Channel S, the Scottish-based contender for Channel 5, has dropped out of the race for the licence just two weeks before the deadline for applications.
Despite careful measures taken by the ITC to ensure that all bidders are fully aware of the costs involved in starting up the Channel, Channel S has pulled out of the contest at the last minute blaming concern over finances.
The consortium now sees the task of establishing the channel as “an impossible one”.
Questions have been raised over the viability of the channel, given thatthe winner will be obliged to retune the nation’s video recorders. Estimates put the launch costs for the venture at around £200m, of which £50m will go towards retuning the three million videos which will suffer interference from the channel.
The remaining contenders for Channel 5 are Five TV (including Thames TV, Sony and Global Communications) and the Entertainment Channel (including TV-am, the Daily Telegraph Group and Time Warner). The deadline for applications is 7 July.
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