On January 30, Argentina launched its first telecommunications satellite, Nahuel I, from the Arienspace launcher in Kourou, French Guiana, to replace the Nahuel C1. After the government published the airspace regulations, the satellite service companies of the United States formally express their displeasure at what they consider a protectionist and monopolistic treatment towards Nahuelsat S.A., a company formed by the consortiums: local group - BISA (Bember Grupo), Banco Provincia, Publicom S.A. (Telecom Argentina) Antel (Uruguay), regional group GE Capital Global Satellites Inc., Lampenbank International, and IFC (World Bank group) and original consortium formed by Daimler Benz of Germany, Aerospace of France, and Alenia Spazio of Italy. The latter group obtained the license for satellite operations with quasi-exclusivity of satellite airspace until 2007.
Of the total investment of 250 million dollars, including the estimated launch cost between 60 and 80 million dollars, the local group has invested 35.25 million, the regional group 33.75 million and the original consortium 31 million.
The company Nahuelsat S.A. operates since 1993 using two satellites leased to Telsat of Canada which have already been returned to the country of origin after the closure of the company that marketed them, Paracome Satellites. Nahuel C1 and C2 customers have been transferred to Nahuel 1, which will transmit data, direct-to-home television (TDH), telephony and interactivity, in KU band through 18 transponders throughout the Latin American continent from Tierra del Fuego to the southern United States. The company Nahuelsat will do everything possible to prevent North American satellites that for more than a year have wanted to offer TDH services in Argentina (Galaxy and Sky) from doing so independently until the license granted by Comfer expires. According to Decree 92/97 that corroborates resolution 14/97, all satellite signals must go down in Argentina and up the Nahuel until the aforementioned date.
For the executive director of Nahuelsat, Eckart Schober, the measure is not protectionist: "We, Daimler Benz, Aerospace and Aerospatiale and Alenia Spazio, won the tender and invested a lot of risk money to meet the requirements of the Argentine government, so we now demand the protection and rights we deserve." Schober also explained that important agreements have been signed with telephone and satellite companies to support applications and expand the service, including Telecom of Argentina, Embratel of Brazil, Paraguay, Uruguay, etc. A cooperation agreement has been signed with Mexico, for example, with the Solidaridad satellite and with Spain with Hispasat for future transmissions in Europe.
"As is obvious, after the effort and investments made by our group, we will demand that everyone who wants to provide TDH services will have to lower the signal in Argentina and comply with a series of requirements set by the government, as we do," continues Schober, "If any of these companies wish to negotiate, we are open." The Nahuel 1 satellite will also provide TDH services to Brazil with antennas of 50 to 60 centimeters in places where antennas of one meter in diameter are being used. All Argentine provinces will also be included without considering whether they are profitable or not, unlike other projects where it is only offered to populations of high concentration.
Enraged foreign programmers
To the protest of the satellite companies has been added that of the foreign programmers enraged by resolution 14/97 of the Ministry of Communications and Executive Decree 92/97 by which it is required that all programmers who want to transmit their satellite signals to Argentina must have a physical and legal presence in the country where, according to sources in the Secretariat, they could be legally controlled, fined or prosecuted if they violated the laws of the Comfer and would pay taxes to the Argentine treasury.
The Argentine authorities claim that this regulation is a copy of the US regulations and that they must be applied to defend Argentine rights because previously cablers have been unfairly fined for broadcasting adult films in the hours of minors, when in reality they have no control over those who send signals such as HBO or any other.
"What happens," says a Comfer source who prefers not to give his name, "is that programmers want to have 10 parts of the cake and not share with anyone; they are making a lot of money and have a market with 30 million households. We only ask them to leave a part of the pie through taxes and their presence in Argentina and keep 9, but they don't like this." The satellites that currently operate in Argentina, PanAmSat and Intelsat, will be able to continue operating until the end of their contracts and in some cases when they wish to change bands they will have to comply with the new regulations. Among those who have signed the official protest are Pan American Satellite Corp., Orion Network Systems Inc. and Columbia Communications Corp.
Like TDH providers, local cablers, broadcasting associations CADIÁA, ATVC and ATA and the Motion Picture Association also protested. Faced with so much complaint, the Argentine government promised a review and reform of some aspects in March; two months later, nothing has yet been reformed.
The Argentine cable is on fire
If 1996 was an interesting year of mergers and acquisitions for cable, 1997 promises to be even more interesting with the expansion ambitions that all cablers proclaim. To make the year interesting are the creations of the two new MSOs: Supercanal in the northwest of the country and the Mandeville in the south of the province of Buenos Aires. These two plus the existing VCC, CV-TCI and Multichannel, promise a year of expansion and unparalleled competition.
The Supercanal Holding, owned by the Cuban Jorge Mascanosa, and the Grupo Uno of Mendoza (of the brothers Daniel and Fredy Vila) with more than 20% of Multicanal (Clarín group), already total about 200,000 subscribers and have announced negotiations with other cables. Shortly after the formation of Supercanal, the North American group Hicks Muse Tate & Furst, began heavy investments in 150 radios and other non-TV businesses, ending with investment in cable.
The new consortium Grupo HM3 was then formed with the old cable companies, which were bought by them in the province, the fifth MSO or Mandeville that already boasts 250,000 subscribers, and as its executive director Julio Gutiérrez says, wants to reach 700,000. So far the cables have been purchased between 600 and 900 per subscriber, a price considered high among specialists.
It is worth mentioning the Multichannel giant that during the last year bought numerous small ones and made large investments to place itself at the head of the MSOs, with more than one million subscribers, including its minority stake in others. Multicanal is not afraid of newcomers or their economic power, as their intention to expand continues and executives say their financial situation is healthy and powerful. The Comague excable was bought by the owners of Telecom in Argentina – the powerful Perez Company and France Telecom – both great influencers in the world of telecommunications. The cable now called Norcable has not made significant purchases but the decisions of the big ones are expected for future mergers.
Finally, there remains the unknown of CableVision and VCC, which have many without falling asleep. (See note below). Until this is made public the unknown continues.
Two cable giants will join
Negotiations between the two major Argentine cables CableVision- TCI and VCC (Video Cable Comunicación) for their near merger, have advanced one step further. According to the Argentine press and sources from both companies, an official letter of intent has already been signed between the two for Fred Viera, of TCI, to buy 39% of VCC from Samuel Liberman.
The directors of institutional affairs of both companies told TV&Video Latin America that they could not confirm why TCI is a publicly traded company and cannot comment until the presidents decide to make the decision public. Liberman, who currently owns 50% of VCC's shares in partnership with U.S.-based Continental, which in turn was bought last year by U.S. Baby Bell US West, would agree to the sale of this percentage of Fintelco, the name of the holding company. VCC has about 700,000 subscribers and CableVision-TCI about 600,000. Together, then, they would make up the strongest operator in Argentina.
