BBC rids itself of broadcast network

The BBC lost the second B in its name yesterday when it sold its transmitter network to a private company for pounds 244m and will no longer broadcast the programmes it makes.

The sale to Castle Transmission Services, a consortium headed by Houston- based Castle, means that in future the British Broadcasting Corporation will buy in transmission services. Another consequence of the sale, which took effect yesterday, is that the entire UK transmitter network will be in foreign hands, following the sale last year of the ITV system to the US-owned NTL.

Both the BBC and the Department of National Heritage expressed delight at the sale. The BBC is to use the proceeds to invest in providing its new digital television systems and said it would be buying in transmission services at a lower cost than it was paying previously.

BBC Deputy Director-General Bob Phillis said: "We are delighted that in Castle we have found a purchaser who best satisfied those criteria as well as offering excellent financial terms." The price was pounds 30-pounds 50m more than forecast.

A BBC spokesman said the corporation would not change name: "We may have sold our transmission network but we still consider ourselves as a broadcaster. Anyway, we are called the BBC in our charter."

Virginia Bottomley, the national heritage secretary, said: "The BBC will retain the net proceeds of the sale to invest in digital production technology and related work. It is also good news for licence-fee payers. The BBC has secured a good return on past investment." All 500 staff have been transferred to the new outfit but may well face job losses.

Derek Foster, the shadow Whitehall minister, said: "This is just the latest in a long line of privatisations which are being rushed through to beat the election deadline. This unseemly haste puts into doubt whether the taxpayer is getting the best deal and there are also bound to be doubts over the job security of the staff."

Partners include Telediffusion de France, part of the France Telecom Group, and investment firms Berkshire Partners and Candover Investments. The assets in the sale include the land and transmitters on nearly 740 sites across Britain. Under the terms of the deal, 500 BBC staff will transfer to the new company.

BBC transmission began operations 75 years ago from a single transmitting station on the roof of Selfridge's department store in central London.

The Castle consortium has been granted a 10-year contract for transmission of BBC1 and BBC2 analogue television services and the BBC's five national radio stations. The trans- mission service for digital television, when it starts, will be put out to tender.