Market Insight

Orange to launch satellite TV platform in Romania

May 22, 2013

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France Telecom-owned Orange has been awarded a licence to operate a satellite TV platform in Romania by the Romanian National Broadcasting Council.

The service, using the Orange brand name, is expected to launch this year with an offer of 100 TV channels including 29 in high definition.

According to local sources, Orange has signed a deal with SES Astra to provide capacity for the new service.

Orange is Romania's largest mobile telephony operator, with 10.2m subscribers at the end of Q1.

Currently the Romanian pay TV market is near saturation with over 80 per cent of homes receiving pay TV. DTT has not yet launched, but the multichannel penetration is already about 90 per cent of total households.The market is dominated by three large players: UPC, which owns satellite and cable TV platforms, RCS&RDS, providing satellite TV, cable and mobile telephony; and OTE-owned incumbent telco Romtelecom, also offering satellite, cable and IPTV services, as well as mobile telephony.

With a fierce competition and the purchasing power indicators low, price remains the major driver of the market, which makes the ARPU figures among the lowest in the region.

The number of channels planned to broadcast by the new satellite TV service, and the relatively high number of HD channels (the other players have typically 10-15) may suggest that Orange intends to position its TV service in the high-end sector of the market, possibly trying to attract subscribers with a number of premium channels, and additional services like VoD, or multiscreen.

Such a strategy may look quite reasonable on the market with other players focusing on providing low-cost TV services. However, the existing TV services already provide a number of premium channels (HBO, Cinemax, Viasat, as well as RCS&RDS-owned Digi Sport and Romtelecom's Dolce Sport). Moreover, rights for the major sport events such as the Romanian Premier Football League, the Champions League and Europa League, are tied up by pay TV platforms or free-to-air broadcasters. The portfolios of RCS&RDS and Romtelecom include a number of their own thematic channels (film, news, sport, documentary). With RCS&RDS selling its Croatian and Slovak operations, it can be expected to strengthen its position on the Romanian market by extending its channel line-up and launching new services.

It is therefore hard to say what new premium content the Orange platform can offer. It will be also very difficult for the new TV player to compete with the existing platforms on price. The TV service will likely be bundled with mobile telephony, but RCS&RDS already does so and Romtelecom may be expected to start it in the near future. Overall, by launching a satellite TV platform Orange primarily wants to strengthen its position in the mobile market, where it already has to faces strong competition from the pay TV players, RCS&RDS and Romtelecom, with the TV service helping it to lower churn figures and possibly also to increase its ARPUs.

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