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Q&A: Dominik Libicki president, Cyfrowy Polsat

Digital TV Europe talked to the head of Europe’s fourth largest DTH pay TV provider about prospects for further growth.

What are your priorities for this year?

This year constitutes a breakthrough for us due to completing the acquisition of 100% of Telewizja Polsat. Now we are not only the largest satellite platform but also the leading media group in Poland, which creates, produces and distributes high-quality TV content to millions of Polish households. With 3.5 million pay TV subscribers, we are the fourth largest DTH platform in Europe. The priorities for Cyfrowy Polsat as a satellite platform are to maintain our strong position in pay TV and continue growth of our multi-play business by further increasing subscribers, ARPU and customer loyalty. As the owner of Telewizja Polsat, we wish to strengthen our position in the broadcast market by maintaining our position in audience and advertising market share, increasing reach and subscription revenues through our pay TV thematic channels as well as by the growth of our viewer profile. As a combined group, we will work on optimising combined group revenue and cost synergies.

How do you rate prospects for growth?

According to analysts’ calculations, penetration of pay TV in Poland with approximately 11 million subscribers stands at 72%. According to different sources, 10-20% of subscribers have paid for more than one pay TV subscription, so the potential of the market is even greater. In our assessment, pay TV will in the coming years be chosen by up to 1.5 million additional households. It can be assumed that most of them will choose satellite. According to our estimates, while DTH households grew between 2006-10 at a CAGR of 29%, cable TV households grew at only 2%. Through satellite TV, wireless broadband internet and mobile telephony, we are able to access less-densely populated areas of Poland at a significantly lower cost than cable and other fixed-line providers. We are the only DTH operator in Poland that provides broadband internet and mobile telephony services as a multi-play offer. We believe that we will be able to leverage the strength of the Cyfrowy Polsat brand and our large DTH subscriber base to expand sales of our broadband internet and mobile telephony services. Additionally, the broadband market’s relatively low penetration and strong growth potential makes it an attractive market for development. This is the reason for our engagement in providing the newest broadband technologies – HSPA Plus internet access and LTE 1800MHz services with high data speed and capacity.

We are the only DTH operator…that provides broadband internet and mobile telephony services as a multi-play offer.

How will your multi-play offer develop?

We believe that multi-play will not only enhance  our offer and help to increase ARPU of customers choosing the triple-play service, but will result in maintaining a low churn rate and an increase in total revenue. Thanks to our position as the market leader providing TV to approximately 25% of Polish homes, we have a large potential market for telecom services. Penetration of multi-play in Poland is behind the average for Europe. This is behind our investment in LTE, as the first operator in Poland and one of the first in Europe. We have since March 16 been conducting tests of LTE on a group of 2,000 users and plan to offer it commercially within the second half of this year.

What services could give higher ARPU?

Recognizing needs of our existing clients, we are able to offer them tailor-made telecommunication services at competitive prices. We are also very pleased to see a growing interest in the near-VOD service, Home Video Rental, which we offered to our viewers in December 2009. Our library provides subscribers with access to the titles of some of the largest content providers – Disney, Sony, Monolith Films and SPI. As an additional way to increase ARPU, we have developed a programming offer on the internet. We have in March launched catch-up TV at www.cyfrowypolsat.pl and wish to subsequently introduce online PPV and VOD services on top of similar satellite services.

Is your programming offering right?

The structure of our programming offer is at the present time optimal. We supply viewers with all the popular, high-quality channels at a good price. We managed to build the core of our offer while the newly launched channels provide it with added value. We have sold our own channels to the Cyfra Plus and ‘n’ platforms but left our sport channels – Polsat Sport, Polsat Sport HD, Polsat Sport Extra, Polsat Futbol – exclusively on Cyfrowy Polsat.

How likely is consolidation?

I have repeatedly stressed that consolidation would certainly be healthier, both from the point of the interests of operators – less expensive broadcast rights – and clients – a comprehensive offer, attractive price. However, from what I know, there are currently no talks concerning significant consolidation. In terms of potential consolidation, I can see Cyfrowy Polsat as the key player in the process.


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