BT ready to rumble with TV's big boys

Chairman Sir Christopher Bland sees a future of quality video pictures, says Raymond Snoddy

BT, the UK's leading telecommunications operator, may be only a year away from a move that will see it sitting alongside the big media players such as the BBC, ITV and Sky. The company is committed to spending up to £3bn a year - more than the entire BBC licence fee - to create over the next five years a high-capacity network that can deliver quality video pictures to the entire UK population.

"We are doing tests and we are putting the pieces together and we are going to the various component suppliers," says Sir Christopher Bland, the BT chairman who is also a former chairman of both the BBC and London Weekend Television.

BT has opened talks with all the main television groups about what sort of partnerships would work and what sort of television services BT could offer.

There has been growing speculation that BT could launch its own television set-top box and offer video-on-demand services, for example movies, throughout the UK in competition with satellite operator BSkyB. An independent company, Video Networks, is already offering such a video-on-demand service down telephone lines in parts of London but its plans do not extend beyond the main urban areas.

"I think it is highly unlikely that we will take on Sky. They are partners of ours and we have a good relationship with them. What might be possible is a combination of a box and server that would enable us to show last week's BBC and ITV programmes - the ones you missed," says Sir Christopher.

Apart from his extensive background in television, the main reason Sir Christopher is interested in playing a role in the media is the rapid growth in broadband communications in the UK. More than five million homes now have a broadband connection at speeds of up to one or two megabits and the rate of take-up continues to accelerate.

Last week, BT unveiled its results for the second quarter of 2004, which showed that rising demand for broadband has helped the company to achieve its fastest underlying revenues growth in nearly three years. In October, broadband reached a milestone when for the first time more than 100,000 new customers were signed up in a single week, with BT winning about one third of the market. By the middle of next year BT should be able to offer basic broadband of up to two megabits to virtually the entire country.

"Two megabits is not enough for broadcast-quality anything. We would say four megabits is the beginning. Until you have four you do not have a video enabled and even at four, sport disintegrates pretty regularly," says Sir Christopher.

The process of building the new broadcast-quality network begins next year and is due to be complete by 2009. Along the way more and more of the country should be able to receive video services from BT, quite apart from rapid downloading of data and services ranging from medical prescriptions online to increasingly sophisticated forms of e-government.

"The world is converging but it is converging slowly and not overnight," the BT chairman insists. "Do I think that broadcast television, whether satellite or off-aerial, will be replaced by broadband networks? The answer is no. It won't happen in 10 years but maybe in 30."

In the meantime, multiple delivery systems and devices will continue to compete against each other.

Sir Christopher's in-depth knowledge of the slowly converging world of broadcasting and telecommunications began with a chain of accidents stemming from a local government election in Lewisham in 1967. A Conservative, he stood for the then Greater London Council only because he was assured it was a safe Labour seat.

"I was one of the few successful candidates who asked for a re-count," he notes. Through the GLC he met Christopher Chataway who appointed him to the Independent Television Commission from where he moved to LWT. If Granada hadn't tipped him out of LWT in a bitterly fought hostile takeover he might now be running ITV and would have missed out on the opportunity to chair both the BBC and BT.

"It's an ill wind that blows nobody any good," says the Ulsterman - a former soldier and Olympic fencer who is also the current chairman of the Royal Shakespeare Company.

"LWT should have emerged at the top of the pile," he adds. "The takeover terms undervalued LWT but there is no point grumbling about the City. All those involved have gone on to pastures old and new."

Sir Christopher welcomes the ITV merger that brought Granada and Carlton together and argues that further deregulation is needed. Light-touch regulation for ITV, he believes, should mean no programme quotas and little prescription of what must be shown. He even questions whether it is necessary to prescribe news.

Even while chairman of the BBC Sir Christopher might never have become chairman of BT. When offered the job he effectively asked Greg Dyke's "permission" to go. "I wouldn't have gone if he'd said you brought me in here and now you're shoving off. I would have said OK. He had been there long enough to feel confident that he could survive without me," he says.

If he were still in charge at the BBC Sir Christopher would have been determined to see an expansion of the independent programme production sector and believes that the independent programme quota should now rise from its current 25 per cent to 40 per cent. But Sir Christopher believes the licence fee is secure, because no better scheme has been devised, and says that the idea of sharing the licence fee with other broadcasters "is for the birds".

Sir Christopher has one big regret from his days at the BBC, even though it is something that may have been impossible to achieve.

"I wish that I had persuaded John Birt to be more like Greg Dyke and Greg Dyke to be more like John Birt," he says.

At the age of 66, Sir Christopher Bland is already looking like one of the great survivors of the communications business. The plan is to spend another three and a half years as the chairman of BT before retiring - long enough to see his dream of a new, national 21st-century network that is capable of handling high-quality video nearing completion.