Optus today announced it is further streamlining the Consumer and Multimedia (CMM) division by selling broadcasting assets in its National Digital Media Centre (NDMC) to Foxtel and outsourcing the services provided by its Video Operations Centre (VOC) to Omnilab.

Martin Dalgleish, Managing Director for CMM, said the arrangements reinforce CMM's strategic direction away from non-core activities.

"The arrangements will reduce CMM's operating expenses and release capital which is presently tied up in these non-core facilities. Rationalising our sites and services will position us to make a sound contribution to Optus' bottom line.

"It is logical and cost effective for us to concentrate on our core business - providing an integrated bundle of telephony, internet and television services to customers on our broadband network - and outsource production and control functions to specialist providers," Mr Dalgleish said.

The arrangements have been designed to comply with the undertakings Optus provided to the ACCC in November 2002 as part of the Optus-Foxtel content deal.

Foxtel will purchase Optus' interactive digital television related assets housed at the NDMC, assume the lease on the property and provide Optus with analogue television play-out services (including monitoring, quality control and service restoration functions).

The NDMC was designed to develop iTV applications and technology as well as support the aggregation, play-out and monitoring of digital and analogue subscription TV services.

"This agreement also gives Optus the option to provide customers with digital subscription TV services based on the Foxtel service. And we retain the option to invest in our own iTV service and platform," Mr Dalgleish said.

Optus will outsource the production of MTV, Odyssey and Ovation to the production company Omnilab. Optus will retain the creative rights for the MTV and Ovation channels and maintain editorial and programing control. Optus will also sell its television assets held at the VOC.

The new Optus-Foxtel deal coincides with the conclusion of the 12-month Optus iTV commercial trial. Mr Dalgleish said he was pleased with the trial outcomes.

"The trial indicated that while the technology is robust, the iTV business model requires significant capital investment and significantly higher customer spend to generate an acceptable return. The time is not right for Optus to offer iTV," Mr Dalgleish said.

For more information:
Melissa Favero
Optus Corporate Affairs
Tel: (02) 9342 5030