LONDON (Reuter) -- Central European Media Enterprises, the brainchild of American cosmetics heir Ronald Lauder, has been building a media empire on an odd legacy of the communist era -- an abundance of televisions even in countries with few telephones.

"The governments wanted to make sure everyone could hear the message,'' said Leonard Fertig, chief executive of London-based Central. "And it's no coincidence that there's a lot more televisions than refrigerators and telephones.'' For Central, which is incorporated in Bermuda, all those television sets were part of a strategic equation that added up to building commercial television stations.

Central is not the only company to recognise the potential of the central and eastern European media market. Major media companies such as Luxembourg's CLT and France's Canal Plus are also competing.

But Central, the first to start developing major, commercial television stations in the area, remains the largest player in a market that still has enormous growth potential.

"The game really hasn't started yet,'' said David Murrell, chief executive of KPMG's international media practice. "This is like UK television before Channel 4. The market won't run out of steam for the next ten years.'' Central has maintained a fierce, single-minded focus on being the first to develop major, commercial television stations in emerging markets.

"We recognise that the first opportunity in these countries is commercially supported, over-the-air television,'' Fertig told Reuters at Central's London headquarters.

Fertig previously worked in US pay-television operations before linking up with Lauder to run Central.

In many of the post-communist countries, cable and satellite television were only available to about 25 percent of the population -- not enough to attract large advertisers wanting to reach the mass market.

"On a purely commercial basis, if you want to collect advertising revenues, the way to do it is to be in everyone's home, not in 25 percent,'' said Fertig.

The European market was in sharp contrast to many Asian countries. "In India only 30-odd percent of homes have TV,'' said Brian Sturgess, a media analyst with ING Barings. "But in Europe the infrastructure is there. Everybody is waiting to be switched on.'' Being the first commercial broadcaster in each market is key to Central's success because in most countries only two or three national television frequencies are available.

"They're scarce resources,'' said Fertig. "So when you win that there isn't much left for the next person.'' The strategy has paid off handsomely in revenue growth since Central launched TV Nova in the Czech Republic in February, 1994. Central, in conjunction with local partners, now operates national stations in the Czech Republic, Romania, Slovakia, Slovenia and Ukraine.

It operates regional stations in Poland, where it is due to launch a national station next October, and is bidding for a national TV licence in Hungary. It also operates regional stations in Germany, its first business, started in 1993.

For the first nine months of 1996, Central's most recently reported period, the company had revenues of $84.2 million.

Profits have yet to follow. TV Nova was Central's only profitable station, although the Slovenian and Romanian stations, both launched in December 1995, were profitable in the 1996 fourth quarter. "But in the first quarter (of 1997) I doubt that's going to be true,'' Fertig said.

Central was continuing to scout for new markets. Fertig rattled off the Baltics, the Balkans and the former Soviet Union as possibilities.