Market Insight

Romania to launch DTT in September 2010

June 17, 2010


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Romania's telecommunications regulator, ANCOM, has released details for two DTT multiplex licences, which will be awarded in September. ANCOM has set 2012 as the target for analogue switch off.

A public consultation will end on 25 June, and bidders will have to until 19 August to submit their applications by 19 August. ANCOM is planning to announce the winner of the licence for the first multiplex on 20 September, and for the second multiplex on 30 September. According to the conditions, the two multiplexes will broadcast only free channels and there should be at least two public channels - TVR 1 and TVR 2 - on the first multiplex. The licences will last for 10 years.

With bonus points given to candidates in the processing of the applications, ANCOM wants to ensure that the commercial launch will take place within 90 days from granting the licences, as well as that the winner will supply the maximum number of free set top boxes (over the minimum set by ANCOM at 60,000), the cost of which will be subtracted from the licence fee. The successful candidate is also expected to fund an information campaign.

The specifications provided by ANCOM also include a roll-out schedule. By June 2011 DTT will cover at least 60 per cent of Romanian homes; by December 2011, at least 80 per cent; and by June 2012, 90 per cent of homes.

Year 2012 is also scheduled as the year of analogue switch-off. Due to geographical conditions of the country, ensuring the coverage exceeds 90 per cent of the population will mean relatively high costs. The winner is expected to increase DTT reach to 95 per cent of the population by mid 2015. The regulator expects that the 10 per cent of population which in 2012 may be left without terrestrial TV, will get TV service from other platforms.

DTT tests have been conducted in Romania since 2005 by the transmission company Radiocom. In total Romania will have seven multiplexes, including one planned for DVB-H.

A number of Central and Eastern European countries have already launched a DTT service. In the  beginning of June this year Latvia was the first country from the region to switch off analogue TV, with its neighbour Estonia following on 1 July 2010. Slovenia is expected to switch over in December, with Croatia in January 2011, and Hungary to follow in June 2011.

Some countries in the region, including Serbia, Ukraine, and Poland, have not yet worked out a clear transition plan. In Poland DTT launched last year, but the roll out has been held up by licensing problems.

The late launch of DTT in Romania (as in Poland) has helped the growth of the satellite pay TV, with five players currently providing pay TV services to just under 40 per cent of Romania's households. Cable TV penetration is even higher - at about 45 per cent, and at the end of 2009 Romtelecom launched the first commercial IPTV service in the country.

Under such circumstances, Romanian DTT would be very unlikely to reach a penetration over 10 per cent of homes with DTT on their primary TV set. Its chance, however, might be the lack of operators with low cost offerings. After a few years of very fast growth of pay TV, which ended up with very aggressive promotions and low prices across the board, households still remaining on analogue terrestrial belong to lowest budget sector. Still there is no offer targeting this very sector, as there is, for example, in the equally saturated Polish market (Telewizja Na Karte). With growth generally slowing down, lower priced offerings are now likely to be launched.

Another issue is the approach of the major broadcasters. The example of some other CEE countries shows that major terrestrial channels are often reluctant to join the digital terrestrial platform.

Geography
Romania
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