Argentinas TDH Aims to Cross Andes

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Buenos Aires, Argentina -- Argentina's only
direct-to-home television provider, Televisión Directa al Hogar (TDH), is about to cross
the Andes to offer its service to Chile.

'We are about to get permission to operate in Chile
and in the near future we hope to insert ourselves in southern Brazil, Bolivia and
Paraguay,' said Alfredo Vila, president of Argentine multiple system operator (MSO)
Supercanal, which has a 60 percent stake in the company.

In its home territory, where it has exclusive operating
rights to the Argentine satellite Nahuelsat, unrivaled TDH has only managed to garner
10,000 subscribers -- 14,000 short of the 24,000 it predicted for 1997.

TDH's expansion into Chile does not mean it is giving
up on Argentina, Vila insisted. Rather it is an initiative to expand into neighboring
countries while the Argentine market grows. It still hopes to gain 230,000 subscribers by
2003.

In addition to Mendoza-based Supercanal, U.S.-based Latin
American Satellite Entertainment (Laser) and the Argentine investor group G3 also hold
stakes in TDH.

Felix Danziger, cable analyst for Merrill Lynch Argentina,
said that the high penetration of cable TV in Argentina (about 55 percent), and the
relatively low income in the rural areas that DTH television targets here, have reduced
the short-term possibilities for companies like TDH.

The slow subscriber uptake has not put off imminent rivals.
The Clarín Group, which has a 20 percent stake in Supercanal, has already committed
itself to developing DTH here, and last year became the local partner of Galaxy Latin
America (GLA), a pan-regional DTH platform.

Danziger of Merrill Lynch suggests that,
'direct-to-home players are encouraged by the success of cable TV here. Since there
is no room for another big player in that area, in the future direct-to-home may come up
with offers to lure subscribers away from cable as they have done elsewhere.'

Still, neither GLA nor its pan-regional rival Sky Latin
America, which has also expressed interest in Argentina, can operate here until the
Argentine and U.S. governments sign a reciprocal satellite agreement. They are expected to
do so sometime this quarter.

Such an agreement would allow U.S. satellites to operate
here, and give Nahuelsat -- Argentina's only satellite -- landing rights in the U.S.
A similar agreement was signed by the U.S. and Mexican governments in 1996. 'If a U.S
company wants to come here using its own satellite, we must have the right to offer our
services there, through Nahuelsat,' said Vila.

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