Estonians skeptical over digital TV

  • 2006-05-24
  • By Kairi Kurm

GLUED TO THE TUBE: Although Estonia is known for being high-tech savy, they are slow to make the digital TV switch.

TALLINN - Although Estonia is widely known as an e-country, it seems to be stuck in its digital TV development. Whether it's a fear of new competition or lack of technology, television channels aren't in any hurry to push ahead. According to EU recommendations, member states should switch to digital TV technology by 2012. Finland has already made arrangements for the transfer in autumn 2007, and Sweden for 2008. Even Latvia and Lithuania are a few steps ahead of Estonia, although not by much.

Neither of Estonia's two locally private TV channels, nor its national station produces digital programs. Rather, they are transmitted in analog formats, without the functions that digital TV is supposed to offer.
Digital technology provides a more efficient way to deliver television than with analog transmissions. It enables the same services to be delivered in less space with greater clarity. The signal either reaches the customer or does not reach them at all. With analog signals, people often see poor-quality pictures.

In Estonia, digital transmission is offered by Starman cable-TV networks and Elion's ADSL2+ networks, as well as Viasat's satellite transmission and Levira's Digital Terrestrial Transmission.
"When the latter two are left out, then the share of households watching digital TV is very marginal.  I would estimate the figure of clients to be well below 10 000," said Henri Treude, marketing director at Starman.

What's the big deal?
With digital transmission, sound and pictures are converted into a digital format and compressed, using as few bits as possible to convey the information on a digital signal. This technique enables several television channels to be carried in the amount of space that analog signals use for one channel. Thus, this form of production is much cheaper for broadcasters.
Although the process is coming along slowly, more and more Estonians are making the switch. According to Ain Parmas, spokesman of Elion, 5,000 customers joined the digital TV campaign last month.
"The main thing is that digital TV allows for many more channels," said Mike Butcher, a freelance technology writer at The Financial Times. "High Definition TV (HDTV) will come along and take up more bandwidth, so that there may end up being less digital channels but the picture quality will be amazing."

Ainar Sepp, technology director at the national station ETV, told The Baltic Times that people would greatly benefit from digital TV's convenient features. By autumn this year, Elion, an Estonian fixed-line operator, is planning to start providing a digital Video on Demand service, which means that clients will be able to choose films and programs from menus on their TV screen and watch the newest music videos. With certain TVs people can also record their favorite movies on hard discs while they are away and continue watching in real-time as they return. Starman, a cable network operator, offers a similar service.
By the end of this year, digital TV and super-high-speed Internet connection will be provided to every town and to about 100 larger locations in Estonia, reaching approximately two thirds of all Elion Internet subscribers, said Ain Parmas, a spokesman for Elion.

However local TV broadcasters are hesitant to "go digital," and will continue to be as long as Estonians lack the necessary equipment - either a digital box or modern TV - to accommodate digital transmission. According to the abovementioned estimates, Estonia only has about 10,000 people with digital-accessible equipment. In comparison, the U.K. has approximately 15 million people with such technology. Urmas Oru, director general at Kanal2, said that it was up to Levira, Estonia's largest radio broadcaster, to determine when, how and by which conditions local TV channels can broadcast their programs digitally.
"It is not a one-sided topic," said Oru. "We need a decision on the governmental level about how to proceed. Everybody needs to be ready 's the broadcasters, the customers, the government. We need to go in one rhythm. We also need a network. There is no equipment to transmit programs outside Tallinn."

Levira is the only broadcaster in Estonia that serves its three analog TV networks. Once the Estonian Broadcasting Transmission Center, Levira was privatized in 1997 and is now owned partly by the state (51 percent) and the French telecom and broadcasting company, TDF (49 percent). Since switching from analog to digital is a huge investment, and because broadcasters will have to incur the costs of transmitting signals in both formats until about 2012, many suggest that the government should provide a helping hand. The Finnish government, for example, invested money from a privatized broadcasting transmission center to develop its digital network. So far, the Estonian government has not yet followed this example, and is probably not planning to do so.

Instead, a 10 million kroon tax has been established for newcomers to the digital market. This, according to Alar Pardla, editor-in-chief of the IT magazine Arvutimaailm, will hinder the development of digitalization.
"The main reason why new, self-made channels do not join the digital networks is the small number of customers," said Henry Treude, marketing director at Starman. "Developing a channel for such a small portion of customers is just not feasible. In Finland, it worked because they used digital terrestrial transmission and channels were probably supported in order to make people switch over."

Looking to the future
Aivar Kender, manager of the DigiTV department at Levira, agrees that the government should support both current and new broadcasters through tax benefits and other means. Levira's interest is to service a wider network of TV broadcasters. Besides TV, radio channels will also be broadcast digitally.
But Sepp says a number of circumstances hinder the establishment of new channels. The main obstacle, besides state tax, is that digital TV cannot be passed through the air. The potential customers are those using cable networks, but this number is too small to create competition with existing channels. As soon as digital terrestrial transmission starts, the number of digital -box owners should increase.

"A logical course of events would be that national TV would be the first channel to start with DTT transmission and other channels would join as soon as the number of digital -box holders has increased," said Sepp.
As for private channels, Sepp says there is little incentive for private channels to make the switch.
"After reaching a stable profit a few years ago, which increases year by year, private channels do not want the instability that will come with the switch over," said Sepp.

So what is the future of digital TV? According to Treude from Starman, analog television will remain in Estonia as long as the difference in quality, the number of channels and function does not compensate the difference in price.
During the next few years, digital TV will dominate in areas where cheaper alternatives are not available and in high-income homes that can afford the higher monthly fees. As for the rest of Estonia, it may take years.