Free-to-view TV ‘converter’ let out of the box

Set top box manufacturer Pace is poised to launch the UK’s first mass-market ‘free-to-view’ digital television product.

The box will act as a converter for people who want to watch the growing number of non-subscriber digital channels without buying a new integrated TV set or signing up for television companies such as Sky.

The Yorkshire-based electronics company hopes to begin selling the new product in high street retail outlets during the second quarter of the year. Pace said research it has carried out with several broadcasters, including the BBC, suggests a ‘significant market’ for a digital box costing a maximum of £130.

There are already about 30 digital channels available free, including ITV2 and a range of channels from the BBC such as Choice, Knowledge and News 24. Last year the BBC announced a major expansion of its digital network, including the launch of BBC3 and BBC4 and several new children’s channels.

To receive free channels viewers currently have to spend upwards of £400 for an integrated digital set, or pay a monthly subscription to a provider.

Andy Trott, Pace’s director of networks and connected devices, claimed the 70 per cent of the UK population without access to digital will become increasingly interested as the number of free channels grows. ‘It could easily become a 100 million device market by the end of the decade.’

The government is expected to step up its efforts to entice people to digital ahead of a planned switch-off of the analogue signal around 2007.

Pace believes even viewers prepared to buy a new digital TV will be reluctant to ditch their existing set. ‘They will be moved to another room where people will still be interested in watching digital channels,’ said Trott.

The new box was one of several initiatives outlined by Pace at its interim results announcement earlier this week.

The company is testing IPTV systems which deliver internet-based TV services via telephone lines. It is poised to begin trials of its Gateway Expander home networking product, which connects devices such as PCs to broadband digital cable via the set top box without the need for wires.

Pace hopes such developments will help it compensate for the inevitable flattening of the market for paid-for digital packages, although it claimed this was happening ‘only gradually’ in the UK.

A warning by Pace that turnover for the full year would be flat because of downwardprice pressure took the gloss off a 21 per cent rise in pre-tax profits to £22m.The company insisted it would continue to invest heavily in its engineering and R&D capabilities.