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ThE MaStEr

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What should we read into the fact that the pay-TV subscriber total in Romania fell in the first half of this year?
Well not a great deal, according to the president of the regulator ANCOM, who believes it could be down to a number of factors including under-reporting by operators and people who were previously receiving several services deciding to cut back.

However, speaking at this week’s ACC Convention in Bucharest, he did concede that 2010 has been a difficult year for the electronic communications industry in Romania.

Speaking exclusively to Broadband TV News, ACC president Radu Petric was positive about the country’s new Infrastructure Law, which should finally be passed by the end of this week. However, whilst making life much easier for the cable industry – the legislation will effectively put a legal framework into place giving operators more security in their dealings with infrastructure owners – it will, in his view, only be the start of a process.

Petric added that copyright fees remain a contentious issue, with the seven collection societies – there was until recently only one – seeking to hike the fees they charge operators from 6% to 12.5% of their monthly revenues. Copyright fees are negotiated every three years, with the next talks due in a year and half’s time, and the issue of the proposed increase is being currently contested in the courts, a verdict being due at any day.

Commenting on the Romanian DTH market, Petric said that as a business it is saturated. What is more, it is suffering significant churn, especially in areas where it competes with cable, which can offer customers more. Ultimately, “customers that you gain by aggressive pricing (which is something that DTH has done) are not loyal.”

Meanwhile in the cable sector, there is clearly a price war going on between RCS/RDS, UPC and Romtelecom, with RCS/RDS having recently taken the bold move to give away voice, which accounts for 80% of revenues, for free. While the aim of this price war is to gain market share, there is, in Petric’s view, no market share available to fight for.

Significantly, Petric only sees this ‘war’ coming to an end once UPC clarifies its strategy in Romania – a move everyone is waiting to see.

Commenting on the Netcity project under which a fibre-optic network is being constructed in Bucharest, Petric said that it was proceeding at an extremely slow pace, with a number of issues still to be fully clarified.

Romania’s cable industry is certainly going through challenging times, in large part due to the difficult economic situation the country currently finds itself in. However, it is gaining at the expense of DTH and its future looks positive.

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