Show Indicates Hot Times in Mideast Pay TV

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Dubai, United Arab Emirates -- The Middle East pay TV
market is full of action, illustrated by the spate of activity at the recent 6th
Middle East International Cable, Satellite & Broadcast Exhibition (CABSAT 2000) trade
show here.

Both equipment suppliers and distribution platforms were
busy at the show, which saw attendance rise a healthy 25 percent from last year.

Hardware vendors said they were upbeat amid increased sales
of digital set-top boxes, which have higher profit margins than analog equipment.

But much of the action came amid dueling by two local
distribution players: telco Etisalat and state broadcaster Dubai Television.

Over the past two years, Etisalat has played up its plans
to test-launch a digital-cable platform named "E-Vision" to 20,000 homes in
Dubai and the United Arab Emirates' capital of Abu Dhabi. However, E-Vision has yet
to launch.

Dubai Television, seeking to one-up those plans, announced
that it has its own plans to test a 6-channel digital-terrestrial pay TV (DTT) system. It
aims to commercially launch a 30- to 36-channel DTT platform in about six months.

For the past decade, Dubai TV has operated Dubai Cable
Vision, a 10-channel analog wireless pay TV system. It intends to migrate those
subscribers to the DTT platform.

Dubai special advisor on broadcasting Riyad al-Shuabi said
Dubai TV aims to migrate current subscribers to the new platform due to its better
transmission quality and ability to reach a 25-mile radius around the city. The broadcast
radius is key because of the adjacent large populations it could reach in the neighboring
emirates of Sharjar and Ajman.

Dubai TV chief engineer David Boxall said the company is
using DiviCom Inc. and Hirschmann Group transmission equipment, along with set-top boxes
from Nokia Corp., to test the DTT platform.

Rival E-Vision's general manager, Humaid Sahoo, said
his system will pass "a total of 100,000 homes by the end of the year 2000." But
at least one local industry executive questioned that forecast, noting that the platform
still has a number of technical and supply issues to resolve.

Sahoo, however, said that in addition to the "many
channels that are on board, discussions are progressing well with other channels and
program providers to finalize our product offerings."

Etisalat declined to identify the channels, but it
confirmed that the platform will create two channels of its own in the documentary and
kids' genres. Bloomberg Television is the only channel that confirmed a carriage
agreement with E-Vision.

E-Vision represents a major dilemma for all direct-to-home
players in what is now an increasingly confused market, with Robert Lakos, who represents
EchoStar Communications Corp. in the region, suggesting, "This confusion extends to
would-be subscribers."

Additionally, most content owners have struck exclusive
distribution contracts, either for DTH satellite or terrestrial retransmission.

In other words, E-Vision has to go cap-in-hand to existing
rights-holders for the more popular channels, with no great enthusiasm by Orbit Satellite
Television and Radio, Showtime Networks Inc. or others to "give away" their key
channel assets.

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