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. Last Updated: 07/27/2016

TV, Radio Chief Seeks $3Bln to Go Digital

The head of the state-owned television and radio transmission conglomerate on Tuesday called for the government to take a $3 billion loan to switch from analog to digital broadcasting over five years.

"If Europe switches to digital and we remain in analog, we will become an enclave unable to develop," said Gennady Sklyar, head of the Russian Television and Radio Broadcasting System, or RTRS, which was formed last year.

"Since there is no money in the [state] budget to modernize the system, I think a large-scale state credit is necessary to switch Russia's television and radio to digital broadcasting," he said at a news conference.

Transmission systems were part of the Communications Ministry until 1998. That year, Mikhail Lesin, first deputy head of state-owned television and radio company VGTRK, orchestrated a presidential decree that joined the systems with VGTRK. Lesin later became press minister.

In 2001 the vast and dilapidated system -- which includes about 15,000 television transmitters, more than 3,000 radio transmitters and relay lines -- was broken off into RTRS, which technically does not report to either of the ministries.

The reform was expected to make it easier for RTRS to find strategic investors.

Sklyar said RTRS is not going to be privatized, but the company may form a subsidiary joint-stock company to attract a strategic investor. Several European telecoms have expressed interest, Sklyar said, but he declined to name them.

Sklyar said he called for the $3 billion loan following an analysis of the industry and that the proposal is not formalized in any government document.

About 80 percent of working transmitters should already have been decommissioned, Sklyar said, but replacing them with new analog equipment would mean paying twice because they would have to be replaced later with digital.

Stanislav Glubokov, head of the television and radio broadcasting department at the Communications Ministry, said switching to digital is a long and gradual process. "The country is not ready for it right now, and people are not ready," he said.

Furthermore, no decision has been made on which digital standard to adopt, U.S., Japanese or European, Glubokov said.

By the end of the year, the Communications Ministry is to complete a plan to switch to digital broadcasting, most likely by 2015, Glubokov said. The plan envisages parallel work on the existing analog system.

"Our plan is much more down to earth," he said.

Sklyar also said RTRS has signed a contract with the Thyssen conglomerate to supply elevators for the Ostankino television tower, which was devastated by a fire in 2000. Reconstruction of the tower is expected to cost 1 billion rubles ($31.7 million) over two years.

RTRS also announced a plan to build a $10 million amusement park around the tower using funding from private investors.