The Romanian pay-TV market has reached saturation point and operators face an uncertain future unless they can find a way to raise prices and therefore ARPU, according to Radu Petric, president of the Romanian Cable Communications Association.
Petric told delegates to Informa Telecoms & MediaÂs Digital TV Central and Eastern Europe conference in Bucharest that the highly competitive nature of the Romanian market, where five DTH providers compete with each other and with a fragmented cable industry, meant that service providers had little room for manoeuvre in terms of varying their offerings or raising ARPU through price hikes. Petric, speaking on a panel session on the first day of the conference, said that DTH players had undercut already very low basic cable subscription rates with basic services priced at under Â4 a month, and that aggressive pricing was ÂpoisoningÂ the business.
In recent years, RomaniaÂs DTH providers, led by RCS & RDS Â also a leading cable operator Â have competed aggressively on price, a strategy that RCS & RDS has now taken to neighbouring markets in the region.
ÂSomeone will have to rethink strategy away from a price war without aim,Â said Petric. He told delegates that premium services attracted only about 8% of the overall pay-TV subscriber base. ÂThe most complex DTH operation with the most thematic packages is going bust Â exclusive content doesnÂt work,Â he said. There was now a high risk of the same price-cutting strategy emerging as the dominant theme in the marketing of high-speed internet services, he added. ÂThe land grab has to stop because there is no land left to grab.Â
The failure of operators to raise ARPU meant that there was little opportunity to develop new services to improve customer service. The countryÂs leading broadcasters are providing HD versions of their channels for free, meaning that cable operators have been tempted to pass on the HD DVB-T signal via their cable networks rather than develop their own HD cable service. However, said Petric, Romanian subscribers had effectively voted with their wallets for a low-cost service at the expense of improved quality. ÂCustomers have voted with their dollars for the cheapest service without much customer care,Â he said.Â
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