Yuriy Stets and Petro Poroshenko
Officials decided it was time to split up the last major state telecom operator. After the fixed-line monopoly Ukrtelecom was privatized in 2011, the state had another infrastructure legacy left in reserve – the Concern of Radio Broadcasting, Radio Communications and Television.
The concern controls more than 99% of television broadcasting in Ukraine. It unites 27 enterprises and branches located in regional centers and large cities, and services a network of 560 of its own television towers. Its services are used by analogue channels, digital TV provider “Zeonbud”, radio stations, and telecommunications companies.
Ownership of the KRRT infrastructure effectively gives technical control over 7.64 million television subscribers. These are Ukrainian households that receive signals via antennas in analogue and digital form.
It is important to emphasize that about 9 million more households receive television signals via cable or satellite. This is also a significant share of the population. Therefore, it cannot be said unequivocally that with the help of the concern one can manage the entire information policy of the country. We can talk about less than 50% of indirect control of television space.
And yet, this is more than enough for “fighting” to begin in the Cabinet of Ministers for the position of head of the concern. And they almost led to the dismissal of the general director of the enterprise, Alexander Pivnyuk.
Blitz-krieg of Stets and Zverev
This week, a government commission urgently created by Prime Minister Arseniy Yatsenyuk completed its work. Her task was to quickly check whether the actions of the CRRT leadership would harm the country’s national security.
It all started with the fact that Yuriy Stets in early February on his Facebook page accused the general director of the concern, Alexander Pivnyuk, of practically treason. He wrote that Pivnyuk, as well as his subordinates, allegedly contribute to the spread of television signals from Russian television channels and television channels of the self-proclaimed people’s republics to temporarily occupied territories, and sabotage the distribution of Ukrainian channels.
“Until recently, a number of his employees maintained television towers in the interests of the separatists… Moreover, these people were paid salaries. Under the clear leadership of Pivnyuk,” Stets assured.
The State Administration of Special Communications and Information Protection, to which the CRRT is subordinate, responded that television towers in Donetsk, Lugansk and two other eastern cities are not controlled by Ukraine. Therefore, the management of the TV company does not have access to them, and they cannot be responsible for the resumption of broadcasting of Ukrainian channels.
It is noteworthy that the remaining objects in the occupied territory in the east, according to the head of the State Special Communications Service Vladimir Zverev, manage to broadcast both Ukrainian and Russian channels. “This is Pivnyuk’s art of reaching an agreement…” says Zverev.
According to Grigory Shverk, a member of the National Council for TV and Radio Broadcasting, the regulator had no obvious complaints against Pivnyuk. “In matters that directly related to our cooperation, for example, preparations for the transition to digital TV, all our requests, as a rule, were processed,” he emphasized.
History is still silent as to what conclusion the commission ultimately came to. Zverev tells the EP that he is not personally familiar with the report on her work. But, nevertheless, last Wednesday he said that the facts of financing the broadcast of Russian channels have not been confirmed.
Stets managed to write on Facebook at the beginning of the week that the Cabinet of Ministers dismissed Alexander Pivnyuk from his position, appointing an acting deputy in his place. – First Deputy General Director Vladimir Ishchuk. Although the State Special Communications Service says that Pivnyuk was only suspended for the duration of the investigation.
On Thursday it became known that the manager wrote a letter of resignation of his own free will.
As Zverev said, Pivnyuk lost faith. “After the strife, it was possible to get down to business, but it didn’t work out,” he laments.
Pivnyuk told the EP that the dismissal is his personal matter. According to him, the government commission did not find any crime in his actions. The issue of Pivnyuk’s dismissal will ultimately be decided by the Cabinet of Ministers next week.
Zverev does not yet know how long the company will not have a permanent manager. “Everyone in the place is looking at it, thinking that it’s a red button for TV, but that’s far from the case,” says the official.
He predicts that the new boss may be brought down from above – from the Cabinet of Ministers. In addition, there is the option of appointing a young and ambitious specialist from the enterprise team itself. The head of the State Service for Special Communications even admits that the CRRT could be headed by a foreigner. For example, a Pole or Czech with experience in an enterprise of this kind.
Stets, according to him, also does not yet have an obvious candidate in mind. In general, it doesn’t matter who it will be, the minister believes, as long as they work according to the law and honestly.
Stets would also not want to reassign the enterprises of the Ministry of Information Policy. At least that’s what he says.
How much does the TV concern earn?
The new head of the TV concern will have a hard time. After all, he will need to quickly solve the accumulated problems of the enterprise before its economy collapses.
The concern itself, without political overtones, can become a completely successful business. Last spring, the company’s trade union, which came into conflict with management, announced some figures for the profitability of this enterprise. It turned out that in 2013 its turnover was about 650 million UAH.
The majority of earnings come from TV channels – UAH 400 million, radio stations – UAH 170 million. “Zeonbud” allegedly pays 80 million UAH for rent. However, these are unofficial figures. Although, in a conversation with EP, Pivnyuk confirmed that more than 60% of the income actually comes from servicing the analog signal of TV channels.
Zverev added that earnings did not change much in 2014, and the company even managed to reach a minimum profitability of 2%, primarily due to increased tariffs.
Left with nothing
The state television concern never managed to survive the metamorphoses that could have allowed it to stay afloat in the future.
As one of the representatives of the State Service for Special Communications told the EP, a year and a half ago, the KRRT even hatched a plan to begin active work in the telecommunications services market. “It was planned to invest UAH 600 million in the development of fiber optic lines to TV towers. This would make it possible to install base stations on them for data transmission and compete in the Internet access market with private players,” he says. But there was no money to reconstruct the network.
At one time, the Cabinet of Ministers even wanted to put the concern up for privatization. But experts convinced us not to do this. After all, the object is strategic. Although there were potential buyers.
For example, “Ukrtauer”, which is engaged in the construction of towers for mobile operators. It is a subsidiary of the Turkish telecommunications holding Turkcell, which owns life:)
The head of Ukrtauer, Zafer Ozbay, told an EP journalist several years ago that this would be a good purchase.
But, unfortunately, the state has not fully decided what to do with the country’s TV infrastructure. By the end of this year, his financial situation may be greatly shaken. Both Zverev and Pivnyuk admit this.
According to the norms of the international agreement “Geneva 2006”, from mid-June the National Council will begin to slowly turn off analogue broadcasting in some areas. And the channels, in turn, will begin to refuse analog signal distribution services. But you won’t earn much by distributing Zeonbud’s digital services.
All attempts by the state concern to build its own alternative digital broadcasting networks to Zeonbud, at least for state channels, have not been successful. There are no funds in the budget for this, and it is difficult to attract loans for such purposes. Therefore, it may well turn out that 2015 will be the beginning of the end for the country’s largest state-owned television enterprise, which simply has no place in a rapidly changing world. The towers need to be constantly repaired, covered with special expensive paint, and employees need to have their salaries raised so that they don’t run away.
At first, the concern’s income from the distribution of analogue TV can only be saved by a temporary delay in Ukraine itself in the program of transition to digital.
As National Council member Oleg Chernysh told the EP, the border regions will be the first to be disconnected. Mainly Western. “But the heads of the regional branches of the concern recently shared with us data that in these areas Zeonbud’s digital network provides only 50-70% coverage, which is not enough to turn off the analogue,” he notes.
In addition, according to Chernysh, the regulator does not yet have accurate data on how many digital receivers the population has in their hands. According to opinion polls, this figure is 1.5 million units, and according to suppliers, it is already 4.8 million units. Therefore, most likely, analogue transmitters will continue to operate in border areas until Poland, or Romania, or some other country declares that a technologically backward neighbor is interfering with them.