Market Insight

Czech-Slovak satellite player SkyLink to fully integrate offer with sister company

September 25, 2012

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M7 Group owned Czech-Slovak satellite operator CS Link will stop offering pay TV by the end of November 2012. CS Link's subscribers will be offered pay TV packages from sister company, SkyLink while CS Link will continue providing free satellite channels.

Both operators are owned by M7 Group which acquired CS Link in February 2011 and SkyLink in October the same year. After acquisition of SkyLink, although there was no official plan of merge, the operators started gradual integration of their services with package offers changing and SkyLink's service been recently advertised to CS link's subscribers.

SkyLink also distributes some of its pay TV channels through T-Mobile in Czech Republic, offering over 40 SkyLink channels under the T-Mobile brand. SkyLink has also opened a similar distribution channel in Slovakia, with a newly signed deal with Slovak Orange. The Slovak mobile operator offers 14 TV channels from SkyLink's transponders on a platform called SatTV Extra. Additionally, Slovak Orange provides access to a VOD service, Topfun Start, from its IPTV platform, Fiber TV.

In the beginning of September 2012 CS Link and SkyLink had a combined subscriber base in Czech Republic and Slovakia of over 2.4m registered cards, of which 15-20 per cent have pay TV subscriptions. M7 Group also owns pay TV platforms Canal Digitaal (Netherlands), Telesat (Belgium and Luxemburg), TV Vlaanderen (Belgium), and Austria Sat (Austria), providing TV services to over 950,000 homes.

Satellite TV penetration in Czech Republic and Slovakia is relatively high, reaching in September 2012 45 per cent of Czech and 40 per cent of Slovak homes. In both countries the free satellite platform has been growing strongly. Two thirds of satellite homes in Czech Republic watch free satellite TV and in Slovakia - nearly half. This relatively high freesat penetration is due to the successful growth of the SkyLink and CSLink services, both of which provide cards enabling access to free major local channels, which broadcast through satellite encrypted.

Initially CS Link and SkyLink had quite similar channel line-ups, focusing on pre-paid offers for the low-budget sector of the market. Later CS link made is possible to order a number of channels as a la carte, also marketing small thematic packages, while SkyLink decided to focus on building up its HD and premium channel portfolio without launching any thematic packages.

Apart from SkyLink there are also three other satellite players: Liberty Global's freeSAT, RCS&RDS-owned Digi TV, and Slovak Telecom's MagioSat (the last only in Slovakia). After recently completed analogue switch-off in the Czech Republic and Slovakia the competition in both markets has become very fierce with all the operators launching very aggressive marketing campaigns.

Liberty's satellite platform, after rebranding in 2011, reversed a declining trend in Czech Republic and started to grow. It now offers pre-paid satellite services, including free-to-air encrypted channels at no monthly subscription (just a one-off payment for the card) and high-end packages at aggressively promotional prices.

Reorganisation will help SkyLink to strengthen its offer. It currently has over 60 pay channels in its offer, including 25 in HD. The operator is planning to extend its portfolio further and to position itself more and more as a high-end player, competing directly with Liberty Global's freeSAT, and upgrading its free satellite homes to pay packages. A recently introduced technical fee CKr29 (about €1) monthly for the package with free to air encrypted channels may be considered as a way of closing the gap between freesat homes and pay, accelerating migration to pay TV. It is also likely that in the near future SkyLink will also take over CS Link's free satellite households.

Mergers and acquisitions among satellite platforms in Central and Eastern Europe - where nearly each country has at least three satellite TV platforms - happen quite often. In September 2012 the competition office in neighbouring Poland gave the green light to a merger between Cyfra Plus and N, which confirms a general trend in the region. On the other hand however in a few Central Eastern European markets there is still some room left for new satellite players, Ukraine being a notable example, where two additional platforms are due to launch by the end of 2012, boosting the satellite total to five.

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