The move is surprising and will redefine the TV services market because the operator has hundreds of millions of euros to spend on investments from the profits made so far and a strong retail network.
“One of the most important moves in audio and TV retransmission market in the last five years,” Orange’s step “will probably be a major challenge for the market leaders – RCS&RDS, UPC and Romtelecom,” writes Valentin Mircea, vice-president of the Competition Council on his blog.
The TV services market amounts to EUR370 million a year as its 5.9 million subscribers pay a little over EUR5 per month on the average.
The companies in this industry are RCS&RDS, with almost EUR190 million revenue from cable and DTH services (Digi), Romtelecom – with cable and DTH (Dolce) revenue of about EUR78 million and UPC with cable and DTH (Focus Sat) revenue of about EUR80 million. The three companies account for more than 90% of the market.
The TV services market, on which Romania’s mobile telephony market leader Orange is getting ready to enter with a DTH package, accounts for a little more than 10% of the annual revenue of the telecom industry and is one of the most fiercely competitive, with three competitors – RCS&RDS, Romtelecom and UPC, vying over almost 90% of the customers.
Orange has not officially admitted it would launch TV services, but did file for approval for DTH broadcasting from the national broadcasting regulator.
How will the local TV and communications services market change once Orange enters DTH service business?
“In its position as a mobile communications service provider, Orange could also provide multi-play – phone, Internet, TV, services. It may be that the Romanian consumers’ preference for multi-play type packages was exactly what made Orange introduce TV services,” Valentin Mircea says.
With the addition of TV services, Orange will be able to provide a broader range of services, lacking only fixed Internet to match the consumer offers of RCS&RDS, Romtelecom/Cosmote and possibly UPC, if it decides to add mobile communications, as well.
With a strong phone and mobile Internet network, a wide retail network and an online platform that allows customers to manage their accounts and order new services, Orange can push packages that include TV services to its about four million post-paid users and also the about six million pre-paid users.
Vodafone, the second largest mobile telephony company by revenue and customer numbers in Romania has not shown any interest in the TV market, other than by partnering with Seenow, which lets users access live TV and a selection of movies and TV series. The group did look into buying landline communications companies in Europe.
(English version by Loredana Fratila-Cristescu)