Market Insight

Cyfrowy Polsat to launch mobile television

March 16, 2012  | Subscribers Only

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Poland's largest pay TV platform, Cyfrowy Polsat (CP), is planning to launch a mobile television service, branded TV Mobilna, in June. The operator will also start bundling its TV service with mobile telephony from one of country's largest networks, Polkomtel, recently acquired by CP's major shareholder Solorz-Zak. TV Mobilna, is planned to offer eight pay TV and 12 radio channels.

CP has not revealed the pay channel line-up. While the operator does not rule out the possibility of broadcasting foreign channels, it is required to provide channels with at least 33 per cent of content produced in Poland. The service will be available on iOS or Android-compatible mobile phones, tablets and laptops. A mobile decoder (produced by Valups) will be also needed to watch the channels; in addition to 'TV Mobilna', it will make available all free-to-air DTT channels (currently 18). CP holds the licence for DVB-H frequencies via INFO-TV-FM, a company which it bought in January 2012. Initially, the service will be available in 31 big cities covering about five million households (one third of total TV homes).CP will also launch a DVB-T decoder enabling reception of all TV Mobilna's channels on a TV set at home. The decoder will also provide an option to watch content from internet video service ipla, which has been recently - as a result of the Polsat group's restructuring - acquired by CP for PLN150m (€36m) from companies controlled by Solorz-Zak.

CP will also launch a joint offer with mobile operator Polkomtel, providing TV and mobile telephony bundles. Polkomtel's subscribers will also be offered TV services from CP. The service from Polkomtel will replace its current mobile telephony service, which CP provides as an MVNO, and CP's mobile telephony subscribers (140,000 YE 2011) will be moved to Polkomtel's network. CP will also continue developing its own LTE mobile Internet offered in co-operation with an operator Mobyland.

Polsat's other plans for 2012 include lunching a new channel in autumn and closing Polsat Futbol. The group decided to keep only two sport channels: Polsat Sport and Polsat Sport Extra (both in HD) and sport news channel Polsat Sport News. Polsat Sport Extra will launch in an HD version in June. CP ended 2011 with 3.551m subscribers, making PLN2.38bn (€575m) revenues and net profit of PLN160m (€39m) (both results include Polsat channels). At the end of 2011, Polkomtel had about 14m subscribers.

Poland's pay TV market is close to saturation, with multichannel penetration exceeding 90 per cent of total households at the end of last year.  With DTT coverage increasing and analogue switch-off set for mid-2013, prospects for further growth in satellite appear limited.

N's partnership with incumbent TPSA, TPSA's withdrawal from pay TV market to focus on telecommunications market, and N's subsequent decision to merge with Cyfra Plus, are examples of  strategies which Poland's satellite players have chosen to increase ARPU figures, strengthen their competitiveness, and also improve their financial results.

On the one hand CP's strategy is based on providing telecommunications services, which are rapidly becoming a 'must' on highly competitive Polish pay TV market (N provides telecommunications services in partnership with TPSA). CP launched mobile telephony already in 2008 (as an MVNO), which was complemented in 2010 by mobile Internet; on the other hand, with mobile TV CP enters a new platform, extending its presence in the market and finding a way to increase ARPU figures as well as subscriber numbers. The group's restructuring, which started last year with the acquisition of the Polsat free-to-air business, should also help improve financials.

A new player, which will emerge from Cyfra Plus and N merger certainly will maintain its advantage in premium content over CP and also of fast Internet without download limits (as in case of mobile Internet), still targeting a high-end market. CP will continue providing pay TV service for mid-end sector, strengthening its on demand offer with ipla service.Polkomtel's subscribers will present for an opportunity for further pay TV subscriber base growth. With a better coverage of its DVB-T/H offer and attractive content CP could also start competing with Telewizja Na Karte (N's sister company) in the low budget market sector; more likely, however, as there are no plans about extending TV Mobilna's reach, it will become a complementary service on top of CP's satellite pay TV.


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