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Portugal clears route to digital age

Government triggers DTT launch and end of analog TV

LISBON — The Portuguese government has cleared the route toward the launch of digital terrestrial television in the country and pledged to end analog broadcasting in 2012, but leading paybox TV Cabo may yet find a way to derail the process.

The Council of Ministers approved a new broadcasting act on Thursday, which triggered the countdown to the dawn of the digital age in Portuguese broadcasting.

All that remains to be done is for parliament to ratify the act in the summer, which — given the government’s majority in the lower house — is a done deal.

Among other features, the act constructs a coherent legal framework for the launch of DTT.

Portugal hosted an ambitious European conference on DTT in 2000 and aimed to be a pioneer in the introduction of the system. But a project to set up a DTT platform, launched in 2001, aborted in the face of stiff competition from TV Cabo, which reps more than 80% of the local cable and satellite market.

After this debacle, Portugal has been far more cautious about its ambitions for DTT and has repeatedly postponed the launch of a licensing process.

The minister of parliamentary affairs, Augusto Santos Silva, announced Thursday that Portugal will switch off analog broadcasting in 2012, in line with European Union guidelines, but this may be difficult to achieve for three reasons.

First, the tender process for a digital platform license will only be launched at the end of this year.

Second, in order to push the switchover from analog to digital, the government will probably have to subsidize the sale of set-top boxes, which seems unlikely, given the economic recession in Portugal and budgetary cutbacks.

Third, TV Cabo, which has 370,000 digital satellite subscribers and 1 million cable TV subscribers, of which 270,000 are digital clients, remains opposed to the launch of a rival DTT platform.

TV Cabo has invested in upgrading its cable network to digital broadcasting and 90% of homes passed are now digital TV enabled.

TV Cabo has also launched telephony services on its network, thus becoming a triple play operator, that is, offering cable, Internet and telephone services.

One development that may affect the paybox’s views on the launch of DTT is the bid by telco Sonaecom to take over TV Cabo’s parent company Portugal Telecom (Variety, Feb. 21, 2007).

So far, PT’s board has fought off Sonaecom’s advances but the stakes are getting higher, both for TV Cabo and the Portuguese TV business in general.

Whatever happens to the bid, Sonaecom’s CEO Paulo Azevedohas is determined to become a major player in the Portuguese media world.

PT has announced that it will spin off its cable TV franchise and Sonaecom is likely to be the strongest contender for that operation, should its bid for PT itself fail.

Sonaecom has already entered the pay-TV market in Portugal, launching a broadband service, SmarTV, in April 2006. This aims to secure a 10% market share.

The DTT platform, meanwhile, has primarily aroused interest from long-established broadcasters, such as Media Capital, which has a free-to-air license.

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