“By this coming April, the digital broadcasting system (Idan+) will grow to 90% coverage. This will solve many problems in the television market, and will allow new players, like Partner and Cellcom, to quietly and confidently integrate the Idan+ solution into the new world of television that they are planning,” Second Authority for Television & Radio CEO Shai Babad told “Globes.”
According to Babad, the Second Authority is working with the companies to solve the coverage problem, and he believes that ultimately it will happen faster than people think. “So the matter will not serve as an excuse for any company not to enter the world of television.”
Over the past two years, Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) have taken steps to enter the television industry, as part of the Ministry of Communications’ plan to form large communications consortia to compete with each other over providing packages of services to consumers. The goal would be to compete with telecom operators like Hot Telecommunication Systems Ltd. and Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), which currently are able to offer more attractive packages.
In order to broadcast channels over the Internet, as Partner and Cellcom are planning, the companies must make Idan+ part of their system. At current bandwidths, it is no problem to do this, however the public channels, 1, 2, and 10, have difficulty broadcasting to hundreds of thousands of viewers in real-time. Therefore, the companies need the Idan+ solution in order to split the channels, so that the channels that have lower demand will not use the frequencies on Idan+, and can be transmitted over the Internet. On the other hand, it will be possible to watch more attractive channels via Idan+.
There are conflicting estimates of the number of subscribers who have bought the dedicated device since Idan+ was launched four years ago. Estimates range between 250,000 and 400,000.
There is one thing about which there is no argument is that the service would be much better if it were adequately maintained, and, most critically, if the company were to establish decent coverage that would allow for viewing throughout the country. But, as is the way in Israel, they launched a service that is riddled with problems, and consumer confidence in the product has suffered in consequence.
The decision to entrust the Second Authority with broadcast transmission engineering was not particularly wise, as it is not their area of expertise, but it is a done deal at this point.
Now that Partner and Cellcom want to enter the market, they must work in cooperation with the Second Authority in order to help plug the holes in the service as quickly as possible, otherwise, as mentioned, they will be unable to launch the planned service.
“We are working in cooperation with Cellcom and Partner for reception to reach 85%-90%,” says Babad. “The transmitters have nearly all been distributed, and we are completing deployment of the remaining transmitters (smaller transmitters, called “pillars,” which are intended to cover smaller areas -G.P.). It is our opinion that we are currently at about 80% household coverage,” he adds.
Despite the fact that you have only been in the job for six months, what do you think is missing in terms of service?
“I don't want to talk about what happened before. As I said, we are nearing a solution. But some of the complaints come from incorrect installation, or the wrong antenna. If someone buys an antenna and puts it in the wrong place, we can’t take care of it. An important part of our plan is to launch a PR campaign, in order to explain to our customers which products to buy and how to install them in the most correct manner.”
When will this happen?
“I am working in keeping with budgetary considerations. Because it takes time to issue new tenders (for new channels that the Ministry of Communications wants to launch on Idan+ -G.P.), and I don’t want to waste public funds, I expect that we will complete the coverage by April of next year, and that it will have a significant impact on the market.”
How will we know the coverage is optimal?
“I plan to use neutral, third-party services to determine the level of reception. We are collaborating closely with Cellcom, which is helping is to improve reception using the means at its disposal, but, in the end, I want a neutral party to test and present findings.”
And then the service will be on track?
“It is important to explain that the main problem is not reception. We need the Israeli consumer to have a broader selection of channels in order for the broadcast to be attractive. The number of complaints regarding reception dropped drastically in recent months, because of the distribution of the transmitters, and the public education regarding purchasing the correct equipment.
“Another thing is that, until now, the cost of launching a channel was high, and we have reduced this cost to NIS 1.5 million. If we issue tenders for additional channels, the cost will be low, and we will launch a campaign - I imagine that Idan+ will have much greater success.”
Digital broadcast is very important to Cellcom and Partner, and they contribute to it by allowing transmitters to be built on their sites. Cellcom is much more dominant, and has already allowed putting up 14 transmitters to solve the coverage issues. Partner has put up 4 Second Authority transmitters, and they are open to putting up more.
It is very important for the two companies to cooperate with the Second Authority, and, as it seems now, Idan+ coverage will not complicate their plans to launch television services in the coming months.
Cellcom said in response, “According to tests that the company has conducted, it seems that in recent months there have been significant improvements in the quality of Idan+ broadcast reception. The company continues to cooperate with the Second Authority in order to deliver further improvements.”
Published by Globes [online], Israel business news - www.globes-online.com - on December 3, 2013
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