The aquisition of CRA is an absolutely fantastic business, says Steve Marshall, head of the London-based Cordiant fund
CRA, under its new owner, the Cordiant Group fund, has embarked on further business expansion – transitioning from the traditional operation of transmitters to data centres. In an interview with HN, the head of Cordiant, Steven Marshall, indicates that other acquisitions in the domestic market are also under consideration.
Three years ago, CRA – the country’s largest operator of television and radio transmitters – got a new owner: the London-based Cordiant Digital Infrastructure Limited acquired the broadcasting company from the Australian Macquarie group. With a price tag of GBP 451 million (approximately 13.5 billion CZK at the time), it represented one of the largest transactions in the domestic telecommunication market.
CRA boasts annual revenues exceeding CZK 2.2 billion, with approximately half of that generated from radio and television signal distribution. The company’s primary clientele includes public and private TV stations, such as Nova and Prima. Notably, CRA’s visibility stems from its network of approximately 650 transmitters scattered across the Czech countryside – from Kleť in Southern Bohemia to the Žižkov Tower in Prague and Ještěd in Liberec.
Leading Cordiant is Steven Marshall, a sixty-three-year-old Briton with extensive international experience in the broadcasting industry. In his initial interview with Czech media, he consistently emphasises the satisfaction of the current owners with the investment. As a great advocate of traditional broadcasting, Marshall identifies numerous new opportunities for further developing CRA.
Furthermore, thanks to recent acquisitions, CRA has emerged as the market leader in cloud services and is well on its way to becoming the largest data centre operator. The company plans to construct a new data centre, valued over CZK 1.5 billion, on the outskirts of Prague, near Zbraslav.
Regarding the acquisition of CRA, Marshall states unequivocally, ‘Absolutely. Consider what we have gained through this purchase: we now possess the country’s top terrestrial broadcaster, the national champion. This strategic position enables us to attract high-quality employees and management, which can be leveraged for broader initiatives. As we expand our fibre optic networks, repurposing unused buildings – once housing analogue technology – into data centres becomes an obvious solution, aligning with customer demand. Currently, we operate seven data centres, with plans for additional facilities. Our next step involves expanding our existing infrastructure between the Žižkov Tower, capitalising on strong demand in central Prague.’
Marshall commends CRA’s forward-thinking management, extending beyond short-term horizons. ‘Their focus extends to delivering results in the third or fourth year of the business plan. Drawing from my experience managing multinational companies worth $100 billion, I consider this management team among the best I have encountered.
How do you view the future of the broadcasting business? Is it not an industry that will eventually be supplanted by the ubiquitous internet streaming?
‘As a big supporter of broadcasting infrastructure, I diverge from the believe that traditional broadcasting is a melting ice cube destined to vanish, replaced entirely by streaming services. I do not believe that. Over the next decade, this transition will not materialise. Terrestrial broadcasting infrastructure will persist for decades to come due to its efficiency in delivering substantial video content to the masses – both in terms of cost-effectiveness and environmental impact, including its carbon footprint. Governments, regulators, and industry stakeholders will recognise that the alternative – switching off traditional broadcasting and investing in alternative facilities – would incur prohibitive costs and environmental consequences.
‘Consider our transmitter here in Prague, which disseminates television content to every household in the area via a single signal and power line. If we were to shut it down, the ensuing demand for data would necessitate massive data centres and extensive fibre optic networks. The associated costs would be astronomical, rendering such a shift unfeasible.
‘Despite this, Cordiant continues its diversification strategy, investing in data centres and fibre optic networks. However, this expansion does not come at the expense of traditional broadcasting or from a believe that broadcasting is on its deathbed.’
But still, the previous owner invested in data centres, in fibre optic networks. And Cordiant is carrying on with that diversification strategy…
So, what lies ahead for the broadcasting business?
‘I am genuinely excited about our upcoming product offerings. These innovations will enhance our services and boost revenue for our customers – the broadcasters. Examples include dynamic advertising insertion and the ability to pause and resume live television broadcasts.
‘Our approach involves integrating traditional broadcasting services with over-the-top (OTT) capabilities. OTT allows viewers to connect to the internet with a simple button press, significantly expanding the functionality of existing TV systems. Currently, we generate revenue from OTT, the Internet, and traditional broadcasting. Our additional revenue streams will come from enhanced functionality. For instance, viewers can pause or rewind live broadcasts and even download content directly from their television sets, either free of charge or for a fee. This broader functionality ensures the longevity of our technology.’
For example?
For example, digital ad insertion, where targeted advertisements can appear during specific programs. These ds might take the form of pop-up banners or be region-specific. By tailoring ads to specific households, we can maximise revenue. Imagine households with avid cartoon viewers – advertisers would find them particularly appealing. Furthermore, digital signals will not be limited to video content; they will also carry other types of information and data. When combined with digital radio signal transmission (DAB), we can broadcast public announcements, stock market updates, weather forecasts, and more.’
Is CRA’s income from the broadcasting business growing at this point?
‘Over the past three years, the primary broadcasting service sector in the Czech Republic has experienced faster growth than the telehousing segment (which involves placing customer equipment, such as that of mobile operators, on CRA towers). Our investment in cutting-edge digital terrestrial broadcasting technology – specifically for TV broadcasting received via conventional rooftop antennas – has significantly expanded our capacity. With the same spectrum, we can now accommodate many more channels. Additionally, we have upgraded several existing channels to enhance picture quality, resulting in improved transmission for viewers. In some cases, these upgrades have led to increased revenue, and we have also extended our broadcasting contracts. Furthermore, we currently have spare capacity to add new channels. In the past twelve months, we have successfully introduced Warner TV, AMC, A11, Sporty TV, and Hit TV to terrestrial broadcasting. Presently, we are negotiating with approximately seven or eight additional TV channels. Thus, we have indeed observed substantial growth in our broadcast revenues.’
Given the Internet age and prevalence of fibre optic networks, some may find your optimism about the traditional broadcasting business surprising…
Everybody seems surprised, but the conventional view does not align with reality – it is, in fact, an absolutely fantastic business.
The existing broadcast frequency licences will expire sometime around 2030. Is that something that raises concerns for you?
I am not the least bit concerned. While terrestrial TV frequencies were initially guaranteed until 2030, the widespread use of terrestrial broadcasting across Europe has prompted extensions beyond that date. During the recent World Radiocommunications Conference in Dubai, government delegations advocated for preserving broadcasting spectrum and allocating it primarily to broadcasters beyond 2030. Notably, television frequencies will not even be discussed at the next conference in 2027, and any evaluation of their use will occur in 2031. Although this does not guarantee a change, governments currently prioritise allocating spectrum to broadcasters. Interestingly, mobile operators may assert their need for spectrum, but the reality is that they are not fully utilising the spectrum they already possess. Obtaining additional spectrum would be convenient for them, especially since they also provide IPTV services (television transmitted over the Internet).’
CRA’s CEO Miloš Mastník announced that this year, CRA’s revenues from other services will surpass those from the traditional broadcasting business. Is that still the case?
‘Indeed, that remains accurate. While the traditional business continues to grow, our expansion primarily focuses on enhancing the capacity of our data centres and improving fibre connectivity.’
At present, CRA ranks among the largest data centre operators in the Czech Republic, following T-Mobile and Cetin. Your ambition is to claim the top spot, driven by your plans to construct a substantial data centre near Zbraslav. How far along are you with that project?
‘Fortunately, we have secured an existing site in Zbraslav. I estimate that we will obtain the necessary permits by year-end. I would like to express gratitude to the government for its support. This facility will be the most advanced in the Czech Republic, representing a fundamental upgrade data capacity – crucial for this country. It will enable us to retain data that currently resides elsewhere but is of significant interest to keep within our borders, benefiting from highly advanced security measures.’
Are you suggesting that data stored in facilities operated by giants like Amazon or Microsoft is not secure?
‘Not at all. However, there is a growing concern, not limited to the Czech Republic, about sensitive national data – such as bank account information or health-related data – being stored abroad. The preference is to keep such data domestically, where regulation and oversight are more manageable.