Competition office gives go-ahead for digital platform merger plans
The Office for Competition and Consumer Protection (UOKiK) last week approved the merger of Poland's top two digital platforms, Wizja TV and Cyfra+.
"The merger will benefit subscribers as it will allow for a reduction of costs by the two operators of the platforms and that may lead to reduced costs for subscribers," the UOKiK said. "Additionally, the deal will facilitate access to new interactive TV services and will provide consumers with a variety of popular and attractive channels."
After the decision was made, Cyfra+ and Wizja TV announced that new programming for the merged platform would be ready by the end of the first quarter of 2002. "The new lineup, which will be a combination of channels available on the two platforms now, will (still) be broadcast via the Astra and Hotbird satellites until we choose a single operator," said Paulina Krasińska, press spokeswoman for Canal+ Polska. "The programming will be based on the results of surveys conducted among the subscribers of Wizja and Cyfra+."
Market sources said the merger should be finalized by the end of the second quarter of 2002, at which time Telewizyjna Korporacja Partycypacyjna (TKP) will begin operating the new platform.
The UOKiK had been evaluating the merger since it was inked in August between Amsterdam-based United Pan-Europe Communications (UPC), the owner of Wizja TV, and France's Vivendi Universal, owner of Cyfra+. Vivendi's Canal+ will own 75% of TKP. Under the deal, UPC, whose Polish operations include Wizja TV and cable network UPC Telewizja Kablowa, will turn its Polish satellite assets over to TKP in exchange for a 25% stake in the merged entity.
The merger is expected to solve nagging financial problems for both Wizja TV and Cyfra+, which combined will have some 700,000 subscribers - the minimum necessary to generate a profit, according to industry insiders.
In its statement, the UOKiK emphasized that three digital platforms - Polsat Cyfrowy being the third - would not make long-term economic sense in an average-sized market with strong cable TV networks. "For the good of the consumer, one shouldn't introduce artificial competition on a market where several players can't possibly survive," the report said. "A (merged entity) with a strengthened financial situation will be able to get involved in the production of Polish-language programs and movies and buy rights to much more attractive programs."
As the UOKiK considered its decision, the office received inquiries from program producers such as U.S. pay-TV channel HBO and London-based Zone Vision, a thematic-channel broadcaster and distributor, which expressed concern about their future on a merged platform. HBO had asked the UOKiK to guarantee its position on the merged platform before granting approval for the deal.
But according to the UOKiK's lawyers, HBO had no legal grounds for making such demands. "The new platform will have a dominant position on the satellite pay-TV market," said Andrzej Graduszyński, director of the UOKiK department in charge of investigating the merger. "But with that in mind we'll be able to intervene in accordance with the antimonopoly bill - if there are serious complaints from the market."
Anna Kocinska
