Filtronic’s £14m deal to keep the TVs working

Most mobile phone operators plan to launch their fourth-generation (4G) mobile networks later this year once the Government auctions 800 MHz and 2.6 GHz spectrum, or airwaves.

The 800 MHz band was freed up when analogue TV was switched off. But it sits next to the frequency used to broadcast digital TV, meaning problems for homes close to base stations.

Leeds-based Filtronic revealed deals worth more than £14m to supply filters to mitigate the impact of 4G on TVs in Europe.

“TVs will overload or they will experience interference so you won’t be able to watch TV,” said chief executive Alan Needle.

Filtronic worked with communications watchdog Ofcom to design filters to prevent interference.

Government estimates 2.3m households could be affected, although says only about 900,000 of these rely on digital TV, with the rest linked to broadband, cable or satellite TV.

Filtronic will supply UK households with around a million filters, which plug into aerials. It is outsourcing their manufacture to China. One of three suppliers in the UK, it won around 50 per cent of the UK opportunity.

“That’s quite a difficult delivery profile, going from nothing to a million. Every individual filter has got to be set up the same,” said Mr Needle. “We’ve won substantially more than I anticipated, but not as much as I hoped.”

Filtronic also revealed expectation-busting results for the six months to the end of November.

Its shares surged 15.7 per cent to close up 6.25p at 46p.

With mobile networks creaking under huge volumes of data, 4G aims to provide superfast wireless broadband for mobile users.

EE launched its own 4G network last year by reusing some of its 1800 MHz spectrum. Government has set aside £180m to tackle the TV interference problem. Mr Needle said there is also scope to supply filters for additional TVs in the home, as households only get one free filter. He estimates there could be as many as 3-4m filters needed in the UK.

It also spies opportunities abroad, as countries including France, Italy, Ireland, Poland and Spain roll out 4G. Filtronic is currently supplying samples to France and Italy.

The company posted a 56 per cent surge in revenues to £16.4m for the six months to the end of November, compared with £10.5m a year earlier. It returned to the black with an operating profit of £0.1m, compared with last year’s £1.2m first-half loss.

Growth was driven by its wireless arm, which more than doubled sales to £11.9m.

The division was boosted by strong demand in the US, where the 4G roll-out is more advanced than Europe. It supplies technology to firms such as Motorola, O2 and Alcatel Lucent to help them upgrade from 3G to 4G and cope with the proliferation of data-hungry devices, from tablet PCs to smartphones.

“The thing driving the wireless business and then broadband is this demand for data,” said Mr Needle. “People are watching video, streaming TV and all sorts of stuff.”

Wireless compensated for weakness in its broadband business, where sales slid to £4.5m from £5.3m. Filtronic is hopeful new products will reduce the loss-making impact of broadband.