In the view of Humberto García, general secretary of TEPAL, the Panamabased pan-regional TV association, “In Argentina, regulators will not allow Telcos to buy up cable TV companies and create monopolies or duopolies, as was the case in Mexico, Colombia and Brazil.” Challenges in Argentina exist on the content side, as well. Last month, TV networks couldn’t broadcast telenovelas or series due to a strike by the Asociación Argentina de Actores — the actors’ union — against producers, represented by the Cámara Argentina de Productores Independientes de Televisión (CAPIT), and the broadcasters, grouped under the Asociación de Teleradiodifusoras Argentinas. The actors asked for an increase in salary and a shorter workday. After a five-day strike, the actors accepted the proposal offered by the TV channels and production companies, which included a minimum salary of 6,300 pesos (U.S.$2,000) per month. Despite the agreement, tension between the actors’ union and the producers continued because CAPIT added the use of product placement (Publicidad No Tradicional) into the mix — despite the fact that the federal government has not yet approved this practice. Uruguay: Offers Mobile TV At present, Uruguay produces a small amount of local content. “There is little national production, and we buy a lot of canned content,” said María Fernanda López, programming director at Latinoamérica Televisión. She continued: “The TV stations are trying to change this situation, but the fact remains that buying content abroad requires a lower investment.” In the pay-TV sector, consumer penetration is 56 percent (more than one million subscribers), and the use of broadband is mostly limited to telephone service. Telcos are now in a great position to develop Triple Play, since the regulatory framework doesn’t currently allow it to cable operators. But in order to be ready should the law change, the “Independent cable operators are now in the midst of digitizing their services,” said Horacio Rodriguez, an executive with the cable association, CUTA. Last June, Uruguay’s telephone operator, ANCEL, launched mobile TV over its G3 (third-generation) network. Although its cost is high at 800 Uruguayan pesos (U.S.$36) per month per subscriber, the service was well received. “We are the first operator in Uruguay offering mobile TV,” explained Jorge Suarez, marketing manager of ANCEL. “The offer is comprised of free local channels, as well as some international TV channels such as CNN Español, Cartoon Network and Bloomberg. We also offer premium content channels with high monthly costs, depending on what package users choose.” Chile: Duopolistic Pay-TV Market Pay-TV came to Chile in 1980 and many companies began offering it. In 1990, pay-TV provider VTR started merging with other companies providing the service. By 2005, VTR controlled 80 percent of the market. Similarly, after merging with its competitor, Metropolis Intercom SA, Telefonica soon became the second largest pay-TV provider in the country. Today, Telefonica offers combined packages of television, Internet and telephone. The pay-TV service is 80 percent provided by cable television and broadband, with the remaining 20 percent by satellite. For cable and satellite, VTR’s market share is 76 percent, followed by Telefonica, which continues to grow. For telephone service, Telefonica is dominant, with 70 percent penetration, while VTR reaches 12 percent (or 400,000 telephone homes) since it started offering Triple Play. Chile has still not chosen a standard for digital terrestrial broadcasting, nevertheless, VTR offers high-definition TV on a special digital channel. By acquiring satellite company ZAP TV, Telmex, the Mexican telecommunications giant, entered the Chilean market with wireless Triple Play services, which included digital television, Internet broadband and telephony. With this purchase, Telmex positioned itself as a global pioneer, commercializing the wireless Triple Play sector. Paraguay: High Piracy Rates Paraguay is facing an economic recession that has slowed the growth of the TV industry. Today, cable television is considered a luxury. There are five free, over-the-air TV channels, and a single company provides Internet service. Still, “People are looking for ways to access cable TV services without paying,” complained Solange Rasmusen of Video Cable Continental. He then explained: “It costs almost [U.S.$40] per connection, plus a monthly subscription fee. [Unfortunately], piracy is very difficult to fight. The most one can do is take a photo of the house of the illegal subscriber and try to intimidate the pirate into paying. We need to create fear.” Cable theft is high — for every legitimate subscriber there are four hackers. Explained Gabriel Carballo, general manager of Red Multicable: “The ideal is to offer Triple Play, but it is unlikely to happen until basic telephony remains in the hands of the state.” Venezuela: Upgrading To “Triple Play” Stimulated by the income generated by high oil prices, Venezuela is in a period of uninterrupted consumer growth. Roberto Campos, executive vp of Intercable Venezuela, said that the future of cable in his country involves Triple Play packages similar to those offered by Chilean operators. “Our strategy is to compete by offering very low rates. We have to cater to the customer who buys three products, and we expect that with this service, customers will be more loyal.” Bolivia: Still Without Satellite Television Cable TV came to Bolivia in the year 2000, and there are now seven operators (two of them also provide broadband Internet services). The country also has 60 free-to-air TV channels — but no satellite television. Cable operators offer between 80 and 90 TV channels for about U.S.$20 per month. Peru: Looking to Promote Convergence In 2006, the number of broadband connections in Peru grew by 30 percent as compared to 2005. The country has two major cable operators: Telmex, with 25,000 subscribers and Star Global with 12,000, plus DirecTV with 29,000. There are also independent cable companies, which, cumulatively, have 140,000 subscribers. In June, Telmex acquired cable TV company Virtecom, which had 102,000 subscribers. Earlier, it had acquired Boga Communications, which controlled four percent of the market. Mauritius Escobedo, general manager of Telmex Peru, said that, “With these acquisitions we are entering into the delivery of digital services, offering voice, data, Internet and video.” The company also operates mobile phone company Claro (which has a 36.7 percent market share). Colombia: The New Players During the past year, Colombia experienced some intense pay-TV competition. In April, Telmex bought cable operators Colombia Cablecentro (with 325,000 subscribers) and Satelcaribe (which operates in 15 Colombian cities), both of which offered subscription television services and Internet access. In addition, Telmex acquired 100 percent of Ecuador-based Ecutel, a company that provides telecommunications services to customers in Colombia’s corporate world. For the development of digital cable and broadband television, Telmex and Telefonica are investing the equivalent of U.S.$340 million between them, while Empresas Públicas de Medellín is investing $13 million. It is expected that this year, the networks’ digitalization will finally be completed, thus increasing the number of channels offered. Because Colombia allows free entry into local telephone markets, by 2011 more companies (both foreign and domestic) are expected to be providing cable TV. V I D E O • A G E JA N U A R Y 2 0 0 8 (Continued from Cover) 38 Broadband Challenges ATVC’s Walter Burzaco María Fernanda López, of Latinoamérica Televisión.
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