New Zealand telco and pay-TV operator TelstraSaturn is to partner with public broadcaster Television New Zealand (TVNZ) on the delivery of satellite-based digital television to local audiences.

Few details are available on the nature of the venture's programming although it will probably include acquired and commissioned material and be on offer from mid-2001.

The free and subscription services will present serious competition for the existing Sky service, owned by News Corp and local media company Independent Newspapers. Sky has the competitive advantage of owning rugby and cricket rights, although there is still considerable resentment about these sports being removed from free-to-air television due to a lack of anti-siphoning rules.

With the help of a $356m (NZ$900m) bank facility, TelstraSaturn is already building New Zealand's first national broadband network. It is also learning much about interactive television, which will be part of the mix, from Austar United Communications, which owns the company in a joint venture with fellow Australian company Telstra Corporation.