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Viewing cable 08BUENOSAIRES82, Telecom and ATSC in Argentina: The Visit of Ambassador

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Reference ID Created Released Classification Origin
08BUENOSAIRES82 2008-01-24 17:59 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Buenos Aires
VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0082/01 0241759
ZNR UUUUU ZZH
R 241759Z JAN 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 0110
INFO RUCPDOC/USDOC WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 6789
RUEHCV/AMEMBASSY CARACAS 1688
RUEHMN/AMEMBASSY MONTEVIDEO 6986
RUEHSG/AMEMBASSY SANTIAGO 1011
RUEHBR/AMEMBASSY BRASILIA 6672
RUEHLP/AMEMBASSY LA PAZ 5083
UNCLAS BUENOS AIRES 000082 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EEB/CIP FOR NICK FETCHKO, EMILY YEE 
USDOC FOR ITA/MAC/OLAC/PEACHER 
USDOC FOR ITA/MAS/LASTOR 
 
E.O. 12958: N/A 
TAGS: ECON PREL EINT ECPS OVIP TSPL AR
SUBJECT: Telecom and ATSC in Argentina: The Visit of Ambassador 
David Gross 
 
REF: BUENOS AIRES 56 
 
1. (SBU) SUMMARY:  Ambassador David Gross, U.S. Coordinator for 
International Communications and Information Policy, and Jamie 
Estrada, Deputy Assistant Secretary of Manufacturing and Services 
for the Department of Commerce, visited Argentina on January 17. 
The visitors were unable to meet with GoA officials (reftel), but 
private sector meetings provided insight into: 1) current telecom 
regulations, which a former official says haven't been followed 
closely since the beginning of Nestor Kirchner's administration; 2) 
the motivations for a possible GoA decision on a high-definition TV 
standard, which remains uncertain, and strategies to address them; 
and, 3) challenges and opportunities facing the telecom industry, 
especially U.S.-owned TV broadcasters.  Despite uncertainties in the 
market, the private sector is convinced there are real growth 
opportunities in telecom and television at present.  END SUMMARY. 
 
-------------------- 
REGULATORY FRAMEWORK 
-------------------- 
 
2. (SBU)  Henoch Aguiar, former Secretary of Communications from 
1999-2001 and still a major player in the telecom industry as a 
private lawyer, gave Ambassador Gross and DAS Estrada a positive 
report on the current telecom regulatory framework (which he helped 
design), but criticized how it was being implemented.  For example, 
he noted that the time needed to obtain a license should be around 
six months, but that it has averaged over a year during the last 
five years (i.e., roughly since Nestor Kirchner became President in 
2003).  He also commented that license cost should be fairly low, 
but that his clients sometimes had to pay more than required by 
existing regulations.  He said that spectrum auctions should be 
taking place every six months on average, but none had been held 
since Nestor Kirchner became President.  He noted the rise of 
unregulated internet service providers in the provinces, in large 
part because there was little prospect of getting approval through 
proper channels.  Finally, he spoke positively about Argentine human 
capital in the IT sector, particularly notable in the outsourcing of 
services to foreign firms, and expressed optimism that this trend 
would continue.  He noted that new Buenos Aires Mayor, Mauricio 
Macri, is planning to establish special units to promote IT 
investment and e-government in the capital. 
 
------------- 
HDTV STANDARD 
------------- 
 
3. (SBU) Interlocutors were ambivalent about the possibility of ATSC 
adoption as Argentina's standard for TV broadcasting.  Jorge Rendo, 
Director of External Relations for Clarin Group (Argentina's largest 
media conglomerate), opined that the decision would rest on GoA 
perception of benefits in terms of domestic job creation, and might 
therefore be swayed by promises of opening TV manufacturing plants 
in Argentina.  Sebastian Rial, Senior Sales Manager of Samsung in 
Argentina (other companies represented were LG and Harris, plus the 
regional ATSC rep), agreed in a separate meeting that domestic 
employment would be the determining factor.  Clarin's Rendo 
commented on how the competing standards seemed to have much more 
funds at their disposal, and were using them to directly influence 
GoA officials and elected representatives -- funding trips 
(especially to Europe) and trade fairs (by the Japanese) in 
Argentina. 
 
4. (SBU) Samsung's Rial also suggested focusing more attenion and 
publicity toward potential consumers, to highlight the benefits to 
them.  Ambassador Wayne had earlier suggested to Clarin that 
interested parties prepare a fact sheet, which would include the 
substantial cost savings of an ATSC TV, the required converter box 
(another Clarin employee had heard of an ATSC box for just $37, 
versus about $400 in Brazil for a box to adapt the Brazilian version 
of the Japanese standard), and the projected energy cost of both use 
and transmission.  Clarin's Rendo also stated that for Chile to 
select the Japanese standard would almost force the GoA to do the 
same, but that otherwise MERCOSUR could end up with three different 
standards in its four (current full) member countries. 
 
5. (SBU) The consensus was that the longer the decision took, the 
 
more likely that the GoA would choose ATSC -- so continued delays 
are a positive sign.  Clarin's representatives agreed that there is 
no urgency for Argentina to select a DTV standard at this time, 
since most open-air TV stations are strapped for cash and the GoA 
has no pressing need to recover analog spectrum from broadcasters. 
Besides owning one of the only two profitable open-air TV stations 
in Argentina, Clarin also owns the leading cable TV company in the 
country.  Clarin is already in the process of converting to digital 
service using the ATSC standard. 
 
---------------------- 
BROADCASTER OPERATIONS 
---------------------- 
 
6. (SBU)  U.S. broadcasters in Argentina (Turner, Fox, Disney and 
MTV) reiterated Henoch Aguiar's assertion that human capital, 
particularly in creative and technical areas, is one of the biggest 
advantages about doing business in Argentina.  MTV General Manager 
Paula Guerra called "content" exports their biggest growth 
opportunity at present.  Turner Vice President of Corporate Affairs 
and Communications Juan Iramain cited the currently low cable 
penetration in other Latin American countries (60% of Argentina's 
households have cable TV, which is more total households with cable 
than in Mexico and Brazil combined) as the reason for potential 
export growth.  He said that he expects Turner will be able to 
double its feeds to the region in the next two years. 
 
7. (SBU) Rendo said Clarin Group's major opportunity would be the 
"triple play" - telephone, internet, and cable service combined in a 
single package.  Clarin is currently doing well with just cable and 
internet combined, while phone companies (particularly Spanish-owned 
Telefonica) are having success with telephone plus internet. 
Turner's Iramain cited difficulties such as advertising maximums for 
cable companies and anti-U.S. sentiment within the GoA.  He stated 
that Turner was endeavoring to portray itself more as an Argentine 
company to the greatest extent possible, and was developing 
corporate social responsibility (CSR) projects to enhance its bona 
fides in-country.  MTV's Guerra mentioned that MTV has also recently 
created a "pro-social" department for its own CSR activities. 
 
8. (U) This cable was cleared by Ambassador Gross. 
 
WAYNE