Romtelecom launches TV services through phone lines

Romtelecom, one of the biggest telecom operators domestically, has launched, in Bucharest, Cluj, Iasi and another 7 big cities, TV services through the same lines it provides fixed telephony and Internet services through, thus opening a new front in its battle with RCS&RDS and UPC, leaders of the Romanian TV services market. Romtelecom lines reach over 4 million houses and companies.

Romtelecom’s Internet Protocol Television (IPTV) service costs 15 RON per month, but is available only for those customers who also bought from the company fixed telephony and Internet at a speed of at least 8 Mbps. Clients subscribing now will not pay for the IPTV subscription until March 2010. With a little more than 800,000 customers on the segment of satellite television, Romtelecom ranks third on the Romanian TV services market, after RCS, with 2.5 million clients and UPC with 1.2 million.

“The company’s current strategy is to gradually become no. 1 in the entertainment area and for this we must be able to provide TV services, games,” says Yorgos Ioannidis, CEO of Romtelecom.

By entering the IPTV segment, Romtelecom will be able to compete with its rivals on the segment of premium services as well, such as HD television, DVR or video content on demand. UPC is at the moment the only operator providing HD TV and DVR, thus profiting from the current demand from the almost 700,000 Romanians holding a HD TV set.

What is Romtelecom’s stake in making this move? One of the most obvious explanations is the retention of clients of fixed telephony, a service provided for free by RCS&RDS, but also encouraging current clients to shift to Internet at higher speeds and therefore higher tariffs.

But the IPTV also helps Romtelecom make for the historical mistake of having sold, in 2005, the first cable TV operator of Bucharest that had set up an optical fibre infrastructure to the current UPC.