Cable TV shrouded in mystery, but in the end, viewers come off a loser

Date: 11:37, 25-03-2015.

Almaty. March 25. KazTAG - Vladimir Radionov. Entertainment fees have soared following increase of bread prices in Kazakhstan. Since February 1, the major market participants of cable TV raised the prices for their services. Moreover, one of the operators -  "Alma-TV", performing rules of competition law leveled the cost of packages in different regions, and in some cities, the monthly fee has almost doubled.

Officially cable TV companies declared about increase of services fees by 30% - to  1700-1800 tenge for the cheapest package attributing this to the rising cost of rights for the retransmission of foreign television channels. We have tried to understand the process of price formation on the example of one of the companies and referred to "Alma-TV". The company on its official website positions itself as a leader among the domestic cable operators.

"Pricing of cable television services "Alma-TV "is made exclusively on the basis of market conditions and production costs of the company. Production costs are made up of payment coverage by the company for content and the cost of construction and maintenance of infrastructure, " said Philipp Prokudin, PR director of "Alma-TV" to KazTAG's request.

In particular, he indicated that the fees for utility services and expenses for new equipment acquisition have been growing, as well as the rent fees. But one of the essential components is the fees for retransmission of foreign channels.

He also reminded that the previous increase of prices for cable television services of "Alma-TV" company was made in 2011, and the rates were kept for 4 years, despite the fact that the costs for retransmission of foreign and domestic channels have been growing.

“Icon” LLP and “Alacast” LLP commented on the tariffs growth on their official websites.
Trust, but verify - we thought and decided to find out which foreign channels increased the content fees and how much?

But in a telephone conversation P. Prokudin referred to the secrets protected by law: he said that all the figures are confidential information in any contract and cannot be transferable.  We comply with the law on the media and on the guarded secret. Nobody wants a dispute with the owner and receive multimillion-dollar lawsuits.

After this response, we decided to talk to another party and try to get information from foreign TV channels , or from their representatives in Kazakhstan. However, it was not so easy.

While addressing to the staff of one of the most popular Russian TV channels we came upon several obstacles. A representative from the commercial directorate of "Ren-TV", asked which operators we were talking about and explained the position as follows: "Unfortunately, we cannot answer this question." She noted that it is necessary to look up the documents, to request information from the financial management, send a request to Kazakhstani cable operators, and so on. In addition, the possible disclosure of this information may be prohibited by lawyers, since the conditions of the agreement are confidential. "I think no broadcaster will provide you such data", concluded the interlocutor.

Director of «Eurasia Media Distribution» LLP Tatiana Yelkina (the company is the official representative of Russian and foreign TV channels in Kazakhstan) said that in particular "Alma-TV" buys the right for rebroadcast of only 9 channels, which are not included in the "Universal" package whose fee is higher than 1800 tenge and therefore it is incorrect to put blame on the company for increasing the content fee.

Of course, if we want to get high-quality content, we must understand that we have to pay, it's intellectual property, which we have to buy. But there is no fullness in the statement of the operators that they increased the fees following increase of fees by the copyright holders. "In addition, we have a very small percentage of the total number of contracts with the major players in the market, they prefer to work with the TV channels directly. We are no longer working with regional operators, and I can say we did not increase the fees," said Yelkina.

In fact, all the operators increased their fees on one day- February 1, the difference in fees has turned out to be minimal( the cheapest package of "Icon" costs 1700 tenge per month,  the cheapest fee of "Alma-TV" and "Alacast" - 1800 tenge tenge), and it is probably not more than a coincidence. We do not claim that it was the price collusion.

We will not make any further conclusions, especially since the tariff increase is a legal right of each company. In particular, in its response "Alma-TV" says that even though the company "... is included in the State Register of market subjects, having dominant or monopolistic position in Astana, Almaty, Aktau, Atyrau, Karaganda, Kokshetau, Kostanai, Pavlodar, Taldykorgan, Taraz, Uralsk, Ust-Kamenogorsk and Shymkent, "but... the company is not obliged to harmonize its fees with the state bodies. "

By the way, the standard excuse of competitors that the consumer has the right to choose,  is hardly applicable in this case. If, for example, to look at the sausage market, then the price varies within 800 tenge to 5000 tenge per kilogram, while the cable TV fees-  from 1700 tenge to 1800 tenge. Still, these figures - eloquent fact.

In general, if trying to answer the question, to watch or not to watch cable TV, the author of these lines lately has leaned toward the latter. Why? Because there are many alternatives to cable TV.

First, you can subscribe the national satellite network  Otau TV. The press service of "Kazteleradio" told us that the cost of their services, depending on the selected package ranges within 700 tenge to  2000 tenge.

Second, you can put an individual satellite dish and adjust it as you like: this field in Kazakhstan in general is not regulated. Third, high-speed Internet today is no longer a luxury, while configuring Internet TV is a task for a first grader. However, it is difficult to imagine my 70 years  old grandmother, freely surfing the World Wide Web, while our seniors are the most massive consumers of TV due to their numerous and  favorite TV shows. But they can call for help grandchildren in the end.

By the way, the best choice of cable operators on price is available in those regions where the major players compete with small operators. I should say, although they increased their fees, but not like the major players. For example, in Astana the prices from local operators range from 960 tenge to 1600 tenge, in Kostanay - from 900 tenge to 1000 tenge, in Uralsk region operators provide services for 900 tenge, in Karaganda - for 950 tenge, in Semey for 1400 tenge.

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