Updated: Setanta collapse 'shows pay TV market failure'

BT has said that Setanta's collapse is a demonstration of "market failure" in British pay television.

Sean Williams, BT Retail's director of strategy, told Digital Spy this evening that Ofcom must react "swiftly" to Setanta's failure in its long-awaited review of the UK's pay television market.

"The failure of Setanta throws into stark relief the market failure in pay TV in the UK," said Williams. "It is also further evidence of the need for Ofcom to remedy the situation swiftly. Competition in pay TV in the UK is not working effectively. This gives rise to significant harm to consumers in the form of higher prices, restricted choice and diminished innovation."

BT, Setanta, Virgin Media and Top Up TV asked Ofcom to look into the UK's pay TV market in 2007, alleging that Sky was sufficiently dominant in the industry as to warrant a Competition Commission market reference. The results of the review are expected to be revealed in the near future.

Tonight, Sky chief operating officer Mike Darcey responded: "Setanta ran into difficulties because it tried to grow too fast and lost control of costs. It took on more than £1 billion of sports rights and its private equity backers refused to honour those commitments. It is sad that Setanta’s staff, many of them former Sky employees, must pay the consequences.

“BT and Virgin Media are guilty of cheap opportunism. They are hooked on regulation as a substitute for competition and have done nothing to support UK sport. They prefer to try to get our channels on the cheap while showing no interest in bidding for rights themselves. We’re proud of our track record in sport and will go on investing to bring our viewers the coverage they expect.

“There is nothing in Setanta’s failure that can properly be used as a pretext to hand an advantage to BT or Virgin Media. The UK remains a nation of sports fans and the opportunity is there for a well-run business to come in and be successful."