Zeonbud’s debts are posing a threat to the transition to digital television

Zeonbud’s debts are posing a threat to the transition to digital television
Photo: Ivan Chernichkin

The operator of the only network of digital television in the country Zeonbud owes around UAH 80 mn to the state-owned Broadcasting, Radio Communications & Television Concern (BRT Concern) for the use of TV towers, a source in the BRT Concern told Capital. The source claims that the digital monopolist has not been paying the state-owned company throughout the whole year. Head of the National Television and Radio Broadcasting Council of Ukraine (NTRBC) Yuriy Artemenko and General Director of BRT Concern Oleksandr Pyvnyuk spoke about Zeonbud’s debt to the concern last week. However, they did not specify the amount of the debt. «There is a debt, but I will not specify the amount. This is between the two companies,» Pyvnyuk told Capital.

Debts cause debts

Spokesman for the concern Oleh Vasylyk informed that Zeonbud owes BRT Concern for services provided on the placement of the former’s equipment on the TV towers of the latter. «Zeonbud’s equipment, which consumes electricity, is practically on all of our towers,» he said. Noteworthy, BRT Concern is Ukraine’s largest television and radio broadcasting network (over 500 towers and 80 TV stations).

Zeonbud stopped paying the state-owned company practically right after the majority of Ukrainian TV channels refused to pay the digital operator for distribution of their signal. 1+1 Media, StarLightMedia and other TV channels have not been paying the monopolist for over six months. Only Rinat Akhmetov’s Media Group Ukraine and the 112, Eskulap and Xsport channels continue to fulfill their obligations to the company. On average, every Ukrainian national TV channel must pay Zeonbud UAH 1.6 mn per month for the distribution of its signal. The BRT Concern is aware of the difficult relations between the digital monopolist and broadcasters. However, their relations should not affect the cooperation of Zeonbud with the concern, says Vasylyk. «We and Zeonbud are two commercial organizations conducting business. Zeonbud has obligations to us and must fulfill them. We are not a charity organization,» the concern’s spokesman emphasized.

Digital television under threat

Capital’s source said that at the moment the concern is communicating with the debtor via correspondence with demands to repay the debt and warnings about possible suspension of the provision of service to Zeonbud’s network. It is also possible that the state-owned company will file a lawsuit against the digital operator.

If the BRT Concern stops servicing Zeonbud’s network, digital television will seize to operate in Ukraine as Zeonbud is the only operator of a digital network in the country. Despite the statements of the concern, representatives of the NTRBC are hoping that it will not come down to this. «We have no relation to their dispute, but I am convinced that Zeonbud will repay the debt to the concern,» said NTRBC member Hryhoriy Shverk.

As a reminder, last week the NTRBC announced its plan of transition from analogous to digital broadcasting. In particular, during the first stage (until June 15, 2015) analogous television will be turned off in the Kyiv, Chernihiv, Zhytomyr, Rivne, Volynska, Lviv, Zakarpattya, Kharkiv and Sumy oblasts and Crimea, which was annexed by Russia.

During the second stage (until December 2015), analogous television will be discontinued in the Ivano-Frankivsk, Khmelnytskiy, Vinnytsya, Chernivtsi and Odesa oblasts and during the third stage (until June 30, 2016) — in the Poltava, Ternopil, Cherkasy, Kirovohrad, Mykolaiv, Kherson, Dnipropetrovsk and Zaporizhzhya oblasts. During the last stage analogous television will be turned off in the Luhansk and Donetsk oblasts (by 2017). That is why the operating capacity of the digital network is extremely important for the country. After all, the population must have an alternative source of receiving a TV signal.

In the interests of the director

It is very important for the current senior management of the BRT Concern to collect the debts by the end of the year. Head of the State Service of Special Communications and Information Protection (BRT Concern is subordinated to it — Capital) Volodymyr Zverev said in case of an unsatisfactory annual report of the director of the concern Pyvnyuk may be dismissed from his position.

«I can only make decisions based on the results of the year. If they are positive, he will hold his position. If he does not resolve the situation, the Cabinet may dismiss him,» said Zverev, adding that the government receives monthly indicators of the concern. As a reminder, Pyvnyuk was appointed to head the BRT Concern in April 2014. Before his appointment, Kostyantyn Zakharenko was the acting general director of the concern.

Noteworthy, the BRT Concern is currently the main potential competitor of Zeonbud. The state-owned concern makes money mainly from the servicing of analogous channels. If they are turned off next year, the role of the concern will decrease and it will be forced to downsize half of its staff. That is why the concern announced this year its intention of building two of its own digital networks against the four networks of Zeonbud. However, the concern’s gloomy financial state and its debts are preventing it from implementing the project.

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