Talks underway for Orange to buy broadband TV technology from Project Kangaroo

A potential buyer for the technology that was behind Project Kangaroo, which is a joint venture between the BBC, ITV and Channel 4 to provide broadband TV, has emerged in the form of Orange.

It is understood that around £20 million has been invested in the development of technology that will be behind this proposed video-on-demand service from Project Kangaroo, which will now fetch closer to a few million pounds to the winning bidder.

Due to previous concerns that the technology would dominate the emerging broadband TV market in the UK a decision was made by the Competition Commission back in February, which has led to the joint venture partners looking to sell the Project Kangaroo assets, mainly the technology behind its video-on-demand service.

There are two serious contenders for the purchase of part of Project Kangaroo assets, one of which is Orange and the other is a technology company, it is thought.

A spokesman for France Telecom, Orange’s parent company said “We are examining this company and we see of course that it could be interesting. Nothing has been decided but we can confirm we are examining it.”

The bolstering of the Orange TV broadband all over Europe is where the mobile service provider would make use of this technology.

Orange TV in France currently has over a million subscribers and the aim by France Telecom is to build up its own service with the aid of Project Kangaroo VoD technology. The announcement of a set-top box service that would also include access to web-based TV for its broadband customers was made by the French telecoms company last summer.

The spokesman for France Telecom said “On Orange TV we are very cautious about what we are saying in the UK but it [Kangaroo] could help us in developing more quickly Orange TV projects in France.”

The feasibility of Orange TV being launched in the UK has been looked into by Orange and it has advised both its trial customer group and its suppliers that due to a mixture of factor including the global financial situation it will not currently be considering a launch of the service.

An Orange UK spokesman said “Due to the current economic climate, the present position of the UK TV market, and the evolving regulatory environment, we have decided to put our plans for a full launch of a digital TV service on hold. Our vision and ambition for Orange to become a major player in the home entertainment market remains and we will regularly be reviewing our position in order to fulfill on that ambition.”

It was revealed by ITV that Project Kangaroo would cost £12 million once completed when it published its full-year results for 2008 last month.