The sole bidder for a licence to operate a national digital television network has withdrawn its application more than year after the Government initiated the competition for the franchise.
The decision by a consortium known as It'sTV to pull out of the licensing contest, places the future of the Government's proposed terrestrial TV network in doubt.
It will also delay the process to sell RTÉ's network, which is estimated to be worth somewhere between €20 million and €60 million.
The process to sell a majority stake in RTÉ's broadcast transmission network began last October when several international firms submitted initial bids to RTE's financial advisers, Rothschilds.
But the cash-strapped national broadcaster has been unable to sell the mast network until the future of the proposed national digital terrestrial television was decided. It is understood the Government has also argued against a decision to sell off the State asset at the bottom of the technology market.
The Minister for Communications, Mr Dermot Ahern, must sanction any sale of RTÉ's network, and it is believed he will not do so until a new strategy for digital television is formulated.
A Department of Communications spokesman said yesterday that Mr Ahern would outline a new strategy for digital television within weeks. He also confirmed It'sTV had withdrawn its application to operate the system.
It'sTV could not be contacted yesterday by The Irish Times.
The consortium was led by former RTÉ executive, Mr Peter Branagan, and had raised seed funding from Dublin-based venture capital firm, Delta Partners.
The Department of Arts, Heritage, Gaeltacht and the Islands, which ran the competition for the last government, initially refused to issue an operating licence to It'sTV because it could not secure a main financial backer. Subsequently, a problem arose over the terms of the draft licence published by the telecoms regulator.
It'sTV had wanted to offer a bundled package of digital television, high-speed internet and telephony using RTÉ's network.
But the draft licence conditions would have curtailed the firm's ability to offer a viable broadband service, undermining its quest to rise more funding from backers.
However, most telecoms analysts believe the perilous state of the global technology industry over the past year has hamstrung the process to set up a national television network to compete against established cable and satellite TV providers NTL, Chorus and Sky.
