MCOT seeks increase in fee for Channel 3

The fee increase would take effect for the extended concession period from the middle of next year.

Bangkok Entertainment - a unit of BEC World - has operated Channel 3 since 1990, and its contract with MCOT expires next year. However, the company has the right to extend the concession for another 10 years after that.

It has already offered to pay concession revenue of Bt2 billion to MCOT throughout the extended 10-year period and will invest in setting up additional stations. A letter has been sent to MCOT notifying it of the extension of the contract period.

MCOT chairman Surapon Nitikraipot yesterday said the concession fee for the extended period was too low compared with the Bt650 million a year earned from the state agency's other private concessionaire, pay-TV operator TrueVisions.

He said the board, in accordance with the Public-Private Joint Venture Act, had set up a committee to renegotiate a possible new rate with Bangkok Entertainment for the new period.

The committee is expected to finish negotiations within three months, given that MCOT has to extend the concession period to Bangkok Entertainment about the middle of next year.

Surapon said MCOT was perfectly willing to allow the company to exercise its right to extend the concession period. However, the state agency believes it can gain a higher concession fee and that any increase will be fair.

He pointed out the market situation when Bangkok Entertainment signed its original deal with MCOT was different from today's

and that no one in the past could have foreseen Bangkok Entertainment's strong business performance. The concession fee agreed on back then was appropriate at the time.

Notification of the extension gives MCOT a good opportunity to initiate new negotiations on a new rate, Surapon said.

He believes both parties can agree on a new fee, due to their good relationship.