 60 television channels on a new digital system.
He said that if the firm's application for a licence was successful, the firm would attempt to raise between €6-8 million to finance the rollout of a new digital terrestrial television network.
However, some financial analysts believe the huge cost of setting up digital TV networks and supplying set-top boxes to customers could dampen demand for the regional licences.
Mr Hurley said Southcoast planned to offer digital television at prices about 20 per cent cheaper than existing companies.
The decision by ComReg to licence local digital television service providers will prove particularly controversial with the British satellite company BSkyB.
BSkyB, which has more than 300,000 Irish customers, previously warned ComReg that the digital television signals that would be used by local firms to beam signals to households might interfere with its broadcasts.