MTG: Russia getting tough

European broadcaster Modern Times Group (MTG) has admitted the Russian market has become “very tough” as it attempts to deal with new regulations and currency fluctuations.

MTG is among a host of international operators in Russia that are being affected by new rules on foreign ownership and advertising.

The company revealed during a conference call for its full-year results that it had brought in advisors and would be making a decision on its strategy in the country shortly. It is also awaiting an amendment to recent regulations that could see advertising permissible on pay TV channels with 75% Russian content.

The Scandinavian operator is likely to be one of the broadcasters most affected by the changes because of its 38% stake in Russian channel operator CTC Media, and its interests in cable and satellite entertainment channels. It also had a shareholding in the Raduga TV satellite platform, which was closed in December.

In January, NBCUniversal pulled its pay TV channels out of the country.

Matias Hermansson, MTG chief financial officer, said the group had been hit by volatile currency changes, with the Russian ruble falling to almost a third of its value over the past 12 months, and admitted Russia had become a “very tough” market.

MTG president and CEO Jørgen Madsen Lindemann added that developing the group’s strategy in Russia was a “high priority” but said the overall performance of the company across its territories had been positive, highlighting the success of its VoD service Viaplay. MTG’s earnings before interest and taxes rose by 2% to 468SEKM (US$56.7m).