At least Bt15.19 bn to be raised in digital TV bids

Economy May 08, 2013 00:00

By Watchiranont Thongtep
The Nat

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Proceeds to subsidise set-top boxes for 22 million homes; critics question bidders' qualifications


The National Broadcasting and Telecommunications Communication (NBTC) expects to raise at least Bt15.19 billion from the auction of 24 commercial terrestrial digital television licences, scheduled for August or September. 
It is set to be the hottest auction in Thailand’s broadcasting history, with companies vying for the 15-year licences that will replace the traditional TV-concession regime.
According to Natee Sukonrat, chairman of the NBTC’s broadcasting committee, the Bt15.19 billion would be used to subsidise digital TV set-top boxes for 22 million households. Potentially, each household will be given a coupon, worth at least Bt690, to buy a digital TV set-top box or integrated digital-TV set.
It is estimated that in the first year, 20 to 30 per cent of the households would be able to receive the digital signal while the coverage will rise to 80 per cent within two years.
Natee noted that the Bt690 discount coupon might be insufficient for buying a digital TV converter. After the completion of the auction, the NBTC would discuss with the Research and Development Fund to seek additional financial support.
The auction has attracted as much criticism as the auction of the 2.1-gigahertz spectrum for 3G cellphone service. In the 3G auction, with three licences for three bidders, the NBTC was criticised of failing to create sufficient competition, resulting in low bids. In the digital TV auction, critics are questioning the qualifications of bidders in each category and the number of licences they can bid for. 
The NBTC’s broadcasting panel yesterday approved in principle the reserve prices of the 24 digital programming licences. The starting prices were proposed by an advisory team from Chulalongkorn University’s Economics Faculty.
The starting prices are set at Bt1.51 billion for each licence of seven variety programmes in high definition, Bt380 million for each licence of seven variety programmes in standard definition, Bt220 million for each licence of seven news programmes in standard definition and Bt140 million for each licence of children’s programmes.
“We believe that the bid prices would be definitely raised, as those with the highest bids in each category are automatically allowed to choose the desirable channels,” Natee said. 
Under the auction proposal by the NBTC, the bidders must raise their price in each round for their target licences. For the children’s programming licence, the bidders must raise their price by Bt1 million per round, Bt2 million per round for news programming, Bt5 million per round for variety channels and Bt10 million per round for the high-definition (HD) variety channel licence. These amounts are based on around 1 per cent of the reserve price of each licence.
The broadcasting committee will also oblige the licence winners to adopt the “must carry” rules, meaning they will have to seek ways to enable satellite and cable subscribers to access their digital TV programmes.
Additionally, the broadcasting committee will consider other regulations related to the method of bidding and the bid-price raising next week, Natee added.
“Now, we’ll move on with the drafting of details of the auction for a public hearing. We’re geared to launch the auction in the third quarter,” Natee said.
There are lingering issues that need to be dealt with before the auction. For example, the potential bidders want to know more about the operating expenses for a digital TV station, particularly the uplink and downlink costs with regards to the “must carry” rule. 
Other concerns are about the logistics of distributing subsidy coupons to 22 million households and a national campaign to build public awareness of the switch to digital TV.