Electronics giant Pace Microtechnology has secured a lucrative contract to supply set-top boxes to an Australian television company.

Media firm Foxtel, Australia's leading subscription television provider, has chosen set top boxes manufactured by Saltaire-based Pace to launch its new digital cable service next year.

The new digital boxes will be supplied by Foxtel to all customers signing up to the pay TV station's digital services.

The breakthrough into the Australian market was today hailed as a major boost to Pace which last month announced a lucrative new deal to supply set top boxes to Sky.

Sky owner Rupert Murdoch also has a 25 per cent stake in Foxtel.

Although there are more than 14 million television sets in Australia, just 50,000 are attached to digital set top boxes so far.

Foxtel chief executive officer Kim Williams said: "Pace's ability to develop set-top boxes for both platforms and long-standing reputation for engineering excellence will be a crucial element of the launch and roll out of our digital platform."

And Pace chief executive John Dyson said he was delighted to secure the contract.

"Pace is very pleased to supply Foxtel with a platform that enables the best possible range of viewer services at the best possible price," he said.

"Pace is continuously improving the functionality of its set-top boxes and has created an innovative platform on

which Foxtel can launch its digital services with confidence."

Pace had previously focused on marketing its set top boxes in the UK, which has been leading the way in the digital television revolution. A spokesman for the firm said: "This is a huge opportunity for us to break into a new market. The UK is leading the rest of the world in digital TV but this deal demonstrates that other countries are looking to follow suit."

Despite reporting a pre-tax loss of £15.9 million in January, Pace said it was expecting demand for set top boxes to continue to grow.

The spokesman said Pace was benefiting from the success of the BBC's Freeview project which allows terrestrial customers to convert to digital TV at a low price.

Although Pace has lost its exclusive contact with Sky to provide the firm with its advanced Sky Plus boxes, it now receives a cut of the subscription fee which the broadcaster charges its customers.