French operator chooses Eutelsat for merged digital platform

Canal+ announced last week that it had selected Paris-based Eutelsat as the satellite operator for the new digital platform created by the merger of Wizja TV and Cyfra+. Until now the two digital platforms, owned by Amsterdam-based United Pan-Europe Communications and Vivendi-controlled Canal+, had been using different operators. Wizja TV has a contract with Luxembourg-based SES Global and Cyfra+ has an agreement with Eutelsat. The latter, which last July transformed itself from an association of 48 national telecom operators into a private company, competed for the Polish contract with Luxembourg-based SES Global, an international satellite operator. Giuliano Beretta, the chief executive officer of Eutelsat, said at the company's annual press conference in Paris last week that even though the negotiations were tough, he wasn't surprised by Canal+'s decision. "It didn't come like a Christmas present," he said. "We were first to come to Poland so it was extremely important to keep our market there. I didn't want to give it up." Eutelsat's Polish operations include the satellite transmission of private TV stations Polsat, TV4, TVN, TVN24, and public broadcaster Telewizja Polska (TVP). It also digitally transmits Cyfra+ and Polsat 2 Cyfrowy. For its part, SES Global, whose Polish representative is Astra Marketing, has so far served the Wizja TV digital platform and TV Puls. Last year, due to the acquisition of General Electric's GE Americom satellite division, SES was able to increase its reach and now covers Europe, North and South America, and Asia. "Of course, in practice a deal like that doesn't work without the sacrifice of something in other markets," Beretta said. "I cannot tell you why, but it was tough for us. But like the French say Paris is worth a Mass, Poland is also worth it." While Beretta wouldn't say what Eutelsat did to win the Wizja TV/Cyfra+ contract, a source close to negotiations said the Paris-based company had renounced cancellation fees for contracts it had with Canal+ in Italy saving the firm a significant sum. "(Eutelsat) combined the situation on the Polish market with the situation on the Italian market," the source said. "There is going to be a merger of Tele+ and Stream in Italy (digital platforms), which means they are going to lose eight transponders that are in use today. For these transponders, they had long-term contracts and what Eutelsat decided to do was to renounce the cancellation fees on these Italian transponders in return for the contract in Poland." According to Beretta, the average price of a transponder is between €3.1 million-€3.8 million a year (not including distributors' fees), meaning that Eutelsat might have given up some €140 million in penalty fees in Italy to get the Polish contract. "SES's offer for the Polish market alone, with respect to price, was better than Eutelsat's, but since they combined it with the Italian market the difference was so great that SES couldn't come up with a comparable offer," the source said. And the Italian competition office's decision whether to approve the merger of Tele+ and Stream is "just a matter of days," according to Jean-Marie Messier, CEO of Vivendi Universal. Meanwhile, SES Global is putting on a brave face. "We regret this decision, but it's not a financial impact we are facing because we have contracts for the next seven years; it's a strategic impact," said Yves Feltes, press relations manager of SES. "We're clearly facing the loss of Polish language programming, which will make our program offer to the Polish market less attractive, but it doesn't mean we'll withdraw from Poland. We'll continue to work on promoting the ‘free-to-air' offer in Poland that is available on Astra, and we want to develop broadband data transmission via satellite." At the same time, the subscribers of Wizja TV and Cyfra+, who are still waiting for information about the combined platforms' programming, will be able to tune in starting next month. Initially, though, programming will be beamed via two satellites until antennas are adjusted to the single operator. "This operation will start in April and it won't cost subscribers a penny," said Małgorzata Babik, public relations director of Canal+ Polska. Frey on the move Rene Frey, the chief executive officer of TPP, a subsidiary of Sweden's Metro International Group and the publisher of Metropol, resigned, according to a company statement released last week. Frey had been in charge of Metropol, a free Warsaw daily, for the past 14 months. Frey refused to say why he left the newspaper. "I would stick to what's been said in the announcement," he said. "There will be no change to that decision." According to his statement, Frey couldn't reach a compromise with Metro International Group's management regarding Metropol's future in Poland. "I realized I wouldn't be able to develop Metropol the way I thought it would be the right (way to do)," the announcement said. But according to a source within Metropol International Group, Frey was fired due to mismanagement. He will be replaced by Joseph Kowalczyk, the source said. HBO to break into Bulgaria U.S. movie channel HBO plans to enter the Bulgarian market in April. The pay channel will be available 18 hours a day during the week and 24 hours a day on weekends. "We're happy that we'll be present on the Bulgarian market," said Phil Roter, chief executive officer of HBO in Central Europe.