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ThE MaStEr

The Russian way


To get an insight into where the TV industry is right now in Central and Eastern Europe – and perhaps more importantly where it may be heading – one need look no further than Russia, the region’s largest market.
Its cable sector, though 3-4 times bigger in terms of subscriber numbers than second placed Poland’s, is like many of its counterparts embarking on a period of consolidation. This year alone has already seen MTS, the majority owner of the second largest operator Comstar, buy Multiregion, the fifth largest, for around $208 million (€148.9 million) including debt.

Akado, the third largest operator, has meanwhile become a takeover target for – amongst others – the national telco holding company Svyazinvest, while ER-Telecom, the fourth largest operator, has just secured the investment group Baring Vostok Capital Partners (BVCP) as a 10% shareholder.

While the leading cable operator National Cable Network (NCN) has not been involved in any major takeover activity this year, chances are it may be in the near future.

Given the restrictions that exist in Russia, we are unlikely to see foreign players move into its cable industry anytime soon. However, sooner rather than later – as indeed elsewhere in the region – we will see that industry reduced to only one or two major players.

We can also expect, though at a later date, consolidation to get under way in the DTH sector. At present developments in Russia closely mirror those elsewhere in CEE, with satellite platforms continuing to spring up on a regular basis. This year alone has seen the launch of Orion Express’s Continent TV and (we believe) Telekarta, and more could well follow in the months to come, with Svyazinvest being a candidate to launch an operation.

Although Russia has made more progress than most countries in the region in rolling out IPTV services, they only account for around 2-3% of the pay-TV market and are unlikely to make a major breakthrough in the near future.

In the case of DTT, it is some way behind the rest of the region, having fixed its ASO date at a still distant 2015. However, it has embraced HD and is showing stronger interest than most other CEE markets in 3D, with the DTH platform NTV-Plus having launched a channel in the format, in partnership with Panasonic, as recently as last month.

Russia is by no means the ‘archetypal’ CEE TV market. The progress it is making nevertheless reflects that of the region as a whole and points to a promising future.


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The Russian way





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