MTS is using the ABS 2 satellite to broadcast 160 channels to 95 percent of Russia. Photo: SSL

[Via Satellite 12-04-2014] Mobile Telesystems (MTS), a major telecommunications company in Russia and the Commonwealth of Independent States (CIS), has decided to launch a satellite pay-TV service with 160 channels. The company has leased capacity from Asia Broadcast Satellite’s ABS 2 satellite, covering 95 percent of Russia’s territory. Broadcasts will begin this month in partnership with MTS’ parent company Sistema Mass Media (SMM). Vitaly Studitskikh, MTS director for satellite TV and CEO of SMM subsidiary TSTV, said that the vision to expand into satellite is now coming to fruition after being planned for several months.

“According to the estimates of J’Son & Partners, a telecom consultancy, satellite TV subscriber base is growing at roughly 15 percent per annum, which makes satellite one of the fastest growing segments of pay TV in Russia. In ruble terms, market is expected to grow by 40 percent until 2018 to reach over RUB 31 billion [$570 million],” Studitskikh told Via Satellite.

In Russia, MTS has 4,100 retail stores and more than 73 million mobile subscribers. Today the company has more than 2.5 million pay-TV customers, serving 253 population centers. The upcoming satellite service will focus on reaching areas not accessed by cable. Studitskikh expressed enthusiasm at the reception of new Set-Top-Boxes (STBs) that MTS anticipates will give the company a competitive edge.

“The most important attribute is the innovative set-top-box which, for the first time in Russia, will provide satellite customers with a personalized TV experience,” he explained. “Each STB comes with a built-in 3G modem which gives access to a variety of value-added services, access to online and payments services, social networks, as well as time shift, catch-up, video-over-demand, etc.”

Studitskikh said MTS’ fixed-line residential Average Revenue Per User (ARPU), which though not specific to pay TV, does include it as well as broadband, grew by 6 percent year over year in the third quarter of 2014. He attributed part of this growth to subscriber migration from analogue to digital television. MTS has also been increasing its subscriber base by upselling customers to double play and triple play products.

To continue fueling revenues from modernization, MTS is investing $2 billion to cover Moscow with Gigabit-capable Passive Optical Networks (GPON) by the end of the year. Studitskikh said the company has already seen a boost in ARPU from customers migrating away from Asymmetric Digital Subscriber Line (ADSL) to GPON.

All of MTS’ satellite TV will be broadcast in Digital Video Standard Second Generation (DVB-S2), with 30 broadcast in High Definition (HD). Studitskikh noted an increase in demand for high quality broadcasts, potentially paving the way for Ultra-HD in the future.

“We have tested Ultra-HD technology and we have ample capacity to transmit Ultra-HD content,” he said. “At this stage there’s a limited choice of STBs and TV sets which support Ultra-HD, but when more devices come to market we will consider enhancing our offering to encompass Ultra-HD.”

SMM is providing licenses for MTS’ satellite TV broadcasting and ensuring the leasing of satellite channels. MTS is responsible for managing the project, including ground infrastructure, securing content, marketing, billing and customer service. The vast geographic size of Russia and limited fixed-line and mobile coverage helped justify the decision to pursue satellite TV broadcasts that will quickly reach most of the nation. Studitskikh said MTS aims to become one of the leading satellite providers in Russia by 2018.