10. 03. 2014

CITIZENS AND THE STATE INSIDE THE CABLE NETWORK

10. 03. 2014 (Politika; by Bojan Bilbija ) - About 60 percent of the market in Serbia is covered by cable operators which use the cable distribution systems (KDS), satellite communications (DTH), the Internet (IPTV), and there are also new opportunities for signal reception via wireless radio networks.

According to the Republic Telecommunication Agency (RATEL), the KDS systems cover 72 percent of subscribers, DTH 16 percent, and IPTV 12 percent. However, with the introduction of cable television new problems arrived. For example, if the local (cable) operator IKOM stops carrying on its network the American TV channel CNN, citizens do not have an opportunity to influence this decision.

The production of media content used to be under the exclusive jurisdiction of the Republic Broadcasting Agency (RBA), which granted licenses for terrestrial broadcasting of TV and radio programs, and licenses for the distribution of TV programs via KDS. The Internet access is not regulated, but it will become in the near future the dominant medium for distribution of media and other content, which requires the need for new regulation in the field of broadcast media.

Revenues generated in the cable market are constantly increasing. In 2011 the revenue was 10.349.000 dinars, and in 2012 it increased to 12.370.000 dinars, up by nearly one fifth, explains Milenko Ostojic, former member of the RATEL executive board. Revenues are collected mostly from subscriptions (91.6 percent), for connecting to the network (7.2 percent) and other services (1.2 percent).

The average subscription price is above 700 dinars per month. There are also other ways of revenue generation for cable operators, which are rarely mentioned. Order in this area should be brought by a new law on electronic communications, which should be in line with European standards. It should prevent the shutdown of many private media, and multi-million losses by the state.

In addition to the European Union insisting that the new law binds the state to exit from media ownership and its explicit position against operators being founders and owners of media outlets, the EU also requires that the status of the so-called cross-border channels be defined. These are TV programs broadcast from abroad, and re-broadcasted in Serbia. At present there are about 100 such programs.

In this way, the existing Law on Broadcasting is being violated, because Serbia is a signatory of an international agreement which guarantees broadcasters from abroad the freedom of reception and re-transmission of media services on the territory of Serbia. However, cross-border channels (FOX, Fox Movies, Fox Crime, Fox Life, AXN, Universal, MTV, TV 100, Cinemania, CinestarTV, Health Club, Animal Planet, Discovery, Explorer, TLC, 24Kitchen, National Geographic, History ... ) re-edit the program and from the master located in Belgrade broadcast program segments, shows, and commercials and act as local broadcasters although they do not have a RBA license. Cross-border channels pay nothing, Serbian laws do not apply to them (the Broadcasting, Information, Advertising, and Gaming Law) and they are located outside of the legal, fiscal and tax systems of Serbia.

According to estimates, more than 30 of these channels today broadcast unauthorized advertising blocks of local companies. This money, instead of being directed towards domestic, legal broadcasters, is paid to foreign accounts (the state is left without VAT), or payments between advertisers and TV channels are carried out illegally, in cash. Enormous amounts are in question, and according to some estimates, more than 30 percent of the total marketing budget for Serbian electronic media goes to accounts of cross-border channels whose headquarters are located abroad.

Zeljko Pantic, director of the "Danas" conference center, organized a conference "Cable TV operators and media freedom in Serbia". In an interview for our newspaper, Pantic reminded us of the long-standing problem between SBB and Telekom Serbia. Telekom Serbia`s Arena Sport channels are not offered by SBB cable operator because SBB has its own sports channel Sport Club. This was one of the key reasons why Arena Sport ended up being one of the biggest losers in the Telekom Serbia system, after it paid millions of Euros for rights to various sports events.

- Cable operators who supply an analogue signal, technically cannot have more than 70 channels in their offer. This means that a large number of television stations cannot enter the list of channels that are broadcast in the network. On the other hand, there are no clear criteria for this. This problem does not exist for those providers that provide digital signal or IPTV services, as the number of channels can be unlimited - highlights Pantic.

Earlier there was a strict territorial division, especially in Belgrade, determining which operator covers what part of the city. The operator who was the first to provide services to a building remained the only one. Rarely were there two operators, and three or four do not exist anywhere. That was the situation until the arrival of IPTV services that disrupted this monopoly that has existed since the nineties.

- We have two local government operators - Telekom and the Postal Services. On the other hand, there are private operators, with SBB as the leader and the giant, backed by a large multinational corporation. As for foreign operators, there is IKOM, but it is losing its market position. It is likely that there will be a markets consolidation and the formation of three major blocks: Telecom, Postal Services and SBB. This situation opens endless possibilities for abuse because these three operators have the ability to put on and take off TV channels at will, which creates a framework for censorship and self-censorship not seen even in communism. One can, by pressing a button, remove a television channel, on the pretext that it does not fit business interests of cable operators - warns Pantic.

He added that, according to the current AGB Nielsen data, 60 percent of households watch only cable TV, and if a channel is removed from the cable, two-thirds of the population cannot watch it.

- The solution is to prescribe by law the right to broadcast on cable networks, and when someone gets the right to broadcast on cable, no operator can take it off - said Zeljko Pantic.

SBB DOMINATION

According to RATEL data, during 2012 in Serbia (excluding Kosovo) there were 94 registered cable operators who provide their services in one of the described methods (KDS, DTH or IPTV) . During 2012 RATEL has conducted market analysis in order to assess the degree of competitiveness. Serbia Broadband - Serbian cable networks (SBB) was determined to be an operator with a significant market share. In accordance with the law, price control was imposed on it, accompanied with the obligation to keep the cost accounting. The number of registered subscribers is 1.44 million.

According to this data, the most significant operators in Serbia are: SBB, with a market share of more than 50 percent, the JPTT Company (6.72 percent), Telekom Serbia (12.9 percent), Kopernikus (6.1 percent) and IKOM (5.05 percent), with other operators individually holding a share of below three percent. The most important operators, SBB and IKOM, have dominant foreign share in the company capital.