"Efforts to attract investment into the industry are hampered by the country's long history of providing television practically for free," said Vladimir Makoveyev, executive director of the Cable TV Association of Russia (CTAR).

"Even now the cost of servicing the collective antennae is about $0.2 to $0.3 a month, and so the vast majority of the population sees even $2 or $3 as excessive," he said. "But it is very difficult to win back investments at that level of pricing, and at the same time very difficult to attract investment."

Despite the headache - for private broadcasters, at least - of marketing to people with a fixed idea about television as a social service, there are those willing to give it a try.

Market structure

At the moment the market is divided between Kosmos TV, which claims to have a 35 percent to 40 percent market share, and satellite operator NTV Plus, which takes up most of the remainder. MTU-Inform is also involved, claiming to have 15,000 subscribers. Comcor TV joined the market in August 2001, and claims to have a subscriber base of around 50,000, including its other services, such as high-speed Internet connection.

Access is one of the biggest issues; so far coverage by the networks is fragmented and inconsistent across the capital.

Versatel is the newest entrant. "We only started marketing properly in November 2002," said Versatel's Afsar. "But we plan to give 1.5 million homes the choice of signing up by May."

The company, which operates under the Divo TV brand, signed up last year to a market of three other principal players - Kosmos TV, NTV Plus and the other more recent entrant Comcor TV.

Private equity fund TPG-Aurora, the European Bank for Reconstruction and Development, plus city-owned cable operator Mostelekom jointly own this project and together have stumped up $20 million.

Operating under the Divo TV brand, the service exploits Mostelekom's existing cable infrastructure.

Divo TV's signal is broadcast by satellite to Ostankino, and from there transmitted as a Multichannel Multipoint Distributive System (MMDS) signal, which is then picked up and fed into Mostelekom's network and then, via a special decoder, into subscribers' homes.

Versatel's big advantage is that by using an existing infrastructure it was able to keep its capital expenditure down; the company believes that up