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Brussels, 20 December 2001

Commission clears Scandinavian digital satellite TV broadcasting agreement between Nordic Satellite AB and Modern Times Group

The European Commission has cleared(1) an agreement between two Swedish companies, Nordic Satellite AB (NSAB) and Modern Times Group AB (MTG) for the upgrading of MTG's analogue satellite broadcasting operations to digital broadcasting. The agreement between the two Swedish companies is pro-competitive as it facilitates the deployment of new digital technology to the benefit of television viewers in the Nordic countries.

Digital TV is to TV what CD is to sound, i.e. provides a superior picture and sound quality and is also used for interactive services such as pay-per-view TV. Canal Digital was the only provider of digital direct-to-home television services in Scandinavia until early this year when MTG also entered the market. Canal Digital was created by Europe's biggest pay-TV provider Canal+ and Telenor of Norway. Telenor recently agreed to acquire Canal+'s share of the joint venture.

The deal between NSAB and Modern Times will, therefore, be good for Scandinavian consumers who will benefit from the upgrading of analogue to digital transmission and will be given a wider choice of television channels at more competitive prices.

NSAB is a Swedish satellite operator. It owns the three Sirius satellites, which offer pan-European satellite coverage appropriate for direct-to-home (DTH) satellite television reception with antennas not larger than 60 cm. NSAB is owned by the Swedish Space Corporation and Société Européenne des Satellites S.A., the owner of the Astra satellites.

MTG's interests span broadcasting, print media and electronic commerce. It owns several TV channels including TV3, which is one of the most popular commercial channels in all the Nordic countries. MTG also owns Viasat, which is in charge of marketing and distribution of the channels in the Nordic countries. Viasat offers channels that are free-to air, pay-TV and pay-per-view.

The agreement between NSAB and MTG will set the conditions for the migration of MTG's analogue satellite broadcasting operations in the Nordic region to digital satellite broadcasting operations from NSAB's satellites. According to the agreement, NSAB will be the exclusive provider of satellite transponder capacity to MTG for digital transmission of television signals for a five-year period that expires on 15 April 2005, provided that NSAB's rates are competitive and further that NSAB accepts certain restrictions regarding the lease of transponder capacity for digital transmission of advertising funded, general entertainment, non encrypted television channels.

Although the agreement, at first sight, presents certain restrictions of competition, the Commission considers that it is actually pro-competitive since it facilitates the upgrading from analogue to digital transmission of television programmes to viewers receiving satellite television direct-to-home. It also permits a more efficient use of NSAB's satellite transponders, which can lead to more competition in this market in Scandinavia.

(1) The deal was cleared through the sending of a comfort letter under Regulation 17/62 agreeing to the companies request for a five-year exemption

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