While United Group seemingly goes from strength to strength across South-East Europe, its problems continue to mount in one particular country.
Serbia, where the group traces its roots back to, is proving to be increasingly challenging market for it to operate in. Besides already being involved in a long-running dispute with the state-owned incumbent Telekom Srbija, it has now found itself at loggerheads with Kopernikus Corporation, the operator of the national TV channels Prva TV and B92.
In a report earlier this week, Serbia Broadband (SBB), which is part of United Group, said that Kopernikus’s owner Srdjan Milovanovic is asking it to pay €38 million for the distribution of Prva TV and B92 and three additional cable channels instead of the current price of €3.5 million. It went on to say that this unreasonable request, amounting to an increase of 1,000%, was not down to any major investments in improving the quality of the channels. In fact, their viewership has been declining in recent years, according to TV Beat and AGB Nielsen.
SBB added that it has taken the decision to remove the five channels from its offer on October 28, replacing them with five completely new channels. It also made the point that viewers can watch Prva TV and B92 for free using an ordinary antenna and highlighted the fact that Kopernikus announced the increase 50 days ago, right after the two channels had been re-awarded national licences.
Perhaps not surprisingly, Kopernikus has its own take on the situation. According to B92, the price rises have nothing to do with the licence awards and were introduced because the existing contract with SBB was expiring. Furthermore, the channels Kopernikus is offering account for around 30% of the audience share of all channels in SBB’s network.
Kopernikus has also accused SBB of manipulating data “because it adjusts the operations of related parties in order to find a way to take money out of the country to Luxembourg, with the aim of reducing the profit and the tax that should be paid in Serbia”.
All this comes against the backdrop of the controversial national licence awards this summer by the regulator REM. Four in total were granted to existing broadcasters, all of which are considered pro-government.
A competition for a fifth licence is now under way, and the odds seem stacked against United Group’s Nova S, one of four candidates.
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