With part-owner Austar struggling, Kiwi pubcaster affected

AUCKLAND — New Zealand pubcaster TVNZ has been dealt a blow to its digital television plans: It’s been dumped by telco partner TelstraSaturn.

The pair was set to launch two services in competition to pay rival Sky Television — TelstraSaturn had a pay satellite service in the pipeline and TVNZ a free-to-air digital service.

TelstraSaturn has a cable TV network in Wellington with just 21,000 subs, and recently rolled out cable in Christchurch. It would have had national reach for its satellite service.

Telstra’s decision was likely sparked by concerns that its Australian part-owner, Austar United, is struggling. TelstraSaturn is believed to be talking to Sky about running its pay TV service in exchange for providing Sky’s telephone, Internet and television services.

Shocked TVNZ bosses have vowed to press ahead with their own service.

TelstraSaturn is contracted to provide the infrastructure to run the service and says it will stand by its commitment.

But there are serious concerns about how the pubcaster will entice viewers to add another set-top box to their homes.

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