Volia cable will ditch analogue and go digital
by Vlad Lavrov, Kyiv Post Staff Writer
Oct 12 2005, 23:18

Two simple reasons for upgrade: quality and profitability

Volia Cable, a cable operator with nearly 500,000 subscribers in Kyiv, is planning to put an end to its analog cable TV service in the city by switching to a digital format.

The company, which currently has 20,000 subscribers to its digital TV packages, predicts that number will increase to 120,000 by the end of 2006. At that time Volia will cut its two analog packages, which currently include, respectively, 18 and 30 channels from Ukraine and Russia.

Volia executives estimate that up to $8 million of investment will be required to make the decoders affordable to clients with modest incomes. They plan to charge Hr 40 ($8) for the first month of basic digital package and its installation, and then a subsequent monthly fee, which will include Hr 18  ($3.50) for service and about Hr 13 ($2.50) for rental of the digital decoder.

Serhiy Boyko, president of the Volia group of companies, says there are two reasons for the radical switch – quality and profitability.

Digital profits

Boyko says that given the ever-increasing level of interference from mobile and cordless phones, portable radio stations and other electric appliances in the city, it has become more difficult to ensure that analog cable subscribers receive clear picture and sound.

“It’s often the case, especially in the downtown area, that people in range of several apartment buildings overhear someone’s conversation on a cordless phone in the middle of a movie.”

Boyko predicts the situation will only get worse, since “technical progress cannot be stopped.”

In response to the poor quality of analog, Boyko says, people will make the switch to digital television, which was invented to avoid interference.

Volia Cable foresees that the basic 30-channel package will cost the same – nearly Hr 20 – for both analog and digital cable. In fact, Boyko says, it is likely that the digital version of the basic package will cost a couple of hryvnyas less – a symbolic move to promote the new technology.

He predicts that Volia Cable, which since 2000 has invested $45 million in the cable network in Kyiv, will become profitable in 2008, if it switches to digital by the end of 2006.

Natalya Ligachova, chief editor of Internet-based media watchdog Telekritika, thinks that Volia Cable’s plans are logical and follow the development of the telecommunications market.

Ligachova also considers it important that Volia Cable to run a positive PR-campaign, stressing that socially vulnerable would not be affected by the changes.

“After all, nobody asked those people when they cut off public antennas from buildings.”

Currently, Voila Cable’s largest package contains nearly 70 channels and costs Hr 81 ($16). The selection of channels includes all Ukrainian and Russian channels, as well as international news, film and sports channels, and Viasat and Discovery selections. Boyko says they plan to add up to 20 channels annually. Volia’s network is capable of handling up to 500 channels. Presently it covers close to 90 percent of Kyiv.

Volia Cable is owned by the Ukrainian Growth Fund III, whose assets are managed by SigmaBleyzer, an American investment banking group.