Orange, the biggest mobile telephony company in Romania, believes the local satellite TV market (DTH) is closed to new players, and has scrapped its plans to launch a new DTH platform, after it took into account both the boom of the domestic market and the fact that RCS&RDS and Romtelecom have come to account for almost 90% of the almost 2 million TV satellite clients.
"Our entry on the satellite TV services market would be a very difficult step to take at the moment. The market has already grown a great deal, so one can assume that there is very little room for new subscribers in this department. This is a market that is more or less close to maturity," Julien Ducarroz, 32, Orange's new strategy director told ZF. He explained that, theoretically, Orange could have contemplated the acquisition of a DTH operator in Romania, although the structure of the market would have needed to be different for this to actually happen.
"Even if a decision were made to look at the market, we would notice that the main player is DigiTV (held by RCS&RDS), and under the circumstances, we would need to buy a player in a similar position. However, there is no obvious candidate on the market for this (takeover i.e.)," the Orange official said. In 2007, the number of clients for DTH services went up by 177%, after RCS&RDS and Romtelecom attracted the majority of clients on the market, because of their aggressive pricing strategy. Other players on the market include UPC Romania (Focus Sat), DCS Romania (Max TV) and DTH Television Group (Boom TV), but each of the three players is far behind the market leaders, with less than 200,000 clients. DigiTV (RCS&RDS) has 1 million customers and Romtelecom (Dolce) half a million.
Swiss born Julien Ducarroz believes other factors that make it hard for Orange to enter the DTH business are the market's low rates and the "huge" supply of TV channels from DTH operators. Last year, Orange announced that it planned to enter the TV services market in the first half of 2008, in order to become a full service provider on the tele-media market (fixed and mobile telephony, Internet and TV). RCS&RDS is the only quad-play service provider at the moment. Orange Romania will sell TV services "at some point", according to France Telecom's strategy to provide the entire tele-media range of services on this market, but how it will do so has yet to be decided, even though some ideas do exist. "There is the model of partnering with a cable TV operator. Maybe one day one of these operators that does not have such a powerful brand will provide us with the content delivery platform. This is something that Orange did in Poland. Nothing has been decided in this department yet," Ducarroz told ZF.
At the end of last year Richard Moat, Orange Romania CEO, announced plans to enter the TV market. "Competition has already taken steps in this regard, that is RCS&RDS' entry on the mobile telephony market, by launching 3G services in Oradea or Romtelecom and Cosmote partnering to provide services together. Telemobil in turn, which holds a 3G licence, will launch such services early next year. I believe we will most likely include quad-play services in the company's portfolio in the first half of 2008."
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