TVK Vectra expansion to build on subscriber base
Telewizja Kablowa Vectra (TVK Vectra) (http://www.vectra.pl), a Gdynia-based cable operator, is looking to increase its customer base to 1.5 million people in the next few years, up from the current 347,000, said company president Tomasz Wegrzynski last week.
TVK Vectra's goal is to provide new services through its cable network, including Internet access, video on demand (VOD), high-density TV (HDTV) and virtual private network (VPN). This year, the company will spend zl. 45 million ($11.3 million) on modernizing its cable network to provide for two-way transmission, up from last year's figure of zl. 12 million ($3 million).
To help finance the investment, TVK Vectra struck a deal with Bank Rozwoju Eksportu (BRE) and four BRE-managed investment funds in 2000. The funds acquired 26% of cable.com, a company started by TVK Vectra, for zl. 130 million ($32.5 million). Wegrzynski said the company may issue bonds if it needs more cash.
Through a series of mergers and acquisitions last year, the company created a cable company consisting of 54 smaller networks. TVK Vectra plans to continue its expansion this year. "Over the past six months we've gained 77,000 new subscribers," said Piotr Medon, chairman of TVK Vectra's supervisory board.
"We'll focus on regions where we're already present (northern, central and southwestern Poland)," Wegrzynski said. "You can't avoid consolidation. If we want to be on the top we have to adjust to this trend."
Wegrzynski declined to say how much TVK Vectra would have to pay for the acquisitions. "Prices are always based on market conditions," he said. "We pay good prices, but we withdraw from tenders if a specific market is too expensive."
Wegrzynski said TVK Vectra should wrap up the consolidation process within the next 12-18 months. "We should reach 1 million subscribers," he said. "What'll be left on the market is, above all, small networks with 500 subscribers and we're not interested in them."
Today, the only cable operator with 1 million subscribers is UPC Telewizja Kablowa, formerly Polska Telewizja Kablowa, which was purchased with Wizja TV (http://www.wizjatv.com.pl) by Amsterdam-based United Pan-Europe Communications from @Entertainment.
The parliamentary culture and media committee last week unanimously recommended the Sejm (http://www.sejm.gov.pl) to reject, in the first reading, a draft amendment to the radio and television bill. Paradoxically, the committee's motion may speed up work on the draft with just two months to go before the general elections.
"The committee's motion means that the draft will be read at the Sejm's meeting straight away and it can be voted on too," said Tomasz Welnicki, Solidarity Election Action (AWS) MP and deputy head of the Culture and Media Committee. Conversely, if the draft had been accepted by the committee, it would have been left for further review and possibly not reach the Sejm before the end of its term, he said.
In May, deputies from the Civic Platform (PO), the National Conservative Alliance (SKL) and AWS submitted a draft amendment to the radio and television bill aimed at making public media accessible to wireless operators. The draft states that the current law ignores newer technologies such as digital platforms.
Under the proposed legislation, public television and radio will be available to all operators, including wireless operators, that are willing to include them in their programming packages, although they will have to cover transmission costs and pay royalty fees. The proposed legislation may also end an ongoing dispute between public broadcaster Telewizja Polska's (TVP) managing board and both the Wizja TV digital platform and private television station Polsat. The two companies are transmitting TVP's programming without its consent.
The new management of Ruch (http://www.ruch.com.pl), Poland's largest state-owned press distributor, last week announced a five-year, zl. 350-million ($87.5 million) development strategy.
Miroslawa Nykiel, Ruch's president, said that if the treasury fails to go ahead with the company's planned privatization, Ruch may issue bonds or use credit lines to finance its development. The press distributor, which operates 34,000 outlets, plans to increase its market share from 57% to 62% within the next five years and open 30 outlets annually.
Nykiel declined to say how many of Ruch's outlets are generating losses. "The last evaluation we had was in 1995; there hasn't been a recent evaluation so I can't provide one," she said.
Ruch earned zl. 5.7 million ($1.4 million) in profit during the first five months of this year. This compares to an expected net result of zl. 16 million ($4 million) for all of 2001 just 75% of last year's figure.
Ruch's privatization has been dogged by a legal battle that began after the planned sale of 40% of the company to French firm Hachette was canceled by the treasury. In 1997, Hachette sued the government and the matter has been tied up in court ever since. Meanwhile, Ruch's competitor on the distribution market, Kielce-based Kolporter, has informed the Treasury Ministry that it might be interested in Ruch. Kolporter, set up in 1990, has a 27% market share. The company saw a profit last year of zl. 6 million ($1.5 million) on revenue of zl. 636 million ($159 million). "To arrange financing for the deal (buying into Ruch) shouldn't be a problem for the company," said Maciej Topolski, spokesman for Kolporter.
