MARCH 11, 2010
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UPC reveals Romanian strategy
UPC Romania plans to invest €30 million on infrastructure rather than expand its network this year. Quoted in ZF, the company’s CFO Severina Pascu said that the money would be used to raise internet access speeds, increase the number of value added services and optimise processes. In the case of internet access, the aim is to up the current maximum download speed from 24 Mbps to between 160-180 Mbps. However, this will be done gradually and in accordance with how the market responds. UPC Romania’s decision to focus on improving its existing services rather than to expand is understood to be down to the competition it faces from Romtelecom and RCS/RDS, which currently offer maximum download speeds of 30 Mbps and 100 Mbps respectively. Although UPC has enjoyed some success in selling HD services to its digital subscribers in Romania, DVR still has to be explained and “pushed” in the market, added Pascu. Significantly, a typical digital subscriber opting for HD channels and a DVR product provides UPC with as much revenue as four analogue cable customers.

Polish cable seeks universal set-top box
The Polish Chamber of Electronic Communications (PIKE) has launched an initiative designed to speed up the rollout of digital cable services in the country. Speaking to Broadband TV News, its president Jerzy Straszewski said it is “looking to help small and medium sized operators. We want to, with European funding (the project is financed by the EU from the resources of Operational Programme Innovative Economy, Priority Axis 5.2), find the best way for digitisation.” He added that there is “a need to have as many set-top boxes for as little as possible. We have approached manufacturers to suggest a solution that fulfils all requirements (DOCSIS 3.0, etc) but is not expensive.” Manufacturers and distributors are specifically invited to the 36th PIKE conference and exhibition, due to be held in the Congress Centre in Ossa near Rawa Mazowiecka from April 26-28. There they will be able to demonstrate their products and given the option to hold workshops. This, it is hoped, will lead to the selection of a universal set-top box for the Polish cable market. For further details, please go to: www.konferencjepike.pl

RCS/RDS provides strategic insights
Romania’s RCS/RDS, one of the leading providers of TV services in the CEE region, has provided unusually frank insights into its financial performance and business strategy. Speaking at length to ZF, its general director Alexandru Oprea said the company had an operating profit of $274 million (€200.7 million) on revenues of $710 million in 2009. As of the end of 2009, RCS/RDS had 8.225 million subscriptions for internet, telephony and TV services in six markets, the biggest being Romania (6.74 million) and Hungary (840,000). This, added Oprea, was down to an investment level comparable to that of Orange, Vodafone and Deutsche Telekom/OTE, even though its income was lower than that of international competitors. All told, he continued, RCS/RDS invested over $1 billion between 2007-9, chiefly on infrastructure development. This means that it now faces lower capital expenditure than competitors such as UPC and Romtelecom and is well positioned to grow further. Commenting on last month’s postponed $200 million bond issue, Oprea said that the response had been good from potential investors. However, market conditions, affected by the Greek debt crisis, forced it to delay the process.

TVP/Astra deal under spotlight
Poland’s Public Procurement Office (UZP) is understood to be investigating whether the former TVP president Piotr Farfal acted within the law in extending an agreement with SES Astra until 2014. Gazeta Prawna says that it has received information that UZP is looking into the agreement, signed in September 2009 just prior to the launch of the public broadcaster’s DTH platform and Farfal’s dismissal shortly afterwards. It adds that even if the UZP concludes that the agreement was unlawful, it can only be annulled in a court of law. Should this happen, SES Astra could demand compensation of at least the value of the contract to 2014. Contacted by Broadband TV News, SES Astra said “we have a valid agreement.” TVP is already facing serious financial difficulties and reported to be considering the curtailment or even partial suspension of TVP HD and thematic channels TVP Historia and TVP Sport.

Pink secures Slovenian DTT carriage
Pink SI has become the first broadcaster to sign up for carriage on what will be Slovenia’s second DTT multiplex. This follows an agreement reached between Pink SI, which is part of the Serbian Pink TV group, and Norkring International’s Norkring, the multiplex’s operator. The second multiplex (B) is due to make its debut on September 1 and expected to reach 85% of the population before Slovenia undertakes ASO exactly three months earlier. It will be allocated to commercial stations, contracts with which are likely to be signed by Norkring within a matter of weeks. The first Multiplex (A), which is already up and running, is for the sole use of the national public broadcaster RTV Slovenia.

Orange/Vodafone eye Romanian TV market
Orange and Vodafone are seeking a reduction in the access fees charged by the Romanian incumbent telco Romtelecom to its infrastructure. This, reports ZF, would allow them to offer a wider portfolio of services including IPTV. Orange is already on record as having said that its plans to enter the satellite TV market in Romania were scuppered by the appearance and rapid growth of Romtelecom’s Dolce DTH platform. Furthermore, both Orange and Vodafone have in the past sought ways of entering the Romanian TV market by cooperation with UPC and Boom TV. Romtelecom, which provides fixed line services to over 4 million homes, is expected to fight a draft decision by the regulator ANCOM obliging it to reduce access fees to its infrastructure. In its view, Orange and Vodafone have sufficient financial clout to steal existing customers through aggressive deals. IPTV is still relatively undeveloped in Romania, with providers few and far between and Romtelecom having only launched a service in December last year.

Digital cable grows in Poland
Poland’s 10 largest cable operators ended 2009 with a combined total of 770,900 digital TV subscribers, according to data produced by the Polish Chamber of Electronic Communications (PIKE) and published by Wirtualne Media. Although Vectra still accounted for the most (240,000), it was closely followed by UPC (229,400), while Multimedia Polska (106,000) was in third place and Aster (83,000) in fourth. UPC ended the year claiming the largest share of overall TV subscribers (24.23%), followed by Vectra (16.73%), Multimedia Polska (14.96%), Aster (8.44%), Toya (3.56%) and Inea (3.04%). The top 10 operators listed in the figures accounted for just over 75% of all subscribers.

INEA launches multiroom service
The Polish cable operator INEA has begun to offer a multiroom service. According to the company, it costs PLN25 (€6.41) a month and gives access to over 120 TV channels already available in packages (standard, thematic and premium) to its 62,000+ digital subscribers. However, HD channels are not included in the service. INEA is based in the city of Poznan and groups together a number of cable operators located in the Wielkopolska region of Poland.

TV app debuts in Czech Republic
The first application that allows viewers to watch live TV on iPhones and iPads has appeared in the Czech Republic. HN says it is produced by the Czech multimedia company Mediawork and offered free of charge, with the only cost incurred by viewers being for internet access. The first channel being offered via the application is Z1 and others, which have not yet been named, will follow.

Hungarian broadband market grows
Hungary ended 2009 with over 2.8 million internet subscriptions, of which 57% were broadband provided by either via xDSL or cable TV. According to data published by the Hungarian Statistical Office (KSH), the number of broadband xDSL and cable TV homes rose by 4% in 2009. The data also shows that cable operators claimed a 15% of the fixed line voice market at the end of 2009. However, the actual number of cable homes receiving fixed line voice telephony fell by 55,000 in 2009.

 

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Magyar Telekom launches weather channel
Magyar Telekom’s Origo.hu has officially launched a weather channel that can be viewed on TV, over the internet and via mobile phones. Known as OzoneNetwork, its programmes can also be watched by T-Home IPTV subscribers free of charge for seven days after airing, either in their original language or in Hungarian. OzoneNetwork is initially being made available to around 2.5 million viewers in one million households. Its website has been active since October 2009 and has registered around 50,000 hits daily. Based on T-Home IPTV viewing data, it is expected to vie with Spektrum for fourth spot in terms of most watched thematic channels in Hungary. OzoneNetwork joins the lifestyle/documentary channel LifeNetwork and is part of what Róbert Pataki, Magyar Telekom’s chief strategy and corporate development officer, describes as the company’s “three screen strategy”.

 


Chris Dziadul

Chris Dziadul Reports

Breakfast in Bucharest
On April 14, Broadband TV News will, along with Telenor Satellite Broadcasting, host its second business breakfast in the Romanian capital, Bucharest.

Much has happened in Romania’s TV industry since the first such event in June 2008. Despite the debilitating effects of the global economic crisis, it remains one of the most dynamic and competitive in the CEE region.

In the DTH sector, confident predictions that there would be consolidation have yet to come true: the marketplace is still managing to support five platforms, with the two largest (Digi TV and Dolce) claiming a combined subscriber total of almost 2 million.

Meanwhile in cable, UPC has rolled out such additional services as digital TV, HD and PVR. Just as importantly, it has managed to stem the significant subscriber losses it was experiencing less than two years ago.

RCS/RDS has meanwhile invested heavily in infrastructure. Despite some financial worries, highlighted last month by the postponement of a $200 million (€146.9 million) bond issue, it is well placed to maintain its position as Romania’s leading operator.

The incumbent telco Romtelecom has also made huge strides since June 2008. Last year, in particular, was highly significant for the OTE/Deutsche Telekom-backed company, which saw its Dolce subscriber total grow by 37.5% and also launched an IPTV platform.

Furthermore, it has begun to re-enter the cable market. Just last month, it was confirmed that its subsidiary Nextgen Communication is buying networks from a company named New Com that will take its subscriber total from a current 30,000 up to 100,000.

Romania now also has a strategy for the transition to digital broadcasting in place and should have its first two multiplexes up and running by the end of this year.

Competition between providers of subscription TV services is intense in Romania and is likely to remain so for the foreseeable future.

This, and a host of other issues, will be discussed at the April 14 business breakfast in Bucharest, full details of which will be announced shortly.


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