TBS 11, Fall-
Winter 2003

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Saving Egyptian Pay-TV: CNE Fights Pirates

By Noha El-Hennawi


Hassan Hamed

For Assistance, Please Call…CNE's New Contact Center Introduces Customer Relations Management

By Noha El-Hennawi

"CNE SMS Service. Dear subscriber, kindly note that your subscription expires in 14 days. Please pay at CNE by credit card or cash. For assistance please call (02-8275555)."

This is the message that will interrupt your satellite transmission for five seconds and appear on a black screen—if you are a subscriber at Cable Network Egypt—to remind you of the due date for the renewal of your subscription.

Instead of relying exclusively on traditional ways of contacting customers, CNE has embraced a new technology in its two departments responsible for maintaining customer links. In the Contact Center and the back office, communication now takes place via new channels that guarantee quicker and better service.

This new system comes in the context of a comprehensive business approach adopted by CNE known as CRM or Customer Relationship Management.

"CRM is not just a technology …but an approach CNE is taking towards its customers, backed up by thoughtful investment in people, technology, and the business process," says Sherif El Shazly, customer operations director.

In the back office, there are a handful of employees responsible for outgoing contacts and credit card transactions. In the past, the telephone was their sole means of communication with customers. Now they can contact them via their decoders, to remind them of payment due dates or deliver promotion announcements.

"Dear subscriber, renew and get (LE1600) in discount vouchers. Call 8275555 ext. 114 now," says one of the messages.

CNE is a shareholder company incorporated in 1991 by the Egyptian Radio and Television Union (ERTU) in cooperation with private sector shareholders as the first Pay-TV project in the Arab world. It is the only company that can access the Nilesat to activate subscriptions. It serves subscribers for Arab Radio and Television (ART), Showtime, and Firstnet channels.

The Contact Center is the department responsible for receiving customers' inquiries in order to upgrade or downgrade the packages required, solve technical problems, and answer questions from potential customers. "In the past, it was called the Call Center because we received only phone calls," El Shazly says. "But now the center has been upgraded to receive customers' enquiries via telephone lines, faxes, and email."

"This center is equipped with all CRM tools, which are the PCs and huge telephone lines operating under certain criteria," says El Shazly. "We are implementing a Computer-Telephone Integration system (CTI). One of the main features of CRM is the integration of your telephone system with your business applications."

CTI is used to gather statistics and classify all the needs of the customers, El Shazly added. This means that once a registered customer calls or emails the Center, a screen carrying all the data concerning the customer's subscription pops up in front of the employee.

Although there is a variety of channels through which customers can contact CNE, telephones are still the most popular medium for most customers. "We receive thousands of calls a day. Faxes and emails are not that much because they are not really widespread in Egypt," El Shazly said.

To guarantee the best investment of human resources, the new system ensures a skills-based routing of incoming calls, faxes, and emails. In other words, the system classifies the incoming messages, determines their nature, and directs them to the employee whose personal skills guarantee the quickest solution to the inquiry.

"It is the only contact center in the Middle East that applies this new system for pay-TV," said Shazly.

When the new campaign to fight pay-TV piracy by reducing subscription rates was launched (see companion story "Saving Egyptian Pay -TV" ), the Center received a million 'phone calls from potential subscribers over the first fifteen days, says El-Shazli.

With the introduction of CRM, the company was expecting to reduce the number of employees. However, the department has now been forced to hire more people to handle the increasing number of potential subscribers tempted by the new rates. TBS

The problem starts when someone subscribes to ART not just to watch Arab pay-TV channels but also with the idea of making a buck. Through a network of cables, he connects his decoder to the TV sets of others who live in the same building and are keen to watch these channels at a lower cost. However, this way, the viewer still cannot watch more than one channel at a time.

The problem becomes more complex when these TV pirates decide to integrate their efforts, forming centralized networks to generate the maximum profit. They guarantee their customers a better illegal service by buying more than one decoder and linking them to more TV sets.

The network thus created allows the pirates' customers to watch more than one formerly scrambled channel at a time, but they pay more in return. However, the monthly amount they pay to the pirates is far less than the rate charged by the genuine distributors.

Thousands of subscribers have fallen to the temptation of saving money by making use of the illegal services, allowing TV pirates to generate millions of Egyptian pounds each month at the expense of the companies that own and distribute the channels.

In the first signs of organized resistance, Cable Network Egypt (CNE) has formed a joint company with Egyptian Digital Distribution (EDD), which owns and distributes Arab Radio and Television (ART) channels, to crack down on TV pirates by cutting rates and cooperating closely with the Ministry of the Interior to strictly enforce regulations against illegal distribution.

According to Hassan Hamed, the head of the Egyptian Radio and Television Union, the number of subscribers who rely on pirate services ranges from 500,000 to one million and cost CNE and EDD not less than ten million pounds per month.

Piracy is especially widespread in Alexandria, Egypt's second city, and villages, according to Mohamed Abdel Latif, CNE general manager. Abdel Latif says that the problem started to emerge two years ago but has become a major phenomenon over the last six months. "We were surprised by this horrific phenomenon which has been proliferating at a very quick pace," says Abdel Latif.

Hamed believes that the sudden proliferation is due to the development of a keen interest in pay-TV among Egyptians. "Now scrambled channels have become very clever because they realized what the audience is looking for and that is why we have monopoly over movies and international championships. Paid programs have acquired a high value," Hamed said.

Abdel Latif believes that this phenomenon carries further critical implications that may threaten the morality of Egyptian society and even political stability. He explained that the pirates distribute pornographic materials over their networks and transmit political messages potentially challenging to the status quo.

"In addition, this may discredit the leading role played by Egypt in the protection of intellectual rights," says Abdel Latif.

In terms of practical solutions, CNE and EDD have come to the conclusion that penalizing pirates is not enough. "We asked ourselves why people resort to these pirates," Hamed says, adding that the low-price service provided by the pirates is the main reason behind the spread of the phenomenon.

To rid these illegal distributors of their popularity, EDD and CNE have formed a new company under the name of Digital Services-Egypt (DSE) to implement the second prong of their anti-piracy campaign, namely distribution of service at new, much lower, prices. The campaign allows a subscriber to pay no more than LE315 for a decoder, satellite dish, and six-month subscription to ART's main bouquet.

The subscriber first pays LE135 as an insurance deposit on a decoder from the company. Then, Instead of paying LE79 to subscribe to the main ART bouquet, the subscriber pays the new cut rate of LE30.

The subscriber will gain access to eight otherwise-scrambled channels—ART Movies1, ART Movies 2, ART Sports 1, ART Sports 2, ART Kids, ART Tarab (songs), ART Hekayat (a 24-hour channel showing TV series and plays), and the National Geographic channel—besides 150 non-scrambled channels.

"Pirate networks provide viewers with a very limited number of channels, not exceeding five," says Abdel Latif.

"We have managed to solve 50% of the problem in six months through the intervention of the security forces, and this new project will solve the rest of it," Abdel Latif adds.

According to Abdel Latif, the co-option of TV pirates into the new company as legal distributors is difficult. 'It is difficult because there should be mutual trust.…Meanwhile, we welcome anyone who can have premises carrying the CNE name or the name of the new company to distribute the service, provided that he meets the requirements," says Abdel Latif, adding that a subscriber should have a store and be trustworthy enough to distribute a huge number of decoders, in return for a commission.

Hamed said that selling the service at such low rates had proved impossible in the past. During early phases of the project, the number of subscriptions was limited, so the rates needed to be high in order to generate a reasonable profit, says Hamed.

Hamed is optimistic about the profit that the new project should generate, saying that the decrease in rates will definitely be made up for by the increase in the number of subscriptions. "Now the demand has increased and should cover our expenses," Hamed says, adding that the number of subscriptions needs to reach at least 400,000 in order for the project to be profitable.

However, Abdel Latif is pessimistic about the project, claiming it will generate no profit. "This project is not profitable. We got involved in it to serve social interests and security precautions," Abdel Latif said.

A high ranking source at EDD told TBS that the implementation of the new phase of the project has not yet started because the company is still negotiating the deal with digital decoder providers. The current beneficiaries are the old subscribers who already have their decoders and are renewing their subscriptions at the new rates. TBS


Noha El-Hennawi is TBS's Cairo correspondent.
Copyright 2003 Transnational Broadcasting Studies
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Adham Center for Television Journalism, the American University in Cairo
E-mail: TBS@aucegypt.edu