Satellite broadcaster BSkyB presented plans to introduce a free television service in Britain yesterday and said it was reviewing whether to launch it in Ireland.
The new "freesat" service will offer more than 200 digital television channels to British consumers this year for free with no requirement to subscribe to Sky.
It will be available to any consumer in Britain and Northern Ireland who buys a satellite dish and a set-top box at a cost of up to €350.
But initially the new service will not be available to Irish consumers as the broadcasters RTÉ, TV3 and TG4, would have to strike a carriage deal with Sky.
Under a five-year deal struck in April 2002, RTÉ, TV3 and TG4 agreed to be carried on Sky's subscription-based satellite platform in an effort to expand their reach. However, if RTÉ and the other Irish broadcasters want their stations to be made available on the new "freesat" service they would have to pay carriage fees to Sky.
In Britain ITV pays tens of millions of pounds to BSkyB for carriage on its platform and the Irish broadcasters could face a bill of several million euro for carriage.
An RTÉ spokeswoman confirmed that Sky and RTÉ have already held informal discussions on the "freesat" matter.
Mr Mark Deering, managing director of Sky Ireland, said the firm was reviewing whether it would introduce its service in Ireland given certain commercial conditions and consumer demand.
But it is believed that BSkyB is keen to extend the service to Ireland if it can strike the right deals with national broadcasters. Sky has aggressively targeted the Irish market in recent years and has more than 300,000 subscribers in the Republic. It has also launched an Irish news service to widen its appeal and the "freesat" service could help it grow further here.
The extension of Sky's "freesat" service to the Republic could further undermine the Government's plans for a national digital terrestrial service. Since 1997 the Government has been planning to establish a free national digital television service in the Republic, but has so far failed to get the project off the ground.
A spokesman for the Department of Communications said yesterday a trial service should be established later this year.
However, the extension of Sky's "freesat" service to Ireland could further undermine the commercial basis for this type of digital service in the Republic. It is thought that the Government's planned service may have to charge consumers for access to the British television channels whereas on Sky they will be free.
