While this year’s Romanian cable conference was a somewhat subdued affair, the industry still has much too look forward to.
It goes without saying that the single biggest problem it currently faces is a highly damaging price war that, according to ACC president Radu Petric, has driven down the average monthly subscription fee in the last two years from €7 to €5. This makes it almost impossible for operators to make money from video and internet services, with telephony offering the only – though probably also limited – opportunities.
It is also all too apparent that despite the introduction of ultra fast internet access and HD channels by the likes of UPC, such advanced services are only affordable by the more affluent sections of the community, living chiefly in Bucharest and other large cities. Many people in rural areas, especially those aged 40 and upwards, have little knowledge of, or indeed have never used, the internet. It will take a lot of education, and indeed money, to turn things round.
The speculation surrounding the possible sale of UPC to RCS/RDS, which has now been going on for over a year, has also had a damaging effect on the industry. Speaking to delegates at the conference, one quickly came to the conclusion that no one really knows what’s going on.
However, an interesting bit of gossip was that the two parties could consider an asset swap of some kind in CEE. Which, perhaps, is not as far fetched as it sounds, given their widely differing performance in some markets.
Of particular concern was the fact that all the leading players – RCS/RDS, UPC and Romtelecom – are losing money, a fact borne out in a study just published by Media Expres. On the other hand, some of the smaller players are doing quite well, with one (Ines, which operates a long-established IPTV platform in Bucharest), actually making a profit of almost €500,000 in 2010.
Given the size and dynamic nature of the Romanian market, the problems currently being experienced by the cable industry, in particular, are unlikely to be as long-lived as some may fear. However, as Radu Petric pointed out, something will have to give.
It should also be pointed out that all is not gloom and doom in Romania. Even in these difficult times in Europe, the country is predicting economic growth of between 1.8% and 2.3% next year. Admittedly, not much is likely to be down to the telecom sector, but it should benefit to some degree.
