Market Watch

Czech Transmission Company Expands with New Owner


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Czech transmission company, Ceske Radiokomunikace (CR) has agreed to buy digital terrestrial television (DTT) operator Czech Digital Group, giving it control of two of the country's four DTT multiplexes. To move follows last week's purchase of CR by Australian investment bank Macquarie for CKr 14bn (€574m). Czech Digital Group was owned by Dutch company S PD Corporation. The acquisition is subject to approval from the Competition Office.

Maquarie is buying CR from Falcon Group, a subsidiary of Mid Europa Partners (MEP) and Al Bateen Investment (ABI). Falcon will retain its 39.2 per cent in the Czech subsidiary of T-Mobile. MEP, ABI, and Lehman Brothers bought CR in 2006 for €1.2bn. MEP acquired then Lehman Brothers' shares to raise its stake in Falcon to 75 per cent. Currently, there are 14 channels broadcast on the Czech DTT platform, including five channels on operated by CR multiplex 2, and two on multiplex 3. Public broadcaster CT owns multiplex 1 while Telefonica O2 is the operator of multiplex 4.

Analysis
Czech DTT is doing relatively well. Multiplex 1 covers the entire territory, multiplex 2 reaches nearly 90 per cent of total homes, while multiplex 3 covers over 70 per cent of households. Multiplex 4 (using MPEG-4 compression, while the others use MPEG-2) is still in test phase.

Analogue switch-off is set for mid-2012. The Czech Republic is now preparing to upgrade the broadcasting format in order to launch more channels and HD technology (not enabled by MPEG-2), and possibly pay DTT.

Recently the telecom watchdog gave CR the green light to start DVBT-2 tests and the operator is apparently interested in further investments in DTT. MEP now appears to be more interested in mobile telephony, as well as cable and satellite TV, sectors generating higher revenues than DTT. The investment group has recently sold Poland's fourth cable TV operator, Aster, to UPC Polska; exited Bulgarian satellite TV; made a franchise deal with B.Net in Croatia about its satellite platform TotalTV; and bought two thirds of Hungarian cable TV provider, FiberNet.

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