Sunday, November 15, 1998 Published at 19:21 GMT
Business: The Company File
First shots in Digital TV war
ONdigital celebrates with fireworks at the Crystal Palace transmitter
The world's first terrestrial digital network has been launched amid criticism that customers still face delays.
The 30-channel service - a joint venture between media giants Granada and Carlton Communications - can be received through an ordinary television aerial and does not need a satellite dish.
This makes it potentially more attractive than satellite competitors like Sky Digital, launched in October.
The company admits it is having difficulty keeping pace with thousands inquiries.
And it concedes that only 70% of UK households will be able to receive the service at launch, although Sky Digital puts the figure closer to 43%.
ONdigital predicts it will have 59 new transmitters installed by next year, giving it 90% coverage in the UK.
Chief Executive Stephen Grabiner added: "Digital television made simple, through an aerial, is here."
But Sky's Chief Executive Mark Booth mocked ONdigital's "plug and play" claim - saying it was more a case of "plug and pray".
"When people look at how many channels they actually get, versus the impression that has been made to the consumer, they will be surprised."
The technology behind digital television offers viewers superior quality sound and pictures, and will eventually be able to carry Internet and home shopping and banking services.
But viewers must invest in new equipment - either a new digital television priced at upwards of £900 or a set-top box adapter at £200.
Early demand for set-top boxes has been massive and the new digital services are concerned that supplies will run out in the pre-Christmas sales rush.
Manufacturer Philips has stepped up production to 2,500 boxes a day and will shortly be joined on the market by Pace boxes.
ONdigital hopes its appeal will reach beyond the early rush and tap into the 75% of homeowners who have expressed no interest in pay TV services.
The Consumer Association has warned viewers not to rush into going digital and to wait until prices settle down.
Consumers may benefit from a price war. The across-the-board cost of a basic service at present is fractionally under £10 per month.
The UK is seen as a trailblazer for the digital revolution, and is likely to become the first country in Europe to introduce satellite, digital terrestrial and cable services, with cable access for digital due next year.
Henderson Crosthwaite analyst Mathew Horsman expects ONdigital to have 2.7 million subscribers by 2005, compared to 3.8 million for Sky Digital and 4.7 million for digital cable.
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