Digital TV development in Eastern European countries: Lithuanian experience
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1 Digital TV development in Eastern European countries: Lithuanian experience Tomas Lamanauskas Deputy Director Communications Regulatory Authority European Forum for Mobile TV 2006 Page 1
2 Outline of the presentation TV broadcasting in Lithuania: long path of evolution Outlook to the market Regulatory measures Challenges to digital TV development Ways to overcome the challenges Role of regulator Considering possible means to DVB-T encouragement European Forum for Mobile TV 2006 Page 2
3 TV broadcasting in Lithuania: long path of evolution: outlook to the market First TV transmissions Colour TV broadcasting Cable TV network deployed Commercial TV started Radio programs via Internet Digital Satellite TV Pilot Digital Terrestrial TV transmission in Vilnius by 53 rd TV channel transmitter TV programs via Internet Digital Cable TV, MMDS Pilot TV via mobile (GSM/UMTS) phone Pilot Digital TV broadcasting promotional project in Vilnius trolleybuses Live mobile TV (GSM/UMTS) broadcasting Contest for DVB-T networks Full launch in Vilnius and 40 km around Issued DVB-T broadcasting and rebroadcasting licenses DVB-T networks in 5 biggest cities Beginning of analogue TV turn-off At least one DVB-T network coverage - 95 % of territory European Forum for Mobile TV 2006 Page 3
4 TV broadcasting in Lithuania: long path of evolution: outlook to the market Beginning - 30 analogue TV sets April First television transmission about 30 TV sets in Lithuania. End already 1.5 thousand TV sets % of households had colour TV set. Public TV 2 national terrestrial analogue TV channels. 1Q % of households were cable TV and MMDS subscribers. Vision for 2012 Almost every household will be able to use digital TV, of which > households (about 30%) use DVB-T Aim - > 98% of households equipped with digital TV (DVB-T, DVB-C, DVB-S, IPTV) European Forum for Mobile TV 2006 Page 4
5 TV broadcasting in Lithuania: long path of evolution: outlook to the market Competition aspects in broadcasting market (1) Radio TV Cable TV MMDS Dynamics of the number of participants in the broadcasting market, Source: Radio and Television Commission of Lithuania ,9 162,8 198,2 225,8 226,3 234,5 35,0 239,5 36,0 253,8 31,1 295,5 34, Cable T V MMDS Cable TV and MMDS subscribers number dynamics, thousand Source: Communications Regulatory Authority. As of the end of 2005, 71 cable TV and 5 MMDS networks were operated in Lithuania. In 2005 the number of cable TV subscribers grew more than 16 per cent (average growth of cable TV subscribers was 12 per cent), the number of MMDS subscribers grew by 12 per cent. Data on number of digital TV subscribers was not collectible for the meantime. European Forum for Mobile TV 2006 Page 5
6 TV broadcasting in Lithuania: long path of evolution: outlook to the market Competition aspects in broadcasting market (2) 80 69,5 73,7 TV3 25, ,9 48,3 57,7 LNK LTV 13,0 24, The revenues of all broadcasters and rebroadcasters in , EUR million Source: Radio and Television Commission of Lithuania. BTV PBK 4,7 9, The most popular TV programs in Lithuania (per cent of the watched time), 2005 Source: TNS Gallup. Balticum auksinis the first DVB-C programs package, introduced in Balticum auksinis started with 6 TV programs in 2004, followed by 40 programs in 2005 and 60 programs in Balticum TV UAB is expecting to increase the number of programs to 100 by the Also in 2004 Balticum TV UAB had introduced programs package over the DVB-T network, available by that time in a certain area of Vilnius city. European Forum for Mobile TV 2006 Page 6
7 TV broadcasting in Lithuania: long path of evolution: outlook to the market Competition aspects in broadcasting market (3) Two mobile operators of began mobile TV translations in 2005 In February 2006 licences of 3G (UMTS) networks were granted, so development of services is expected. UMTS services launched April Up to now 21 TV channels are available via 3G network of one mobile operator. European Forum for Mobile TV 2006 Page 7
8 TV broadcasting in Lithuania: long path of evolution: regulatory measures Law on Provision of Information to the Public Strategic Plan of the Development of Informational Society of Lithuania (Government Resolution) Law on the National Radio and Television Order of Director of the RRT Concerning the Approval of the Rules for Allocating and Using of Radio Frequencies / Channels Strategic Plan for the Assignment of Radio Frequencies to Broadcasting and Transmission of Radio and Television Broadcasts European Convention on Transfrontier Television Strategy for the Assignment of Radio Frequencies to Broadcasting and Transmission of Radio and Television Broadcasts (Government Resolution) National Radio Frequency Allocation Table (Government Resolution) Strategy of the Development of Informational Society of Lithuania (Government Resolution) Order of Director of RRT on Digital Terrestrial Television Development Plan Law on Services of Information Society Conceptual Framework of the National Information Society Development of Lithuania (Government Resolution) Model of Implementation of Digital Television in Lithuania (Government Resolution) Law on Amendment of Republic of Lithuania Law on Provision of Information to the Public European Forum for Mobile TV 2006 Page 8
9 TV broadcasting in Lithuania: long path of evolution: regulatory measures DVB-T - step by step 2006 Winners of the DVB-T broadcasting tender were announced: 6 broadcasters: Balticum TV, LNK, Tele-3, TV1, Spaudos televizija, LRT. 2 re-broadcasters: Mikrovisatos TV, Tele TV programs in total. DVB-T translations started in Vilnius and 40 km around. Initial stages of information campaign Basic information on DVB-T announced on RRT internet site 2005 Radio frequencies licenses for DVB-T networks were issued to LRTC and TEO LT. Exemptions for licenses holders - DVB-T networks - were introduced. Plan of DVB-T promotional measures was drafted by RRT in partnership with Ministry of Transport and Communications The start of pilot TV programs transmission in DVB-T format (LRTC AB) European Forum for Mobile TV 2006 Page 9
10 Challenges to digital TV development Audiovisual and communications sectors undergo a fundamental change due to technologic progress : formerly clear borders between content and transmission are blurring. Unlimited number of audiovisual content delivery channels, i.e. the same content can be delivered over different transmission means: - cable TV, satellite TV, MMDS, terrestrial TV, IPTV, mobile TV Currently different means are licensed separately No clear reason for licensing formal administrative burden only Some transmission means risk to be ignored due to the lack of legal ground States borderlines are no more restrictive factors: Increasing popularity of internet TV and radio Target audience can be easily reached from abroad Digital technologies enable personal program individualization Necessity to develop a flexible regulatory structure; Need for consistent, pro-competitive and stimulating expansion of the digital economy regulatory system. European Forum for Mobile TV 2006 Page 10
11 Challenges to digital TV development Supply side Demand side Investments How broadly to invest? Which investment strategy to choose? Technologies Which one is the best and which one to choose? Services What services to supply in order to meet customers needs? Ability to pay/ value for money Am I able and why should I pay for extra equipments and services? Needs Do I need digital TV? End users equipment What extra equipments do I need? Awareness What do I know about digital TV, its benefits and costs? European Forum for Mobile TV 2006 Page 11
12 Ways to overcome: role of regulator Supply side Strategies for regulator: 1. Direct intervention Investments How broadly to invest? Which investment strategy to choose? Compensations; Capital injections. 2. Staying away. In Lithuania we chose the 3 rd option: 3. Indirect influence Creating preconditions. Exemptions for licenses holders in DVBT networks were introduced: - fee for the supervision of radio frequencies (channels) was reduced by 30 per cent; - payment of fee for the supervision of radio frequencies (channels) was rescheduled for 1 year period from license issue date. Clear date of the beginning of switch off of analogue TV by 2012 was announced in European Forum for Mobile TV 2006 Page 12
13 How to overcome: role of regulator Technologies Which one is the best and which one to choose? In Lithuania: Pros Compression standard MPEG 4? Better compression possibilities : transmission of up to 10 standard quality TV programmes Saving resources of radio frequencies (channels) Cons Relatively new standard (adopted only one year ago), Currently is not very common. Small supply of TV sets and set top boxes in the market. The winners of the digital terrestrial television broadcasting tender - Lietuvos Radijo ir Televizijos Centras AB and TEO LT, AB in end of June 2006 began to provide services of transmission of digital television using MPEG 4 compression standard in the digital television networks. The standard was chosen voluntarily. Also use : France Planning to use: Estonia, Norway, Brazil Also a range of countries are considering possibility of usage the MPEG-4. European Forum for Mobile TV 2006 Page 13
14 How to overcome: role of regulator Technologies Which one is the best and which one to choose? But Interactivity standard? It also calls for voluntary use of interactive television standards. And The European Commission has decided that compulsory technical standards imposed by regulators are not necessary for the roll-out of interactive digital television services in Europe. So Lithuania, taking in account opinion of market participants, in the late 2005 presented to European Commission project of the legal act on determination of uniform and compulsory standard of digital interactive television (MHP), but the Commission didn t countenance it and the legal act wasn t approved. Therefore European Commission promotes MHP as the most advanced open applications program interface (API) standard in Europe, To inspire voluntary agreement between participants of the Lithuanian market of digital terrestrial television on usage of uniform standard for digital interactive television on purpose to achieve best benefit for themselves and customers of digital terrestrial TV is the next reasonable follow-up. European Forum for Mobile TV 2006 Page 14
15 How to overcome: role of regulator Services What services to supply in order to meet customers needs? According to research of Consumers Association (UK) the most important driver of digital television take-up is the availability of extra channels. The vast majority of adopters subscribe to a basic channel bundle, while more than half also pay for premium channels. Almost three quarters of adopters mentioned a particular channel type, mostly films and sport, as an important factor in their choice. In Lithuania: 6 broadcasters and 2 re-broadcasters will offer 40 TV programs in total. New national commercial TV companies. European Forum for Mobile TV 2006 Page 15
16 How to overcome: role of regulator ,40% 7,39 7,41 5,00% 5,00% 8, Expenses for communication services, EUR per month per 1 household member The part within the total household expense The dynamics of household expenses for communication services and the expanse part within the total household expense structure in Source: Statistics Lithuania 6% 4% 2% 0% Demand side Ability to pay/ value for money Am I able and why should I pay for extra equipments and services? In I quarter of ,5 % of households were connected to CaTV or MMDS in Lithuania. This means, that 25,5 % of households are already paying for TV services. These consumers might be already over the barrier of paying extra for their television before they get digital. Still for the majority of Lithuanian inhabitants paying for TV is not a commonplace. According to the experience of other countries, free-to-air model might be a digital TV penetration driver. Therefore in Lithuania, at least 5 programs to be broadcasted free-to-air were foreseen in the legislation. As the result of digital terrestrial television broadcasting tender 14 TV programs will be broadcasted free-to-air in Lithuania. European Forum for Mobile TV 2006 Page 16
17 How to overcome: role of regulator End users equipment What extra equipments do I need? Color TV set Black-and-w hite TV set Provision of Lithuania s households with television sets in , number of sets per 100 households Source: Statistics Lithuania Challenge No 1. Lack of set-top boxes and TV sets with digital function. Market wasn t prepared because of uncertainty about the compression standard. Now the MPEG-4 is in place, and considerable amount of devices will reach the market by end Challenge No 2. The price of set-top box varies from 60 to 400 Euros. Having in mind nonwillingness and tiny ability to pay for extra TV services by Lithuanian inhabitants, introduction of a compensation mechanism, partial financing or tax reimbursements system in order to stipulate digital TV penetration in Lithuania during the transitional period might be the options for consideration in Lithuania. European Forum for Mobile TV 2006 Page 17
18 How to overcome: role of regulator Demand side Lack of information about digital TV, its benefits and costs is not incentive to purchase supplements for watching DVB-T or switch to another digital TV platform. According to research of Consumers Association (UK), reasons for going digital are changing over time. Early adopters in UK were particularly keen on access to sports channels whereas more recent adopters are more likely to mention other features. More recently, new services such as and internet access have attracted more consumers to go digital. In Lithuania awareness problem is much more tangible. Therefore Needs Do I need digital TV? Awareness What do I know about digital TV, its benefits and costs? Overall Informational Campaign is a necessity for successful digital TV development European Forum for Mobile TV 2006 Page 18
19 Ways to overcome : Considering possible means to DVB-T encouragement 1. Informational measures batch Periodical researches about current DVB- T cognition determining what information about DVB-T is essential; Creation of information infrastructure: dedicated internet site and free-of-charge info phone line; Informational campaign in purpose to introduce DVB-T to as much potential customers as possible; Announcement of exact date of final turnoff analogue TV; Development of interactive DVB-T services guides. 2. Financial measures batch Income tax concessions for all households, purchasing set top boxes; Aggregate purchase of set top boxes for schools, social care/ foster institutions and other public institution; Inducement of set top boxes lend to households for determinate time period. 3. Other measures batch The promotion of voluntary agreement among DVBT market participants regarding usage of uniform standard for digital interactive television; Sufficient state financing for national broadcaster; Concession of broadcaster s licence supervision tax. European Forum for Mobile TV 2006 Page 19
20 Future vision of digital TV Market vision Main trend individualization and personalisation, to meet needs of any individual consumer DVB-T DVB-S DVB-C Analogue Regulatory vision Revised licensing system moving to fully liberalized one; New approach to content regulation securing vested interests of consumers and no artificial restrictions to content provision; Closer cooperation internationally. TV channels, sets of TV programs, timing and devices of TV watching will be up to choice like books in bookstore. Digital TV, TV via PC and mobile phone - inter-compatible. Mobile TV complements digital TV. Trend of miniaturisation of mobile phones discontinuation. No limitations to number of channels. European Forum for Mobile TV 2006 Page 20
21 Thank you Tomas Lamanauskas Communications Regulatory Authority, Algirdo 27, Vilnius, Lithuania Phone: tlamanauskas@rrt.lt European Forum for Mobile TV 2006 Page 21
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