According to HN daily, the Legislative Council of Government (LCG) gave its approval yesterday to new law on terminating analogue broadcasting and starting digital broadcasting, expected to be implemented during 2010. After analogue broadcasting ends, licenses would be awarded to anyone who applied for them. Before that, Czech public TV would have 4 digital licenses and Prima and Nova would get one compensation license each. In addition, LCG wants to award temporary licenses to the six stations that initially won them and later lost them. LCG will submit the draft of a new law to ministry. The new digital stations do not expect to begin broadcasting until spring 2009 at the earliest.
Our view: We believe that the threat of new entrants after 2010 should not be overestimated, given the experience of limited growth of small TV players already present on cable and via satellite. We believe that digitalisation offers CME new opportunity with regard to launching thematic channels and increasing its ads inventory. Please note that CME would have a say on the final shape of the new bill, otherwise the station seems to be capable of blocking the bill’s introduction in courts, similar to awarding six digital licences before. We expect a neutral impact of the news.