russia_russia 16/01/2014 09:44 Page 11
Insider’s View
Jean-Philippe Gillet, VP,
sales Europe and Middle
East, Intelsat, shares his
thoughts on the Russian
market.
l The region’s
size, combined
with harsh
weather
conditions,
means that
some
communities
are isolated and
harder to reach.
Building fibre is
sometimes
geographically
impossible or
not
economically viable - only
satellite can deliver content
for media and network
service providers across the
region. In certain areas with
no fibre network, such as
Russia’s Far East, where the
Khabarovsk-PetropavlovskKamchatsky-Magadan fibre
optic project was cancelled,
satellite remains the only
means to reach rural
Sistema Mass Media
Sistema Mass Media (SMM) is
one of the leading media
holding companies in Russia,
managing assets in pay TV,
premium movie and TV
content production, and
advertising.
SMM owns and manages
CJSC TV Company STREAM
(Stream), CJSC Russian
Worldwide Studios (RWS),
Maxima Advertising Agency
(Maxima), CJSC TsTV (TsTV),
and the web portal
Stream.ru.
In line with market
demand, RWS’s studio
business ramped up
production of mini-TV
series in 2012 and its
content library increased to
18 RUSSIA Briefing
sector, there is a
series of trends
driving demand,
including growth in the
number of SD and HD
channels distributed via
free-to-air platforms. With
competition between
providers intensifying, payTV providers are seeking to
differentiate their services by
expanding the number of HD
channels they offer. Already,
4m viewers in Russia were
watching HD channels in
2013 - compared to
400,000 in 2012 - and there
remains room to grow.
l Russia and the CIS are key
markets for Intelsat.
Horizons 2 was moved to 85°
East to serve the western
and central Russian market
and today serves a key role
for DTH and cable
distribution. Orion Express, a
major satellite television
provider in Russia, uses
capacity on Horizons 2 to
expand its DTH services to
customers across Russia as
well as offer television
content delivery services for
broadcasters. Intelsat 18 at
180° East and Intelsat 904 at
60° East are also hotspots
for demand, with many of
the region’s top
communications providers
taking capacity.
l Other areas of growth in
the region are cellular
backhaul and broadband
connectivity. The cellular
backhaul sector is one of the
fastest growing sectors
around the globe, and Russia
and the CIS are no
exception. The deployment
of 3G and 4G networks as
well as the growing demand
in mobile data services is
driving this growth, and
analysts predict that 3G
delivery will cover 78% of
mobile subscribers in Russia
by 2018.
l Access to broadband
connectivity has also become
essential to countries’
economies and growth, as
always-on connectivity is
seen by governments as an
essential tool to support
entrepreneurship, even in
the most remote areas.
Mineral and energy
companies operating
throughout Russia and the
CIS – and often in harsh
environments – also rely on
a mix of complex missioncritical applications to
improve productivity and
profitability and need an
always-on broadband
access. Intelsat has been
working on ensuring that
critical link via its existing
infrastructure and will
expand those capabilities
with the introduction of the
high throughput, high
performance Intelsat EpicNG
platform.
1,600 hours.
In May 2012, SMM rebranded its Stream.ru
service. It launched
applications for all popular
devices and platforms, and
by the end of 2012 had
created one of the largest
high-quality content libraries
in Russia.
Stream TV strengthened
its market position and
became a leader by average
monthly reach in every niche
group. Stream’s channel
distribution network includes
over 1350 cable, satellite and
IPTV operators in more than
800 Russian cities and
towns. The subscriber base
grew by 21%, to 7.5m unique
subscribers, while the
audience increased to 19.5m
viewers.
The company’s film
production plans for 2013
include increasing the
market share of TV series
through enhancing the
number of projects and
monetising the library. The
main goal of the film
production business is to
achieve net profit,
particularly as a result of
transferring film production
to St Petersburg, and by
engaging customers.
The company’s goals for
2013 included increasing
Stream.ru’s market share of
both audience and income,
and developing its
functionality and
accessibility from all
mainstream devices.
In the TV segment, SMM
is focused on enhancing its
telecom operator and
subscriber base, growing
incomes and monetising
additional content. SMM’s
investment strategy is aimed
at the company’s
stabilisation and building
core assets using TV and
digital resources. The
company is set to develop
these areas both organically
and through M&A, with a
view to creating an effective
leader in the new media and
pay TV sectors.
At the end of 2013 SMMS
announced that its
subsidiary Sistema Finance
had acquired 6,730,360 of
MTS shares on the open
market for $64 million. As a
result, Sistema’s effective
shareholding in MTS has
increased to 53.47%.
populations.
l Demand for satellite
capacity in the Western and
Central part of the Russian
Federation is mostly driven
by broadband access to
support growing corporate
networks, mobility
applications and
consumer
access. Major
industrial
investments are
also being made
in the Far East,
which should
lead to further
demand for
capacity.
l In the media