BBC to sell Technology unit

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The BBC has unveiled plans to sell its BBC Technology arm as part of an effort to save between £20 - £30 million (E42 million) a year. The BBC's board of Governors has backed the proposal, which will need government approval.

With 1,400 staff and annual turnover of £220 million (E308 million), BBC Technology sells broadcasting services to its state-funded parent and private-sector customers including satellite companies BSkyB and DirecTV, sports channel ESPN and mobile phone firm Hutchison 3G.

The BBC said in a statement that it expects Technology to attract bids from "major technology businesses with scale and expertise" and the sale to be done by late next year.

BBC Technology delivered £19 million (E2.6 million) in profit and price reductions to its parent last year. But an internal review found that to remain competitive within the BBC structure, there would have to be substantial job losses.

"This way the staff will continue working on BBC business but at the same time BBC Technology, which has been very successful at winning outside contracts, will get the capital injection it needs to expand further albeit in someone else's ownership," BBC Director-General Greg Dyke said in a statement.

Dyke said the government had asked the BBC in 2000 to raise one billion pounds (E1.4 billion) over seven years, suggesting an asset sale.

"We have no plans to sell any other of our commercial subsidiaries," Dyke added.