Argentinas Small Operators Try Teamwork

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Buenos Aires, Argentina -- A group of independent Argentine
cable operators has started a grassroots campaign to create an alternative MSO to the
country's two powerhouse system companies, Multicanal and Cablevision/TCI

The new quasi-MSO, Red Intercable, aims to suit the needs
-- and reduce the expenses -- of operators that are unable sell their holdings to the
larger MSOs so that they can survive in a competitive market.

Red Intercable is the spinoff of a buying cooperative for
operators called Sociedad Argentina de Television por Cable (SATV), which was originally
the commercial arm of the Argentine Cable Television Association. It is loosely modeled
after Mexico's Productora y Comercializadora de TV por Cable (PCTV), which does business
on behalf of most Mexican operators outside of Mexico City.

"If we had been able to gather the independent systems
three or four years ago, things would have been different," Red Intercable president
José Toledo said. "Many operators would have not sold out. The business is still
good, but we have to face it together if we want to survive."

The original SATV met two roadblocks that proved difficult
to overcome.

First, the philosophy of Argentine cable operators is very
different from that of their Mexican peers. In Argentina, small operators are reluctant to
hand the decision-making over to others, while Mexico's PCTV is cohesive and a strong
negotiator.

Second, the consolidation of systems in Argentina in recent
years resulted in the creation of the two large MSOs, which have about two-thirds of the
country's subscribers and which don't need a cooperative to attain favorable rates with
suppliers.

So, the independent cable operators affiliated with SATV
decided to set up their own shop by forming Red Intercable. Its members pay a monthly fee
and abide by the group's regulations.

In September, a group of members started visiting the 600
to 700 small operators across the country, which are largely overlooked by cable networks
and the government, although they are legal.

Red Intercable general manager Dario Santini and spokesman
Diego Gramigna said the organization aims to provide a programming package suited to the
real needs of independent operators, at a reasonable cost. Usually, independent operators
pay much more per subscriber than the large MSOs do. This results in some of them having
to pay as much as 50 percent of their gross revenues to programmers.

By late October, Red Intercable had signed up some 150
systems covering 250 cities. About 60 more were still discussing the terms, and a sizable
number of other operators had shown interest in the group. The number of subscribers
served by the 150 initial affiliates is estimated to exceed 200,000. The largest system
has 11,000 subscribers, while the smallest ones have about 70.

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