Digital TV: Fears of further dropouts

[webfact]

DIGITAL TV
Fears of further dropouts
Usanee Mongkolporn,
Sucheera Pinijparakarn
The Nation

BANGKOK: -- Executives of Thailand's major commercial banks have expressed worries about the rough business environment facing the operators of the new digital television channels, after Thai TV Co became the first victim of the tough transition from analog to digital broadcasting.

Thai TV officially notified the broadcasting regulator on Monday that it was calling it quits after a year in the business. Now the banks, some of which have a lot of money on the line, fear some of the other digital TV broadcasters will follow suit.

In an auction held by the National Broadcasting and Telecommunications Commission (NBTC) in late 2013, a total of 24 pricey licences for terrestrial-based digital-TV channels were secured. The up-front fees for these licences were to be paid in six annual instalments, with the successful bidders obliged to provide bank guarantees equivalent to the total fees.

Bangkok Bank and Kasikornbank issued multibillion-baht guarantees to the successful bidders.

An executive of Bangkok Bank, who asked not to be named, said that if broadcasters are in trouble and unable to pay their licence fees, the guarantor banks might have to confiscate collateral from them.

In the case of Thai TV, Bangkok Bank was responsible for issuing the guarantee. The banker said the concern now was that others would follow Thai TV's lead and throw in the towel.

An executive of KBank shared that opinion, saying the problem would get worse if the NBTC allowed broadcasters to invalidate their licenses.

Boontuck Wungcharoen, chief executive officer of TMB Bank, said the case exemplified the challenges surrounding the transition from analog to digital broadcasting, but he said the impact on the banking industry should be small, since the combined value of all licences and bank guarantees was only about Bt50 billion.

Meanwhile, the NBTC said it would negotiate with Thai TV Co on its plan to relinquish its two digital-TV licences, one for news and the other for children's and family programming.

The commission said the company would be subject to tough conditions if it insisted on returning the licences.

On Monday, Thai TV informed the NBTC in writing that it wanted to cancel its licences. It also accused the agency of failing to implement a smooth transition from analog to digital TV broadcasting, resulting in the company's business being unviable.

But Thawatchai Jittrapanun, a member of the NBTC, said there were better choices for Thai TV than giving up its licences.

"One proverb says live fish are more valuable than dead ones, so the company should not invalidate its licences, as they are still useful. The company could enter joint ventures with other investors in compliance with our rules and regulations," Thawatchai said.

According to NBTC regulations, any of the 24 digital-TV licence holders may lease up to 40 per cent of their airtime to other firms or partners. They may also seek additional investors as shareholders.

The NBTC will meet today with Thai TV representatives to discuss the request to give up its licences per the May 25 letter undersigned by Pantipa Sakunchai Sakulchai, the company's chairwoman, who will make a statement at 5pm today at Thai TV headquarters.

Sombat Leelapata, acting deputy secretary-general of the NBTC, said that if Thai TV insisted on giving up the two licences, the firm would still be responsible for paying the remainder of the licence fees, since it only paid the first instalment last year. There are five more annual instalments to go.

In the auction, Thai TV won a news-channel license with a bid of Bt1.328 billion and a second licence for a children's channel, which it called Loca, for Bt648 million.

The first instalment was paid in May last year, so Thai TV was supposed to make the second payment this month, but failed to do so by the May 25 deadline. Altogether, the amount due is Bt1.6344 billion for both licences - Bt1.1072 billion for the Thai TV news channel and Bt527.2 million for Loca.

To back its bids, Thai TV was required to submit bank guarantees worth the full up-front fee from the second through sixth instalments. If the firm cannot pay the entire amount, the NBTC is entitled to claim the bank guarantees.

Sombat said the NBTC was also authorised to consider any plan to give up the licences, but all licence holders were required to announce a shutdown of their digital TV operations at least 30 days in advance.

They also have to propose remedial plans to the NBTC to prevent any negative effects on viewers. In the event that the two licences are returned to the NBTC, the agency may consider holding a new round of bidding for the available frequencies, or combine the two standard-definition licences into one for a high-definition TV channel.

Source: http://www.nationmultimedia.com/business/Fears-of-further-dropouts-30261022.html


-- The Nation 2015-05-27

[FangFerang]

The whole digital TV thing seems a way to weed out the telecom competition and force Thais to buy new televisions.

Even with the fleeting rebate coupons, a lot of the population are going to find themselves utterly uniformed or entertained, and there is going to be a whopper of a spike in pollution when people chuck the old sets.

[Strangebrew]

Lmao they did it in the Philippines might want to check it out.

[katana]

The whole digital TV thing seems a way to weed out the telecom competition and force Thais to buy new televisions.

Even with the fleeting rebate coupons, a lot of the population are going to find themselves utterly uniformed or entertained, and there is going to be a whopper of a spike in pollution when people chuck the old sets.

When the signal goes digital, you just need a set top box to plug into your old TV, not a new TV.