ONdigital, the pay-television operator, yesterday announced that it would meet its target of 1m subscribers by the end of the year, boosted by its acquisition of rights to English league football and a new television internet service.
It said that 774,000 households are now signed up to the digital terrestrial TV network, up 15% in the last quarter. But analysts said there were signs of that the rate of growth is beginning to slow.
ONdigital, owned by the ITV broadcasters Carlton and Granada, said it would start a TV internet service in the autumn, and a new premium sports channel next year. The chief executive, Stuart Prebble, said sports rights were driving up its subscriber base, and it would seek to acquire more.
The broadcaster said it had experienced a three-fold increase in subscribers in the past year and was on course to reach 2m by the end of 2002. It would break even at 1m, and had the potential to make a £250m profit when the number of subscribers reached 2m, Mr Prebble said.
However, ONdigital admitted that of its 774,000 subscribers 34,000 are yet to switch on their smartcards. It is understood that a further 15,000 have received free or discounted integrated digital television sets.
BSkyB, ONdigital's satellite rival, has notched up 3.4m digital subscribers, half of whom did not have digital television before.
Mr Prebble predicted that its new internet service, ONnet, which is available with a second set-top box, would help widen internet access across Britain. He said it removed the last barrier to internet access - the cost of a personal computer.
When the service begins, subscribers will receive a free or heavily discounted "net-top box". ONdigital said it had already signed up partners for a planned portal, including Abbey National and its new internet bank Cahoot, and was negotiating with nearly 100 more.
The "look" of ONdigital's net portal is being developed by BBC Resources, and the e-business consultancy Rubus is doing the technical development work. Mr Prebble said viewers would be able to "click through" from television programmes or advertisements to supporting websites - this facility, cross-linking, was a "world first".
"The introduction of internet and interactive services provides us with significant opportunities to increase average subscriber revenue levels. And every interactive digital television that is sold, even to non-subscribers, represents a potential customer for ONdigital's pay-per-view and interactive services," Mr Prebble said.
ONdigital's premium sports channel will launch next year based on its rights to show English league, Worthington cup and Uefa champions league football, and the ATP men's tennis masters series. ONdigital now claims it shows more football than any other platform.
Mr Prebble said he did not expect the upheavals in the ITV system to affect ONdigital's business plan. Carlton and United intend to merge, subject to the approval of the Department of Trade and Industry, while Granada has signalled its intention to bid for either Carlton or United if their merger plans fail.
Analysts believe that if ONdigital were wholly owned by a combined Granada and Carlton its stock market flotation would be hastened.
Mr Prebble would only say yesterday that he expected flotation "sooner rather than later".
