Market Insight

Russia's multiplex 2 launched amid fear of delay in network roll-out

July 02, 2013


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Russia's second digital terrestrial television (DTT) multiplex has launched in Kazan, the capital city of Tatarstan in the European part of the country.

Operated by transmission company RTRS, the multiplex includes nine free-to-air channels in DVB-T2 is currently available to about 1.4m people in a 40-60 kilometre area around Kazan. By the end of the year, coverage will be increased to 70 per cent of the 3.8m population in the Tatarstan region.

The channels broadcast on multiplex 2 were awarded licence at the end of 2012. They include public channels Sport, Zvyezda and Myr, as well as private networks Ren TV, CTC, Domashnyi, Sport Plus, TNT and Muz TV. In addition to paying Ru36.1m ($1.2m) for the licence, the channels were also required to pay Ru1.47bn ($45m) each to cover the cost of the network roll-out.

DTT is rolling out on a region-by-region basis. Multiplex 1 started broadcasting in Kazan in March 2013. It is planned that by the end of the year it will cover 80 per cent of the region's households. In total 19 free-to-air DTT channels are now available in Kazan.

According to the digital transition schedule, by the end of 2015 all Russia's territory should be covered by DTT. Analogue switch-off is set for 2017.

Multichannel TV penetration in Russia is now at 75 per cent of homes, with pay TV in 65 per cent. With room for growth and little competition from free-to-air, all Russian pay TV platforms keep growing in terms of subscribers. According to IHS Electronics and Media, by the end of 2013 pay TV penetration will exceed 80 per cent of Russian homes. DTT roll-out started in Russia in 2010. However, in 2011 the authorities decided to change the broadcasting technology from DVB-T to T2. In the regions where DVB-T launched have yet make transition to DVB-T2 broadcasting format.

T2 receivers are already available in Russia, with prices starting from about Ru1,400 (€35). With supplies of the boxes continuing, prices will likely decrease. For the moment no subsidies have been assigned to support low-budget households.

Although multiplex 2 has already launched it has not yet been decided whether, or not, the channels from this multiplex will be given must-carry status like the channels on multiplex 1. Small cable TV players would surely welcome such a decision, helping them to avoid negotiations with big channels, which, using their market position, would likely demand carriage fees for broadcast.

Development of multiplex 2 may be delayed by an investigation called by the Russian Antimonopoly Agency (RAA) into the tender for the systems integrator working on the multiplex 2 network. The winner of the tender, which was organised by RTRS, was a group of companies headed by TD Svyaz Engineering. After complaints from other participants, the RAA will now check the tender's conditions. According to some local sources, the enquiry may delay work on multiplex 2 roll-out until the start of 2014.

At the same time in neighbouring Belarus, the country's incumbent telco, Beltelecom, is about to launch  a pay DTT service with over 20 channels to be watched on top of eight free to air DTT channels currently available on nearly all territory of the country. DTT has already launched in Ukraine, Armenia, Azerbaijan and Uzbekistan. In Azerbijan, DTT reaches well over 90 per cent of the country's households; in Uzbekistan, 50 per cent. Ukraine, Belarus, and Uzbekistan will switch to digital TV in 2015; Azerbaijan and Armenia intend to make the transition at the end of 2014.

Organization
RTRS TD Svyaz Engineering
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