The Department of Communications is talking to TV stations about the trial, writes John Collins

The Irish have a huge appetite for digital television. When NTL/ Chorus and Sky announced their financial results recently, the figures revealed that, of the estimated 1,421,000 households with a television, more than 648,000 have a digital service delivered by cable or satellite.

Given that both operators (NTL and Chorus are now owned by UPC Broadband) invest heavily in ensuring they have premium sports and movie content, it's not surprising that they have been attracting subscribers.

Irish viewers have benefited from the increased competition that NTL and Sky face in Britain from Freeview, the free-to-air digital television service owned jointly by the BBC, BSkyB, National Grid Wireless, ITV and Channel 4.

It offers more than 30 television channels and 20 radio stations for a one-off payment of as little as £40 (€58.60) to purchase a digital set-top box. Ten million Freeview boxes had been sold, according to recent information.

With little fanfare, the Republic's plans for a free-to-air digital television service got back on track earlier this month. Minister for Communications Noel Dempsey announced he had awarded a number of contracts to put in place the infrastructure for a pilot of digital terrestrial television (DTT).

It is expected that the trial will begin in August of this year, but the details of what will be broadcast and who will be able to receive it have yet to be worked out. According to the Department, it plans to distribute 1,000 set-top boxes in the initial phase of the trial.

BT Communications will provide the technology for the distribution of the signals, NEC will provide the transmitter equipment and RTÉ's transmission subsidiary, RTÉ Transmission Network Ltd (RTÉ NL), will operate the transmitters and provide access to its broadcast high-sites.

William McAuliffe, business development manager with BT Ireland, says the plan is to have four multiplexes, or bundles of channels, with each multiplex capable of carrying about eight digital television channels.

It is understood that the Department is currently in negotiations with different television stations to get content for the trial. However, it is highly likely that, at a minimum, the Irish channels RTÉ 1, RTÉ 2, TV3, TG4 and Channel 6 will be available.

Jason Armitage, a senior analyst with research firm IDC, says the success of DTT in the Republic "will depend on what the platform looks like".

He points out that Sky and Freeview target different markets, with Sky offering high-value services, such as the recently launched High Definition TV service, and digital video recorders that record directly to the set-top box.

"They are targeting the top level of households, who are willing to spend for premium content like sports and movies," says Armitage.

Conor O'Shea, a media analyst with London stockbrokers Teather & Greenwood, says Freeview has raised the bar for television services and "is one of the reasons why Sky's share price has underperformed so much in the last three years".

The timetable for DTT in the Republic does not suggest Sky will come under similar pressure here for a number of years.

The pilot will run for two years and will be broadcast from two sites - Three Rock, Dublin and Clermont Carn, Co Louth. According to McAuliffe, these two sites will cover the majority of homes in counties Dublin, Meath and Louth.

Those lucky enough to sign up to the DTT trial can expect a much improved picture quality over the current analogue signals. Digital TV also offers the possibility of new services such as recording directly to the set-top box, an electronic programme guide, and interactive features such as live polls and additional text and video information.

The move to digital will also free up valuable radio spectrum because even though digital offers more channels, it uses much less radio spectrum.

This was clearly a driver for the introduction of Freeview, although the Irish spectrum is far less congested than that in Britain.

McAuliffe says that, while Sky and NTL have strong numbers for their digital services, there are still a lot of viewers on analogue who are either content with Irish terrestrial channels or avail of the spill-over of British signals in the east of the country and near the Border.

However, the UK government has announced its timetable for digital switchover which means that Irish viewers will no longer be able to receive signals from the UK. It plans to switch off the analogue signal in Wales in 2009 and in Northern Ireland in 2012.

The 2009 switch-off date in Wales could put the Government under pressure to speed up its digital television plans. Given the success of television deflector candidates in past general elections, it might suggest that the decision to have the trial on the eastern seaboard was not simply an operational decision.

It is a stated policy of the Department of Communications that it wants "to seek to retain access to a range of quality programming in analogue and digital form, on a universal and free-to-air basis".

When announcing the trial, Dempsey said: "The European Commission is proposing 2012 as a switch-off date [ for analogue] across Europe. We should set our sights on 2012 as a date for completing the transition to digital television."

This is not the first attempt to introduce a free-to-air digital service in the Republic.

The 2001 Broadcasting Act envisaged a quasi-commercial service where the four Irish channels would be free to air, but a commercial partner in the venture would have been able to charge for additional channels and services.

That process stalled because RTÉ could not find a partner willing to invest in RTÉ NL, as the dotcom implosion had just taken place. As a result, investors were loath to part with big sums for technology-related plays.

This time around, it is the Government that is taking the lead role rather than RTÉ, and it seems the political imperative is now there to deliver a service. McAuliffe believes there is certainly a market for a service that offers an enhanced package of channels but with no monthly charge.

"Once DTT is established, many viewers will be won over simply on the basis that it is free to air," says McAuliffe.