Cyprus-Forum.com

by **Sotos** » Mon Feb 13, 2006 2:14 pm

LTV is reported to have reached a deal with the Board of CyTA to manage the miVision platform from 2006 at a minimum fee of CYP 2.5 mln annually according to Simerini.

The cooperation agreement provides that LTV and ALFA shall remain on Multichoice’s platform until 2010, while at the same time LTV and ALFA will supply miVision with entertainment content (movies, football games etc.)

I have Mivison. Is this good or bad news? I think Mivision will have difficulties if the triple play of Prime-Tel will be successful.

by **Hazza** » Mon Feb 13, 2006 4:58 pm

If LTV and Alpha are on Mi-Vision, how much will they charge? If its not much different, then I will subscribe to it.

by **Sotos** » Mon Feb 13, 2006 5:06 pm

If LTV and Alpha are on Mi-Vision, how much will they charge? If its not much different, then I will subscribe to it.

You think it will be like that? Most people get Nova Cyprus because it includes LTV and Alpha so they can watch soccer. If you can get LTV and Alpha with Mivision which is cheaper then Nova Cyprus will loose subscribers.

by **Sotos** » Fri Feb 17, 2006 11:33 am

A surprise deal for the Cyprus Telecommunications Authority’s digital TV platform miVision to carry LTV and Alpha programming has dumbfounded investors pondering whether their Multichoice shares would be made worthless.

On the surface, the strategic merger between miVision and LTV is a masterstroke for CyTA as it would instantaneously multiply its subscriber base drawing from LTV’s 65,000 own subscribers.

MiVision was commercially launched in July, 2004 with much fanfare, but has struggled to convert Cypriots into believers that its service beamed directly into homes through CyTA’s existing copper phone line network was the wave of the future.

That was due to LTV’s lock on most football broadcasts which accounts for the channel’s widespread popularity. LTV deal with the Cyprus Football Association for the rights to broadcast the vast majority of matches extends beyond 2007.

But LTV stands to gain substantially from the partnership as well by latching on to CyTA’s digital network that would allow it to eventually dispense with its own clunky, analogue box-top decoders.

The in-principle deal - expected to be ratified by the end of the month – reportedly envisages CyTA paying out a £2.5m annual fee to LTV to manage its programme content plus a monthly bonus of £7 for every new subscriber it reels in.

Moreover, semi-state CyTA would take a 25% stake in LTV through subsidiary Digimed Communications.

A CyTA official told The Cyprus Weekly the agreement has broad political backing and is expected to sail through parliament, even if it seemed to have caught many – including President Tassos Papadopoulos - by surprise.

"I consider this issue to be a matter of general policy and the government should have been informed beforehand," Papadopoulos told reporters.

Communications Minister Haris Thrassou gave Papadopoulos and his ministerial colleagues a briefing on the deal at yesterday’s cabinet meeting.

CyTA officials appear certain of strong political support for the deal straight from the top. But in case funding the deal hits turbulence in parliament, CyTA could draw capital from semi-autonomous Digimed, thus skirting House approval altogether.

Furthermore, the deal is seemingly LTV’s financial ace-in-the-hole as it comes on the eve of its dual listing on the Cyprus and Athens stock exchanges.

A partnership with the island’s telecoms juggernaut would certainly push its share price up in trading.

But the deal has produced many unanswered questions, stirring up unease among shareholders and subscribers alike.

That stems from LTV’s intention to sell its 7,466,390 shares in its programming manager Multichoice to CyTA.

Already three Multichoice Board members – Akis Avraamides, George Xinaris and Constantinos Emilianides – have resigned in protest over the planned sell-off they fear would crush the company’s share price.

Trading

And that has small shareholders in Multichoice fuming mad.

"As a shareholder, I feel this is a disaster in the making. If the LTV-Multichoice agreement is dissolved, then my stock in Multichoice will be worthless because the company would be finished," bank employee George Magos, 49, told The Cyprus Weekly.

The Cyprus Stock Exchange has already suspended trading in Multichoice shares to avoid dumping.

Trying to soothe frayed nerves, LTV assured in a statement that it’s not considering terminating its agreement with Multichoice – at least, not yet.

Multichoice is LTV’s decoder hardware provider and has an exclusivity deal with the company until 2010.

What’s more, many LTV subscribers who also signed up for the Nova package said they feel short-changed by the miVision merger.

That’s because each month, they fork out £9 more than miVision subscribers who pay around £18 for their package.

And that price difference would be grossly unfair if LTV-Nova and miVision would pump out the same programming.

MiVision subscribers pay no installation fee, while installation for the Nova package is around £40.

Both CyTA and LTV are keeping their lips sealed until the ink has dried on the contract.

Telecoms insiders said the quandary over subscription frees is a sticking point the two companies are still trying to work out.

"These are they details both sides are hammering out, but it just doesn’t make sense that the fee for LTV subscribers would remain inflated relative to the miVision fee," the insider said.

Cartel

Moreover, the disclosure of the deal earlier this week was strongly denounced by private TV channels concerned that the merger would potentially push their ratings down and take a huge bite out of their advertising revenue.

On top of that, there are rumblings out of the Competition Commissioner’s office that the partnership has the makings of a cartel.

Although George Christofides said no formal protest has been lodged, his Committee would study the deal in depth to determine if the agreement is breaking competition rules.

European Democracy Leader Prodromos Prodromou said that far from keeping subscribers’ best interests in mind, the deal is designed solely to boost LTV’s share price on the Cyprus and Athens stock exchanges.

At the same time, he said the agreement just covers up CyTA’s failed financial gamble to set up miVision.

"The whole affair has the whiff of a stock market scandal. Because trading in Multichoice shares has been suspended on the Cyprus Stock Exchange, while attempts are being made to inflate LTV’s share price," said Prodromou.

by It » Mon Feb 20, 2006 4:35 am

Anybody with more info on this deal?

I have Mivision and the addition of the LTV and Alpha channels at no additional cost would be a very good development.

by **Sotos** » Thu Feb 23, 2006 12:14 am

miVision, CyTA’s digital platform, is seeking to strike new deals with content providers from Cyprus and abroad, as CyTA rushes to boost the total channels on its pay-TV digital platform from 36 at present to 60.

CyTA Chairman Stavros Kremmos told the Financial Mirror that the letter of intent signed with Lumiere TV Public Co. Ltd, according to which the programmes of subscriber channels LTV and Alfa will also be transmitted through miVision, in addition to the Multichoice subscriber platform, is not “an exclusive agreement aimed at hurting competition, but is open for other channels to utilise.”

Kremmos said that private TV stations like ANT1 and Sigma are more than welcome to engage in talks with CyTA to reach a deal.

“I can assure you that if they (ANT1 and Sigma) don’t come to us, we shall go to them to sign deals in order to boost our content,” he said.

He explained that miVision broadcasts 36 channels, of which 27 are active. Once the deal with LTV is operational, then the total will be 40, channels, but the objective is to boost miVision’s content to 60 and more, which means that more deals are in the pipeline with Cypriot and foreign providers.

Kremmos, who has come under harsh criticism for clinching the LTV deal, defended the decision, saying that as long as he is Chairman, “nobody can hold CyTA back and force us to rely on outdated means of securing our future revenues.”

What price?

Kremmos said LTV and Alfa currently boast the best content and this is why CyTA decided to ditch old differences and secure their programming content.

He brushed aside references in some media that over the next 15 years, CyTA may pay up to CYP 165 mln in fees to LTV.

“That is ridiculous, I don’t know who came up with that figure, but I can assure you that it is totally wrong and was probably made to distort public opinion,” said Kremmos, who nevertheless refused to go into financial details, citing a confidentiality clause signed with LTV.

He said, however, that while in the initial years, some payments will be made to LTV, after that the whole deal is based on revenue sharing.

Established since 1993, LTV boasts over 65,000 subscribers, of whom 15,000 have upgraded to the NOVA digital platform. It has an estimated 30% market penetration of all households in Cyprus.

miVision presently has 8.000 subscribers, but hopes that once its deal with LTV gets underway, this number will rise rapidly.

Reliable sources told the Financial Mirror that CyTA will need to pay CYP 5.5 mln to LTV over the next 3 1/2 years for use of its content, including live football from Cyprus, the UK Premiere League, UEFA, Greek Premiere as well as major European football, plus other popular sports, as well as access to the latest films and popular programmes like ‘Desperate Housewives’.

The same sources said the CYP 5.5 mln spread over the next 3 1/2 years is very competitive for the amount of content that LTV will give to miVision. After the the initial phase of the deal, the two sides will start sharing revenue based on the number of subscribers.

No link with Multichoice

Kremmos said CyTA is not involved in the dispute between Lumiere’s directors with the CSE-listed Multichoice.

The CSE suspended trading in Multichoice shares until mid-April to give time for MCC to react to the LTV decision to start joint transmission of its content on the miVision platform and from 2010 terminate its deal with Multichoice as well as dispose of its 27% direct and indirect stake in the company.

Quadro Play

The Financial Mirror has also learned that the miVision deal with LTV will see the debut of CyTA’s Quadro Play services as the telecom giant rushes to beat the competition now gearing up to offer Triple Play services.

CyTA knows too well that the days of deriving the bulk of its revenue from fixed line telephony are numbered and it needs to offer Cypriot households a single connection that will offer voice, mobile, Internet and data otherwise known as Quadro Play.

In any event, private TV stations need to change their transmission format to digital after 2010 according to EU directives as Brussels cuts back on the number of frequencies used by analogue providers, which is why CyTA is rushing to become the preferred digital platform for TV channels.

In addition to the popular TV stations like ANT and Sigma, the two main players likely to be affected by the move are PrimeTel, the strategic telecoms partner of the EAC and OTEnet Cyprus, the Cypriot arm of the Greek telecom giant OTE, both of which are rushing with plans to offer Triple Play and other technologically advanced services.

Officials from PrimeTel and OTEnet have promised to take the miVision/LTV deal before the Competition Commission as well as before the European Commission citing the fact that the two major players will stifle competition by setting up a monopolistic situation difficult to crack.

by **Sotos** » Fri Feb 24, 2006 2:37 am

By Menelaos Hadjicostis

Officials from the Cyprus Telecommunications Authority (CyTA) and LTV are confident their digital TV programme sharing deal can stand up to any legal challenge amid concerns it could stifle competition.

"Negotiators who hammered out the deal made sure to embed clauses in the agreement that wouldn’t leave either company vulnerable to anti-competition litigation," CyTA General Manager Nicos Timotheou told The Cyprus Weekly.

The source said the agreement – enabling CyTA’s digital TV platform miVision to carry popular LTV programming – is not exclusive and does not preclude other private TV stations from jumping aboard.

"The deal doesn’t shut the door to others from working with miVision," said Timotheou.

Vocal critics

Timotheou said even the deal’s most vocal critics – private TV channels weary that the deal could spell lower ratings for them and hence lower advertising revenue - have every opportunity to negotiate with CyTA to broadcast their own programming on miVision.

"We operate under the revenue sharing premise where everyone would come out a winner," said Timotheou.

In fact, private channel Sigma had been negotiating with CyTA the last two years to offer a movie channel as part of the miVision package.

Revenue from subscribing to the specific movie channel would be split down the middle between CyTA and Sigma.

But the private TV channel apparently put its pitch on the backburner, allowing LTV to beat them to the punch and go digital through CyTA’s expansive copper phone line network that supports digital TV transmission.

The digital advantage over satellite or antenna-transmitted a pay-TV is huge. Subscribers to the digital platform can enjoy simultaneous voice and Internet connection as well as services such as video-on-demand – something that satellite or antenna transmissions cannot provide.

According to Timotheou, the nuts and bolts of the agreement in its first phase would see LTV offer a four-channel package on miVision including cartoons, feature films, sports (primarily domestic football matches) and a second sports channel showing international matches combined with telemarketing programmes.

Both CyTA and LTV would each earn £7 for each subscriber tuning in, at no extra cost to current subscribers to either miVision or LTV.

This arrangement would last until 2010 when the entire LTV programming package carried on miVision at a slightly higher cost to subscribers.

"Whatever the cost, our service will always be cheaper," said Timotheou.

The CyTA official stressed LTV’s current partner Multichoice would still be able to carry the same LTV programming on its own satellite broadcasting network past 2010.
Raid

Timotheou’s attempt to set the record straight came in the wake of a raid by Competition Protection Committee officials on the offices of CyTA and LTV bosses on Wednesday.

A statement said the raid was mounted as part of CPC’s own investigation into whether the agreement would spawn a digital TV juggernaut crushing competitors.

CPC officials looked through desks and computer files in search of any evidence the agreement was configured to muscle competitors out of the digital TV business.

Not even the office drawers and computer of state-owned CyTA’s Board Chairman Stavros Kremmos was off limits.

However, CPC officials were stumped by Timotheou who gave them the all-clear to search anywhere they wished – except his personal e-mail account.

CPC officials left empty-handed only to come back a day later, spending a full three hours searching drawers and computer files - minus Timotheou’s e-mail.

The CPC is empowered by law to carry out surprise raids to collect evidence relating to cases under investigation.

But a legal grey area over personal e-mail searches is hounding the CPC’s investigation.

CyTA officials say personal e-mail is out of bounds – CPC officials say everything inside an office is fair game.

Attorney General Petros Clerides has yet to weigh in with a legal opinion either way.

CPC Chief George Christofides has waged a running battle with CyTA bosses to get them to heel and give competitors a fighting chance in a domestic telecoms market long dominated by the Authority.

And in a written CPC statement, Christofides served notice to both CyTA and LTV that they could face a fine of £50,000 if they fail to cooperate in any search. Another £5,000 fine would be slapped on either company for every day they fail to comply with CPC wishes.

Both CyTA and LTV have remained tight-lipped about the details of their agreement since it was outed early last week.

In tersely-worded statements, both companies said they are acting within the law to offer customers the best possible service.

But they decried "inaccurate" reports in recent days creating the impression that they are sacrificing their customers best interests to the altar of profit.

The fact remains, however, that both companies were caught flat-footed by the media onslaught, opting to remain silent instead of pre-empting critics by disclosing details of the deal.

The media attention came hard and fast because it affects close to 80,000 people who subscribe to either miVision or LTV.

High stakes

And the stakes are high thanks to LTV’s lucrative lock on domestic and European football broadcasts that have been a boon to the company’s fortunes over its 14-year presence in the pay-TV market.

CyTA also stands to gain handsomely by switching LTV’s massive 65-70,000 subscriber base onto its struggling miVision platform.

Confidential negotiations have been ongoing for four months without so much a word leaking to the media.

CyTA officials have gone on record as saying that it’s a done deal and all that remains is for a few details to be ironed out.

But the agreement was hardly a surprise to government officials who were fully briefed by CyTA chiefs the deal was in the offing.

Ironically, it was President Tassos Papadopoulos himself who said last week he was caught off guard by the deal.

The implication was that the agreement had not been officially sanctioned by the government.

This week Papadopoulos clarified that he was aware of the negotiations, but wasn’t clued it as to the details.

Deputy Government Spokesman Christodoulos Pashardis said yesterday the government was fully abreast of CyTA-LTV negotiations and the fact that the companies had come to an agreement.

As to whether the deal may have breached competition regulations, Pashardis said CyTA’s political boss, Communications Minister Haris Thrassou and Finance Minister Michalis Sarris are in touch with both Christofides and Telecoms Regulator Vassos Pyrgos.

The CyTA-LTV will be debated in the plenary this Thursday at the behest of Disy Chief Nicos Anastasiades.

So they will show some programmes of LTV and Alpha including football. I hope they will show all football games of LTV!

by **Sotos** » Thu Mar 02, 2006 4:09 am

Lumiere TV Public Co. Ltd. went on the counteroffensive Tuesday after coming under a barrage of criticism following its content management deal with CyTA to move its transmissions to the miVision platform.

LTV Chairman Akis Avraamides called an impromptu press briefing where he warned Antenna and Sigma TV bosses to "back off" from using “unorthodox” methods to thwart the deal.

Avraamides was surprised at the tone of the attacks from the two TV channels and a host of politicians, led by European Democracy MP Prodromos Prodromou, who labelled the LTV/CyTA deal as being "against the ublic interest" and "at the expense of the tax payer". They also used unfair references such as "scandalous" to frighten the public into believing that CyTA’s wealth was being squandered, he added.

"(Sigma boss) Hadjicostis is attacking the deal because he believes that his political influence will diminish if LTV broadcasts its content through the CyTA miVision network, and because Sigma failed to provide the content that CyTA wanted," said Avraamides, warning that the days when TV bosses could "elect" or "bring down" governments are over.

He said he was surprised that no politician protested at similar content deals that CyTA signed with Cypriot concerns Axxia and Music Box, or with foreign content providers, yet all hell broke loose when it emerged that CyTA had signed a deal with LTV.

"What’s their problem? Is it because CyTA has done a bad deal or is it because CyTA has made a deal with LTV?"

Asked to comment on the charge that CyTA agreed to pay CYP 165 mln over the next 15 years, Avraamides said the annual cost on LTV for its programming content amounts to CYP 7.5 mln, which over a 15-year period amounts to CYP 113 mln.

"What about the other costs. I can assure you that the deal is beneficial both to LTV and CyTA, which needs content and proper management of its network to be able to survive and prosper."

He repeated a previous statement made by CyTA Chairman Stavros Kremmos to the Financial Mirror that the LTV/CyTA deal does not exclude others and that it is based on revenue sharing from future subscriber income.

In another development set to add fire to the "war" with the Sigma TV/Dias Group, Avraamides said that in the event that the CyBC content deal with Alpha TV of Greece is broken, "LTV will not allow it to slip away and will clinch it."

QUADRO PLAY

Avraamides said that the real reason why LTV, as the best content provider, decided to enter into a deal with CyTA for use of its miVision platform is because "hitting the airwaves through satellite for a small country the size of Cyprus does not make economic sense, which is why we need to go through cable or high bandwidth telephone lines."

He said that LTV was approached and had prospective cooperation talks with all the players in the market including PrimeTel, OTEnet, Cablenet and AthinaSat, but eventually decided to go with CyTA, which as previously reported by the Financial Mirror will soon launch its Quadro Play services of voice, mobile, Internet and data through one line. This will be in direct competition with the likes of PrimeTel and OTEnet, that will soon launch their Triple Play services (excluding mobile).

CyTA is reported to have already brought in the required equipment to commence ADSL+2 linkups, which is the basic requirement to offer Quadro Play services in the future and also overcome its disadvantage of having only 12.000 DSL subscribers and limited geographical DSL presence islandwide.

Avraamides insists that since the LTV/CyTA deal is not exclusive and the miVision platform is open to every content provider, in future more private firms with specialised content will be able to offer their services through miVision and share the revenue with CyTA.

He did not rule out LTV offering a news channel in cooperation with other channels in future through miVision, which he admitted could be one more reason why the traditional channels and politicians with most access to the airwaves were afraid of and opposed the LTV/CyTA deal.

TAKEOVER BID FOR MCC

LTV is preparing to submit a takeover bid, seeking a minimum 40% to maximum 100% control of the CSE-listed Multichoice (MCC). The stock remains suspended pending the outcome of the threat by LTV to dump its stake in the company following the resignation of its three directors and the notice that it will cease to provide its content through the Multichoice platform from 2010 onwards.

LTV is offering MCC shareholders the option to buy their MCC shares at 18c cash (the price prevailing before the suspension), or swap two new shares of LTV for every nine shares of MCC, or a combination of both.

The only restriction is that the bid is valid only in the event that the Competition Commission declares the exclusive deal between LTV and MCC as anti-competitive, thus null and void.

"Following the Competition Commission raid of our offices, with whom we cooperated fully, we received assurances that they will give a timely opinion on our deal with both MCC and CyTA."

With LTV holding a direct 10.98% stake in MCC, and another 16% through its minority holding in Multichoice Holdings, which in effect is controlled by its former allies, the Dutch NetMed with its own stake in the company, LTV is seeking to mop up the remaining 39% of MCC held by the 15.000 small shareholders, the majority of whom are LTV/Alfa subscribers.

"This is the best exit for the MCC shareholders now stuck in MCC, which has been suspended and has an uncertain future, following our decision to terminate our content agreement in 2010," said Avraamides.

Flanked by Marios Hadjiyannakis, the Manager of Egnatia Financial Services, advisors to the deal, Avraamides said that LTV, which has secured the Cyprus SEC approval to publish its prospectus, may decide to list its shares only on the CSE, instead of the original plans to seek a dual listing on the CSE and ASE.

Based on the swap ratio of two LTV for every nine MCC, the LTV shares are valued at 81 cents, provided that the deal proceeds since it is subject to the Competition Commission declaring the exclusive deal with MCC as irregular.