The three - Sony Corp, Matsushita Electric Industrial Co Ltd and Toshiba Corp - produce half of all TV sets sold in Japan. They joined hands last month to cooperate on a standard format for digital TV set-top boxes.

The firms plan to ask other companies to join the alliance, whose first step will be to set up a task force to develop security and other technology for interactive services using next-generation multi-channel digital satellite broadcasting.

News of the tie-up gave a lift to the three firms' shares - core Japanese high-tech issues.

which also drew strength from gains in US technology stocks in the Nasdaq composite index last Friday.

Sony ended up 4.44 per cent at 10,340 yen, Matsushita rose 2.36 per cent to 2,815 yen and Toshiba gained 2.92 per cent to trade at 1,232.

Growing industry
Expected demand for interactive TV services could translate into a potential growth area for Japan's budding digital satellite broadcasting industry.All five commercial broadcasting firms including NTV plan to launch digital satellite-TV services in December using a broadcast satellite.

Nippon Television Network Corp (NTV), one of Japan's five commercial broadcasters, said in May that it hopes to organise a consortium of companies to move into the communications satellite industry.

That move reflects intensifying competition in the Japanese TV market with the growth of SkyPerfecTV, which became Japan's only commercial satellite TV broadcaster after buying DirecTV Japan from a group led by US-based Hughes Electronics Corp.

SkyPerfecTV - partly owned by NTV's arch rival FujiTelevision Network, Sony and Hughes - has gained more than two million subscribers by beaming around 330 video and audio channels to small dish antennas on Japanese homes.The Financial daily Nihon Keizai Shimbun reported on Monday that Sony, Matsushita and Toshiba may set up a joint venture as early as this autumn, and were inviting other firms including Hitachi Ltd and Tokyo Broadcasting System Inc to participate in the project.

"We hope to invite other companies to participate, as well," a Toshiba spokeswoman said.

The alliance follows plans by the three firms last month to develop a standard digital TV set-top format to pick up signals from broadcast satellites and next-generation communications satellites, allowing them to cut investment costs.

Broadcast and communications satellites currently use different encoding and decoding technologies, requiring consumers to buy separate hardware to receive those services.Public broadcaster NHK airs programmes via a broadcast satellite, reaching 13 million subscribers, or one in three Japanese households.

-- Reuters