Russia ramps up move to digital TV

1 in 10 homes to have access by end of year

By NICK HOLDSWORTH

LONDON -- Almost one in ten Russian households - 4.7 million out of 49 million -- will have access to digital TV by the end of the year as the medium is rolled out by state and private operators, according to a report published Thursdayby the European Audiovisual Observatory.

The government plans to spend up to $15 billion over seven years upgrading terrestrial analog signals to digital although only some 100,000 people are able to tune into digital channels at the moment. They are part of an official DVB-T standard pilot project launched last year, the report "Towards Digital Television in the Russian Federation" said.

The 155-page report gives a detailed analysis of the rapid growth in alternative television and content platforms in Russia.

The Internet, TV and radio market grew by 25% last year to $63 billion, according to preliminary data from the Russian ministry of information technology and communications, and is likely to be worth $75 billion in 2008.

Commercial TV and Internet operators are investing heavily in modernizing telco networks: satellite TV services, which have 2.5 million subscribers in Russia, are already digital and 1 million (7.4% of total) cable subscribers can access digital channels.

Private investment in telco upgrades this year is estimated at some $4.2 billion, including "the investments of the largest and most noticeable players in the Russian market for broadband access," the report stated.

Investment by cable and regional broadband and triple play services could be as high as $4.5 billion in 2008.

The report, researched and written for the European Audiovisual Observatory -- a Strasbourg, France-based body that is part of the Council of Europe -- by Moscow's Groteck identifies a key conflict in the development of digital services.

The government's terrestrial-based model is more European compared to the commercial sector's American approach with a greater emphasis on satellite and cable services, fixed line and mobile telephony.

"A contradictory process of transition to digital television is not specific to Russia. In other European countries governments are pushing the transition towards terrestrial transmission to liberate the spectrum while industry players -- in particular broadcasting companies -- are more concerned with the immediate possibility of exploiting all possible networks to distribute the maximum number of channels to the most viewers," the report said.

It adds: "Having chosen the European standard for digital television, Russian market regulators now have to take into account the time constraints concerning Europe's transfer to digital broadcasting and also European approaches to the organization of digital broadcasting."