[Satellite News 08-30-10] Polish DTH operator Cyfrowy Polsat is not resting on the laurels of its recent achievements in the competitive Central European markets. Despite ending June with more than 3.2 million subscribers and adding more than 400,000 subscribers in Poland over the last year, Polsat CEO Dominik Libicki believes Polsat needs to offer more services than just satellite pay-TV.
    Libicki told Satellite News that Polsat is near the end of a transformation after launching a new multi-play offer enabling customers to purchase television, broadband and mobile telephony services under a single contract in June. The operator also plans to launch another telephony service later in the year.

Libicki: The triple-play package was in line with the strategy we announced during our debut on the Warsaw Stock Exchange to build a multi-play operator, offering several services within a single contract and one subscription fee. In 2008, we made the first steps in this direction, launching mobile services based on the MVNO model.
    In the fourth quarter of this year, we plan to complete the range with home telephony services based on a radio network. We believe that multi-play services will not only enhance the attractiveness of our offer and will help to increase ARPU of customers choosing the triple-play service, but also will result in a fall of the churn rate and an increase in the total revenue, as confirmed by the experience of other companies in international markets. This year will be a breakthrough for us because as the first satellite platform in Poland, we will transform from a television provider in a provider of integrated services.

Libicki: We believe that multi-play services will meet the interest of our customers. As we are the market leader present in 3.2 million homes with the television service, we have a large potential market to sell telecoms services which we want to offer to our current subscribers.
 

Libicki: We do not have confidence in the push VoD model. There is no example that we know of in the world where this type of VoD service has been financially successful, so we have prepared a near VoD project called VoD Home Movie Rental, which is fundamentally different from what other players do. We bought a transponder and devoted 15 satellite channels to rapidly rotating titles, mostly movies, to which the subscriber has access in close intervals (every half hour, every hour).
    The advantage of this solution is the fact that all our customers are able to benefit from this service, so 3.2 million subscribers and [700,000] users of Cyfrowy Polsat set-top box receiving FTA channels, which means 3.9 million households. Therefore, you do not have to be our direct subscriber. As long as you have a Cyfrowy Polsat set-top box, you can access this service.
 

Libicki: According to official data, saturation of pay television in Poland is about 70 percent today. According to my estimation, saturation of pay television in Poland should reach about 80 percent. According to our forecasts, approximately 15 percent of households use the services of at least two operators, which increases the potential market. Over the next few years, pay-TV will be chosen by about 1.5 million households. It can be assumed that, as it was in recent years, most of them will choose a digital platform.
 

Libicki: We took part in a test conducted by Info TV FM. Our interest in mobile TV will be a derivative of its quality and expectations of potential customers, but we have not made any binding decisions in this area yet.
 

Libicki: In Poland, there is still plenty of room for further development of HD technology, so the anticipation of the introduction of 3-D may be premature. For me, it seems like there are too many questions at the moment to transfer this technology to domestic conditions on a mass scale, but it will certainly make its way to Polish homes over time.
 

 
Libicki: So far, IPTV has not attracted a significant number of customers. As for TP, a similarity is clearly visible in our strategies by adding Internet, and more recently, television to the provided telephone services. Cyfrowy Polsat started as television provider and then expanded the portfolio with mobile services, and in February 2010 with the broadband Internet. So far, both companies focus on selling further services to their customer base in order to increase revenues and increase their subscriber loyalty.

Libicki: I cannot speak of a significant impact of the economic slowdown on our business in the area of operating activities. The number of subscribers to our services grew in line with our expectations. Pay television turned out to be a good alternative to other entertainment forms, which Poles may have had to give up in times of economic downturn. However, in the financial area, the weakening of our currency against the euro and the U.S. dollar had a negative impact on certain cost categories, such as an increase in the programming costs, lease of transponders, purchase of set-top boxes. However, looking at our business after excluding the impact of these factors, we can safely say that it has healthy and stable basis for development.
 

Libicki: I have repeatedly stressed that consolidation would certainly be healthier, both from the point of the interests of operators, in terms of cheaper rights, and viewers due to comprehensive offers and attractive prices. However, from what I know, there are currently no talks concerning consolidation.