With the expansion of the European Union, the makeup of the Eastern European satellite market has changed. Today, when people speak of this market, they are referring to Russia and its former Soviet republics; members of the former Yugoslavia as well as Albania, Bulgaria and Romania. And even though familiar economic challenges remain, this Eastern European region continues to show market promise.
So how are satellite equipment and service sales doing in this region? The answer is that oil-rich Russia is the brightest star in "new" Eastern Europe. From VSAT solutions to consumer services, Russia is taking a strong lead regarding satellite demand within the Eastern European region.
Recently, Modern Times Group (MTG) has strengthened its position in Russia by increasing its stake in DTV, a Russian free-to-air (FTA) channel and StoryFirst Communications, a U.S. entity that owns and operates CTC, Russia's largest privately-owned commercial TV network, as well as 13 regional stations.
MTG acquired a further 1.9 percent stake in StoryFirst Communications, lifting its shareholding to 39.9 percent. In addition, MTG announced the acquisition of the remaining 25 percent stake that it did not own of the DTV Russian TV channel. MTG is also one of the leading media and pay-TV providers in Scandinavia and is becoming a key player in the Baltic region in its expansion beyond Scandinavia.
Satellite service providers say the Russian TV audience is the largest in Europe and the market continues to show great potential. Satellite-delivered programming expansion into Central and Eastern Europe began years ago and now with the advent of free-to-air and/or pay-TV businesses in demand, companies like MTG are further penetrating countries in the region. DTV's share of viewing in the core demographic group of 12- to 49-year-olds has grown steadily since 2001, according to executives following this market.
"When it comes to satellites, the Russians know what they want," says Chris Alfenito, Miteq's director of satcom sales. "We like demanding clients who know what they are doing." Russia's demand for satellite equipment services is mirrored by the former Soviet republics of Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan, which also have substantial oil and gas resources. In contrast, a lack of exportable natural resources has kept satellite investment dollars scarce in Albania, Bulgaria and Romania. Meanwhile, tough government regulations in Ukraine has kept Western satellite providers out of this nation. All these political and local scenarios are garnering regional new applications that call for satellite connectivity.