During the last Nextv Series Andean’s virtual edition, Eduardo Stigol, CEO at Inter Venezuela & TuVes HD, starred in the one-on-one session ‘The new Venezuelan pay TV and the enduring strength of DTH in Latin America’. There, the executive reported that 75% of the market in the country is made up of already digitized DTH and cable operators, and said that DTH is a product that ‘still has a long life in rural areas of Latin America’.
In relation to his point of view about the current situation of the Venezuelan pay TV market and the changes that have taken place during the last 12 months, Stigol reported that ‘the last year and a half has constituted a new stage in Venezuela, where something started to be rebuilded’. Later, the executive explained that ‘Venezuela is going through a crisis but, in recent times, and with the help of Conatel (Comision Nacional de Telecomunicaciones de Venezuela) and Sundde, an entity that depends on the Commerce Ministry and takes care of interests of clients of any service, it started to be understood that an industry that invests in technology and fiber optics could not continue to subsist on penny-dollar rates. In Venezuela, rates were lowered a hundredfold. We went from charging between USD 25 and USD 30 of ARPU for a service, to charging between 15 and 20 cents. Those were the rates for quite some time’, explained the executive.
Later, Stigol stated that ‘during all that time, the Venezuelan industry of any service had no investment and there was no maintenance of the networks. However, during the last year and a half, it began to be understood that, to survive, it was necessary to offer products for a more premium audience, and other very social products, because people earn very basic wages in Venezuela, which they will not allow making an increase in rates. So, you had to take care that people continue to hire services, and generate the increase in ARPU in some other way. We are in the middle of this process, which is going very slowly. The economy is evolving slowly in Venezuela. There are many things already dollarized, but services in clients’ homes are among the most difficult to increase their prices, because they are a mandatory expense for families. Services are much more behind in relation to the rest of the country, but Venezuela is becoming dollarized little by little. Any item bought for households is valued in dollars, very similar to any other country in the region, but telecommunications services do not’, he said, and later explained that ‘new companies, such as FTTH ISPs, began to come to Venezuela, as it happens in all the rest of Latin America. At first, it was a problem for large operators, because the Government regulates our rates a lot, it does not allow us to raise them, and small operators appeared that charged what they had to charge to be able to invest. And the Government did not have the ability to be behind all these operators. And it decided to slowly increase the rates for the service we were providing, but if we invest in FTTH and provide a new service based on this technology, they would allow us to charge as the new companies that come to the country charge’, reported the executive. ‘In addition, DirecTV left the market, and that caused a lot of damage to the networks of all cable operators’. As a general evaluation, Stigol reported that ‘we had to adapt ourselves and it was a very busy year. The process is slow, but I think that in about a year and a half more, we are going to have the rates of the sector at a level that will allow companies to continue reinvesting and maintaining the networks in a consistent way’.
Regarding DirecTV’s exit from the Venezuelan market and its relaunch under a new brand, Stigol said that ‘DirecTV had to leave the country because it had a conflict in which the US Government established that the company could not broadcast certain channels, because they belonged to sanctioned entities or people. The Venezuelan Government, in turn, established that it was mandatory to broadcast these channels and that, otherwise, they would not have the license available. And DirecTV decided to follow the laws of the US and leave Venezuela. And in the country there were no resources to supply all the people who were left without DTH service. And, after a few months, the service is reestablished as ‘Simple TV’, which uses the same infrastructure as DirecTV, with a franchise system. But they use other rates. With which, they lead the future of the rest of the market, with very low rates, intermediate rates, and high, for HD services, premium, and others. Somehow, it put the rest of the operators in a position to have that goal. The regulator did not allow all operators to charge those levels of rates, and we are in this process, which is slow. The same thing happens in internet services: little by little they are trying to recover the rate that they historically had in dollars, but it is a very slow process. But it is a path that began and does not stop, and that is also encouraging for operators.
Regarding the process of digitizing HFC networks in Venezuela, Stiglol reported that ‘the largest operators are on the way to total digitization, and small operators are unable to make that investment’. In addition, the executive said that ‘75% of the Venezuelan market, or more, is made up of digitized DTH or cable operators. There is a large part of the Venezuelan market that is already digitized’. In addition, Stigol gave his point of view in relation to how the issue of ISPs deploying FTTH to set up a pay TV service in Venezuela is taking place, and reported that ‘FTTH networks are a great solution, because they do not depend on the electricity supply, and that guarantees a continuity that cable networks cannot provide’. In addition, the executive said that ‘our industry has changed so much, and OTT is a feature that will have to grow. In turn, the ISP model is going to grow very fast, because they need a video product to have a competitive offer with a dominant player that provides both services (internet and pay TV), and they, only with internet, feel that are lacking in the TV offer, and can choose to offer a third party TV service’.
Stigol has also expressed himself about how the TuVes operation is currently being handled, and explained that ‘we are in the Dominican Republic; in Panama (Cable Onda); in Colombia (there is a company called ‘Click’); we have clients in Ecuador; our own operations in Bolivia and Chile; clients in Uruguay; we have other competitors of ours in Bolivia to whom we offer our services; and DTH is a product that, in areas rural areas, it still has many years of life in Latin America, for several reasons: first, because high-speed internet will take many years to reach those areas, and also because of the slow migration to new technologies’. He also argued that ‘mass migration to an OTT solution will not be overnight, but will be a path. In urban areas, in large cities, in a certain age group, there is no doubt that it will be the first option. DTH still has a long life, but it is necessary to understand that thinking that it will be a leading technology in large urban centers (for example: Buenos Aires, San Pablo or Santiago de Chile), where there are FTTH and competitors offering bundles, that will be very difficult’.