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New Crisis, what crisis? - 13-November-2009, 10:10

Crisis, what crisis?

November 13, 2009

Clearly all is not well with Romanias cable industry. But to describe its current predicament as a crisis is probably an exaggeration.

This time last year the storm clouds were gathering, with the industry fearing the worst as the economic tsunami spread around the world. Its concerns were to some degree justified, given matters beyond its control.

Since then, Romania has had a difficult time, perhaps more so than most other countries in the Balkan region. On the political front, it currently finds itself without a government following the collapse of a short-lived coalition. A new one will only be formed following presidential elections, due to take place later this month.

Its economy meanwhile sank into recession in the first quarter of this year, and a recovery now looks increasingly unlikely before 2011.

For cable, the biggest concerns undoubtedly centre on competition and the depreciation of the local currency against the euro and dollar. There is also the potential threat that DTT will pose in the near future.

The biggest challenge is that to smaller operators, with the big boys, namely UPC and RCS/RDS, having deep enough pockets to not only survive but also thrive. UPC, certainly, is making strong progress on a number of fronts its digital TV service claimed 202,900 subscribers as of the end of Q3, while its HD offer, introduced only at the beginning of last month, is now received in 3,000 homes.

UPC has also just embarked on an aggressive sales campaign, offering subscribers new packages free of charge for the first three months. RCS/RDS, the market leader, has responded almost instantly by introducing a similar offer.

While they have little to fear from smaller cable players, with perhaps the exception of DCS, the ambitious number three operator, the incumbent telco Romtelecom is undoubtedly something of a bte noire. Its DTH platform Dolce saw its subscriber total rise by 49% in the year to September 30 and, having long overtaken UPCs Focus Sat, is now posing a serious threat to RCS/RDSs Digi TV, the market leader.

Romtelecom is also competing strongly with cable in the provision of broadband internet services and will open up a new front in the video sector when it finally launches its long-awaited IPTV operation.

Romanian cable certainly has a fight on its hands in what is an increasingly cutthroat marketplace. However, it is certainly one that at least its leading players are more than capable of winning.

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