Venezuelas Cablevision Plans Expansion

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Caracas, Venezuela -- An aggressive newcomer to
Venezuela's wireless-cable business plans to launch in seven major markets beginning
in July in an effort to expand both its geographic and demographic reach.

Cablevision will expand outside of its current home here
and into seven major cities, said Fernando Fraiz Trapote, who bought the company last
year. The markets are Valencia, Maracaibo, Maracay, Barquisimeto, Puerto La Cruz, Puerto
Ordaz and Margarita Island.

Cablevision will get a hand in its expansion from one of
Fraiz's other businesses, Vepaco, the country's biggest outdoor-advertising
company. Cablevision could, for example, use Vepaco's properties to trumpet its move
into new markets.

Fraiz paid $5 million for Cablevision, according to one
industry source, although Fraiz declined to comment on the purchase price. The company has
15,000 subscribers here, along with a reputation for poor picture quality, which it aims
to overcome as it moves to digital transmissions.

Cablevision is getting a $4 million makeover with new
digital equipment from Minneapolis-based ADC Telecommunications Inc., an equipment
supplier to the telecommunications and cable industries.

The upgrade will replace Cablevision's plant, which
has not been updated since it was founded in 1988, Fraiz said. ADC's
microwave-systems division will provide services such as turnkey engineering, installation
and training.

Cablevision aims to compete with entrenched cable and
direct-to-home satellite companies by targeting what Fraiz believes is a neglected niche.

"Pay TV is seen as an elite product, and in Venezuela,
most people can't afford it. We're going mass-market," he said. This means
targeting the "C" and "D+" demographics, which will be offered
programming packages ranging from four channels to 20.

The packages will sell for between $16 and $35 per month.
Fraiz hopes to garner about 150,000 subscribers within a year.

Inspiration for the scheme stems partly from Mexican
wireless operator MVS Multivision, which is pushing its own low-cost, a la carte
programming to demographics that were considered unable to afford other pay TV options.

In fact, two former Multivision executives have joined
Cablevision: Humberto Sanchez is Cablevision's vice president of operations, and
Ruben Vacome is the company's marketing director.

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