When it comes to Central and Eastern Europe, beauty is in the eye of the outside investor. Which is why, perhaps, Canal+ has chosen to go down the cautious route and focus its efforts on one market – Poland – and CME has developed a fixation with the Czech Republic and, more recently, Ukraine.
Liberty Global, too, has its key markets in the region, with Hungary the centre of operations and Poland a close second. Others such as Slovenia, though clearly important, are probably more peripheral.
This week’s report that Liberty Global is looking at expanding into Russia is significant on a number of levels. It is probably the first time in over a decade that the company has publicly expressed an interest in such a move and indicates the degree to which the country now appeals to outside investors of the calibre of Liberty Global.
Not that Russia has all of a sudden become attractive to foreign companies: its enormous potential was recognised even during the economic slump in the late 1990s. Now, however, there is much more substance to the view.
The country’s cable industry, in particular, is starting to take off in a big way. Though Shane O’Neill’s quoted figure of 25 million customers is questionable – industry sources put the number of subscribers at 13.5 million in mid-2007 – Russia still represents by far the largest cable market in the region.
What is more, despite many of these subscribers receiving only basic services from small operators, the last few years has seen the emergence of several powerful operators. Indeed, six companies, headed by Nafta Moskva, are now believed to account for around 55% of all connections.
Whether Liberty Global enters into a partnership with one of these ‘big six’ or chooses a smaller player remains to be seen. Any move into the country, at whatever level, will be a significant milestone in the company’s involvement in the region.