Strategy, Policy, Regulatory Considerations and the Decision-Making Process of going to Digital TV in Brazil José Leite Pereira-Filho Member of the Board, ANATEL, Brazil Kiev, Ukraine, 13-15 November 2000 03/11/00 1 Contents 3 INTRODUCTION 3 ACTIONS ALREADY TAKEN BY ANATEL 3 EVOLUTION OF TV: THE CONSUMER OPINION 3 KEY ASPECTS RELATED TO THE EVOLUTION OF TV 3 FACTORS TO BE TAKEN INTO CONSIDERATION 3 SCENARIOS UNDER ANALYSIS BY ANATEL 3 NEXT EVENTS 03/11/00 2 Introduction é é é é é é é é POPULATION: 160 M Inhabitants SURFACE: 8.5 M km2 GNP: 800 Billions USD GNP PER CAPITA: 5,000 USD FIXED TELEPHONY DENSITY: 16.8% MOBILE TELEPHONY DENSITY: 9.1% TV BROADCASTING PENETRATION: 85% PAY TV PENETRATION: 6.5% BRAZIL BRASÍLIA DATE: 31st DECEMBER 1999 03/11/00 3 Actions already taken by ANATEL 4 JULY 1998 PUBLIC CONSULTATION ON THE PROCEDURES TO BE FOLLOWED DURING THE DIGITAL TV TESTS 4 NOVEMBER 1998 RESOLUTION APPROVING THE ABOVE PROCEDURES 3 FEBRUARY 2000 PUBLIC CONSULTATION ON THE REPORTS OF SET/ABERT CONCERNING THE TESTS CARRIED OUT WITH THE ATSC, DVB-T AND ISDB-T DIGITAL TELEVISION STANDARDS 03/11/00 4 Evolution of TV: The Consumer Opinion 4 QUALITATIVE MARKET RESEARCH WITH CONSUMERS, BROADCASTERS AND MANUFACTURERS: é 12 ATTRIBUTES WERE DEFINED 4 QUANTITATIVE MARKET RESEARCH CARRIED OUT IN 55 CITIES OF THE FIVE BRAZILIAN REGIONS, LISTENING 5,000 PEOPLE: é 1. AID TO PHYSICAL HANDICAPS é 2. PROGRAM STORAGE (MOUSE “CLIC”) é 3. HDTV é 4. MULTIPLE PROGRAMS (“BLOOMBERG” TYPE TV) 4 PUBLIC DEMONSTRATIONS AND SURVEYS IN SHOPPING CENTERS IN SEVEN CITIES, LISTENING 4,700 PEOPLE. 03/11/00 5 Key Aspects Related to the Evolution of TV 3 INTERACTIVITY 3 SCREEN FORMAT 3 MOBILITY 3 TELEVISION AND PERSONAL COMPUTER CONVERGENCE 3 TELECOMMUNICATION AND TELEVISION CONVERGENCE 3 SYSTEM RELIABILITY 03/11/00 6 Strategic Factors 3 UNIVERSAL ACCESS TO INFORMATION 3 NATIONAL INTEGRATION 3 LATIN AMERICAN INTEGRATION 3 TECHNOLOGICAL CO-OPERATION 3 ECONOMIC DEVELOPMENT 3 STIMULATE THE COMPONENTS INDUSTRY 03/11/00 7 Social and Cultural Factors 3 THE ROLE PLAYED BY TELEVISION é TO UNITE THE FAMILY é TO KEEP SOMEBODY COMPANY 3 THE CONVERGENCE FROM THE CULTURAL POINT OF VIEW é TELEVISION CHARACTERISTICS FOR USERS é COMPUTER CHARACTERISTICS FOR USERS 03/11/00 8 Technical Factors 3 DTV TECHNICAL FACTORS: é THE DIGITAL TELEVISION SERVICE QUALITY MUST BE, AT LEAST, EQUIVALENT TO THE CURRENTLY DISTRIBUTED ANALOGUE TELEVISION SERVICE é DIGITAL AND ANALOGUE SYSTEMS MUST HAVE AN ADEQUATE COEXISTENCE DURING THE TRANSITION PERIOD é EFFICIENT USE OF THE RADIOELECTRIC SPECTRUM é FLEXIBILITY FOR INTRODUCTION OF NEW APPLICATIONS MUST BE TAKEN INTO ACCOUNT IN THE LONG-RUN 03/11/00 9 Technical Factors 3 DIGITAL TV BROADCASTING X PAY TV é THE DIGITAL TELEVISION SERVICE OFFERED BY THESE DIFFERENT NETWORKS MUST BE COMPATIBLE é THE INTEGRATION OF PROGRAMS AND FUNCTIONALITY BETWEEN THESE DIFFERENT NETWORKS MUST BE CONSIDERED é “MUST CARRY” RULES NEED TO BE ESTABLISHED 03/11/00 10 Economic Factors 3 IMPACT ON THE BROADCASTING INDUSTRY VALUE CHAIN 3 DETERMINANT FACTORS FOR THE PENETRATION OF DIGITAL TELEVISION 3 COST FOR THE CONSUMERS 3 COST FOR THE BROADCASTERS 3 POTENTIAL MARKET OF EACH DIGITAL TELEVISION STANDARD 03/11/00 11 Scenarios under Analysis by Anatel 3 SCENARIO I - HDTV PROGRAMMING ONLY 3 SCENARIO II - SDTV PROGRAMMING ONLY é SCENARIO II A - MULTIPLE PROGRAMS é SCENARIO II B - SDTV INTERACTIVE é SCENARIO II C - SDTV WITH FREE AND PAID SERVICES 3 SCENARIO III - HYBRID MODEL 03/11/00 12 Next Events 3 ADOPTION OF THE DIGITAL TV STANDARD 3 TECHNICAL REGULATION FOR DIGITAL TV 3 BASIC PLAN FOR DIGITAL TV 3 ACTION PLAN FOR THE TRANSITION 3 DIGITAL TV AUTHORISATIONS 03/11/00 13 www.anatel.gov.br 03/11/00 14