True Visions allowed to air commercials

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In return, TrueVisions will pay 6.5 per cent of its ad revenue to the concessionaire on top of its present contribution of 6.5 per cent of subscription fees.

MCOT chairman Suraphol Nitikraipot said TrueVisions would also pay Bt110.86 million in compensation to MCOT.

Of that, Bt89 million will be for MCOT's loss of benefits from TrueVisions' delisting from the local stock market. Another Bt20 million will be payment of a fine levied by MCOT for buying technical equipment without informing the concessionaire. The rest is equal to 6.5 per cent of ad revenue reaped before the agreement.

TrueVisions has been airing commercials on a trial basis on TrueVisions' channels for more than a year now.

Suraphol said the compensation would be paid within 12 months at 3-per-cent interest and be booked as fourth-quarter revenue for MCOT.

Under the agreement, TrueVisions will also allocate three more cable channels to MCOT in addition to the two it has now.

TrueVisions executive vice chairman Sompan Charumilinda said the agreement would enable the company to attract new local programme producers.

"Permission to air commercials will enable us to attract new local partners who are able to produce good-quality programmes and generate ad revenue. But the real benefit will be to our subscribers, who will enjoy more good programmes," Sompan said.

However, he admitted ad revenue would amount to less than 5 per cent, with most revenue continuing to come from subscriptions.

TrueVisions has 1.6 million subscribers and expects to reach almost 2 million by year-end. It achieved Bt10 billion in revenue last year.

One analyst estimates TrueVisions will earn Bt500 million a year from airing commercials alone.

True Corp, TrueVisions' parent, closed at Bt3.40 yesterday, up 1.8 per cent, while MCOT closed at Bt23.90, down 1.24 per cent.