Why is the current situation in Romania’s TV industry worth keeping a close eye on?
The short answer is that it will in due course almost certainly impact on the CEE region as a whole.
Take, for instance, the speculation surrounding UPC Romania’s possible take-over by RCS&RDS. Should a deal go ahead, it would leave the market with a dominant player providing pay services to some 60% of the country’s TV homes. The incumbent telco Romtelecom, its nearest rival, would meanwhile find itself with only around a quarter of RCS&RDS/UPC Romania’s subscriber total, and AKTA a very distant third.
Selling UPC Romania to RCS&RDS, or indeed any other party – some local sources indicate that Romtelecom could also be a prospective buyer – would also be a highly significant move for its owner Liberty Global. Although it undoubtedly still considers Romania an important market, the company’s main focus in the region is now almost certainly on countries such as Poland and Hungary. Elsewhere, Germany is rapidly becoming something of a jewel in the crown for Liberty and other parts of Western Europe enjoying steady growth.
Romania will also shortly see consolidation in its DTH sector, served until now by no fewer than five platforms, finally get under way. Earlier this week it was confirmed that Romtelecom has entered into an agreement with the DTH Television Group, the operator of Boom TV, in a deal dependent on the number of subscribers the latter has.
Perhaps not surprisingly, Boom TV is the weakest of the five platforms and has been shedding subscribers in recent months. Its acquisition by Romtelecom would sit well with the latter’s ambitions of becoming the leading provider of pay-TV services in Romania within two to three years.
However, the telco has financial problems and its future strategy will ultimately be determined by its backer OTE and Deutsche Telekom.
Telekom is already a formidable player in CEE, chiefly through its DTH and IPTV operations, and it is known to be interested in expanding its activities.
The deals we may shortly see in Romania will be among the first in CEE since the onset of the global economic crisis. As such, they are likely to act as a catalyst for others elsewhere in the region.
