MATAV cable expansion could cause trouble for KabelKom

BUDAPEST — Hungarian telecom giant MATAV has just entered the cable television industry in a development that could endanger TV interests owned by Time Warner.

MATAV is currently operating a pilot project that is delivering cable programming to about 100 homes in Budapest’s 17th district, but the company projects it will have 40,000 cable subscribers by the end of the year, and has announced its intention to expand into one of Hungary’s largest cable providers.

Hungarian cabler KabelKom, partly owned by Time Warner, is one of many companies operating locally that could be eclipsed by MATAV’s decision.

Analysts admit that KabelKom, operator of the pay TV service HBO Hungary, the history/science channel Spektrum and the music service Z Plus, is, by virtue of its size, in the best position to compete against MATAV.

“Small (companies will not be able to) operate economically,” said Zsolt Gattyam, manager of a small cable outlet in the Hungarian community of Urom. By some reports, Hungary’s stable of 500 cable companies could dwindle to as little as six in coming years.

However, MATAV’s onslaught could affect KabelKom’s expansion plans. Analysts say the future of U.S.-owned cablers will depend on cable TV legislation currently being drafted, which is expected to impose U.S. companies with strict regulations.

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