Future of DTT in doubt.

The cable industry's urgent embrace of digital technology and its aggressive deployment of services such as VOD and SVOD (subscription VOD) is causing some experts to question the global future of digital terrestrial television (DTT).

Overall, DTT has gotten off to a disappointing start worldwide, since its North American and European launches in November 1998. In Europe, satellite remains the primary mode of digital delivery, followed by cable and then terrestrial. Europe's five major TV territories -- the U.K., France, Germany, Italy and Spain -- ended 2000 with more than 15.7 million digital pay-TV homes combined. Of those countries, the U.K. leads the pack thanks to the efforts of Sky, which has aggressively promoted digital via set-top box giveaways. Their nearly seven million digital homes represent a 26-percent penetration and their year-to-year growth is an astonishing 129 percent. By comparison, at the end of 2001, Europe reportedly had less than 1.5 million DTT homes.

Spain's only DTT operator, Quiero TV is for sale after its investors (Auna, Planeta and Carlton TV) mustered an additional $260 million to keep it afloat. Since its inception in 2000, Quiero TV has signed some 130,000 subscribers.

In Tokyo, Asahi National Broadcasting president, Michisada Hirose has urged the government to adhere to its plan to launch terrestrial digital TV in 2003, despite a call by some in the industry to delay the new service due to poor economic conditions. "Any delay would sour our enthusiasm," Hirose told reporters, referring to recent speculation that the launch of broadcasts in the three largest markets -- Tokyo, Osaka and Nagoya -- could be delayed because of larger-than-expected public costs.

In Canada, on the other hand, cable domination will set the digital TV tone. Last year, Canada approved the launch of 21 specialty digital cable channels, and there will be 262 digital licenses available pending negotiations with cable and satellite companies. As of September, Canada will have approximately two million digital capable households out of a total 10 million TV households. Like the U.S., Canada has a high cable penetration at 80 percent.

There is concern that terrestrial digital could fail as a delivery system because of the established strength of cable and satellite services and the issue will only become more contentious as the number of digital channels continues to grow, but some governments are already stepping up to the terrestrial plate. In July 2001, France's broadcasting regulator, the Conseil Superieur de l'Audiovisuel, announced its promotion of terrestrial digital television with 22 national commercial channels up for grabs. There will be a total of 33 digital channels, eight of which have been designated as public-service channels, with three reserved for regional and local channels. Hoping to give terrestrial business a much-needed boost, France relaxed laws preventing any company from owning more than 49 percent of a national network. Under the new regulations, a company can own 100 percent of a network as long as it doesn't have an average annual audience share of greater than 2.5 percent. Companies cannot bid for channels if more than 20 percent of their capital is held outside the European Union.

Some experts believe DTT will succeed only where broadcasters develop specific revenue streams from DTT broadcasts and adapt their DTT business models to local market conditions. But even then, the proposition has been difficult, as seen with the financial difficulties of U.K.'s ITV Digital (formerly ONdigital), which has been forced to undergo restructuring in hopes of staying financially afloat. The overhaul will focus in part on deploying free-to-air set-top boxes. ITV is working with manufacturers, retailers and broadcasters to ensure the success of the new boxes, which it hopes to distribute to its 1.3 million subscribers.

The company must also reduce costs, and to that end Canton and Granada, who co-own the service, have indicated they will have no choice but to pull the plug on ITV Digital unless they are able to renegotiate more favorable financial terms with key content providers such as its $87 million contract with BSkyB, which supplies sports and movies. The moves come in the wake of the ad downturn which has been responsible for both Carlton and Granada suffering record losses. So far, the companies have poured $1.16 billion into the DTT business via ITV since it launched as ONdigital in 1998 and are $435 million from breaking even.

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Argentina: ATSC (U.S.-developed DTT standard) selected in 1998 but abandoned in 2000. The current picture is not clear. All options are being examined.

Australia: Hybrid DVB (European-developed DTT standard) with MHP (interactive standard). Transmissions starred in January 2001. All stations should broadcast digitally by 2004. Poor sales of digital receivers.

Austria: Adopted DVB. Transmissions scheduled for 2002 use MFN (multiple transmitting frequency network) and SFN (single transmitting frequency network).

Belgium: DVB. The country is largely cabled and there's no rush for DTT.

Brazil: Still evaluating DVB and ISDB (Japanese-developed DTT) systems. Decision will be announced this summer.

Canada: Probably ATSC adopted with simulcast. Starting DTT in 2003, switch-over when 85-90 percent of users are reached.

Chile: Will probably adopt ATSC.

China: The Guandong province committed to a trial of ATSC-HD (high definition) since February 2001. Other tests are under way in Beijing, Shanghai and Shenzhen with three systems. Possibly considering their own standard. Regular DTT transmissions will start in 2005 and be in full swing by 2010 with the switch-over scheduled for 2015.

Denmark: DVB adopted with four multiplexes. Testing started in 1999 in SFN.

Finland: Since 2000, DVB with 13 digital channels received by set-top-boxes by 39 percent of the population. Analog will stop in 2006.

France: DVB on air with testing on 10 channels since 1998. Its introduction is scheduled by the end of 2002. Analog will stop in 2008. TF1 feels that digital TV has to have an Internet format.

Germany: Trials in DVB with three multiplexes in SFN since 2001 complete transition by 2010.

Hong Kong: DVB selected for a 2003 starting date, but TVB and ATV will end up using whichever standard China adopts.

Hungary: DVB-MHP adopted. Test pilot in Budapest. Complete launch scheduled for 2004.

India: DVB. Doordarshan and BBC are preparing a launch in the main cities. Target coverage of 70 percent of the country by 2010.

Ireland: DVB adopted. Authorizations defined, target coverage of 99 percent of the population in 10 years.

Italy: DVB adopted. Tests on two channels by December 2002. Analog will stop in 2006.

Japan: ISDB adopted with a national launch scheduled for 2006 and 100 percent conversion by 2010.

Kazakhstan: DVB selected with three multiplexes. Analog will stop in 2005.

Korea: (South): Since October 2001 SBS has been transmitting 10 hours of DTT-HD standard ATSC (format 1080 lines/60 fields interlaced) per week, but MBC is continuing to broadcast in DVB.

Mexico: Possibly ATSC will be selected after tests (since 1997) with Televisa and TV Azteca broadcasting ATSC signals.

Netherlands: DVB with six multiplexes. Tests have found out that DTT interferes with cable TV reception.

Norway: DVB. Norkring has been trying transmissions with multiplex since May 2000. There are no plans for analog termination.

Portugal: DVB adopted. Transmissions with four multiplexes starting in 2002. Analog will stop in 2007.

Singapore: DVB selected.

South Africa: DVB adopted. Test transmissions since January 2000, a launch has not yet been scheduled.

Spain: DVB. The Quiero pay-TV service on 14 channels started in May 2000 with 3.4 multiplexes per channels. Approximately 130,000 subscribers, but with huge losses (about $260 million). Analog will stop by 2012.

Sweden: DVB. Transmitter service Teracom will increase the coverage to 98 percent of the population by June 2002.

Switzerland: Public broadcaster SRG-SSR has been testing DVB since March 2002.

Taiwan: ATSC approved by government, but TV industry prefers DVB. DTT simulcast should start in 2002.

Thailand: DVB tests began in December 2000.

U.K.: DVB. DTT since 1999 at ITV Approximately 1.3 million subscribers for 52 channels. Signals increased to an additional three million potential homes in the first quarter of 2001.

U.S.A.: ATSC standard in use for five years. Since its inception, 246 TV stations broadcast in digital (the remaining 1,354 by May 1, 2002 -- now postponed to 2004). At the end of 2001 there were 361,828 DTT receivers, including 97,157 D-TV sets sold by factories to retailers and 196,564 decoders (set-top-boxes) were sold by factories to retailers. D-TV sale s 1 percent of all TV sets annual sales and 0.35 percent of U.S. TV homes.