Shift to digital to fuel investment

The transition from analog to digital technology will create more than Bt60 billion worth of investment in the television broadcasting industry, particularly in digital terrestrial and cable-TV business, according to Cisco Systems (Thailand).

Estimated amounts put into transformation to digital era

Cisso System (Thailand) estimated that more than Bt60 billion in investments would be mobilised for the transformation from analog to digital broadcasting technology, particularly in terrestrial and cable TV businesses.

Medium Investment costs

1) Digital Terrestrial TV broadcasting in next 4 years Bt52.8 billion

Infrastructure and network providers Bt15 billion

TV broadcasters Bt4.8 billion

Manufacturers of digital TV converter boxes Bt33 billion

2) Upgrade from analog to digital cable network in next 2 years

(excluding Cable Thai Holdings, GMM Grammy and True Visions) Bt6.25 billion

DVB-C (digital video broadcasting-cable)

boxes replacing 3.5 million of analog cable TV boxes Bt5.25 billion

New digital cable TV network Bt1 billion

Source: Projection by Cisco System (Thailand).



Anupon Tajawanno, business development manager at the company, said yesterday that such a sum would be mobilised for the move to digital broadcasting technology in terrestrial and cable-TV business.

Natee Sukonrat, chairman of the National Broadcasting and Telecom-munications Commission's broadcasting committee, said that under the regulator's digital road map, 95 per cent of the 22 million households should have access to digital terrestrial TV within four years.

The NBTC plan is to have 48 digital channels. Twelve of these will be public channels, another 12 will be community-based, and the remaining 24 will be for commercial service.

Natee said the regulator would allocate the 12 public channels via a "beauty contest" and grant the 24 commercial channels by auction this year.

Meanwhile, licences for providers of digital terrestrial TV networks and infrastructure will be issued by the end of the current quarter.

Anupon said Cisco Systems (Thailand) projected that during the four-year transition to digital TV, the investment in digital broadcasting would cost about Bt52.8 billion.

Of this amount, Bt33 billion would be used in the manufacturing sector to produce digital TV converter boxes for 22 million households; Bt15 billion would be allocated for new infrastructure and network development; and Bt4.8 billion would be for content production and running costs at 24 commercial stations.

Vish Iyers, director of sales business development at the US parent company, Cisco Systems, described Thailand as a most exciting country, particularly for broadcasting business, mainly because of the growing pay-TV market with new players and strong advertising-industry growth.

Besides digital terrestrial TV, Anupon said investment in the pay-TV market would also increase significantly in the next two years, as local cable operators needed to upgrade their analog networks carrying only 80 channels to digital cable networks carrying more than 300.

Given this increased demand, Cisco projects that investment in the local cable-TV business will be worth about Bt6.25 billion, excluding further spending by Cable Thai Holdings, GMM Grammy and TrueVisions.

Of this amount, Bt5.25 billion would be for production of DVB-C (digital video broadcasting-cable) boxes to replace 3.5 million analog cable-TV boxes, while Bt1 billion would be used for upgrading to new digital cable-TV networks.

CONCERN OVER COSTS, RISK

In a satellite-TV market that is facing saturation, major satellite-TV operators - Nation Multimedia Group, GMM Grammy, RS and Workpoint Entertainment - are studying the possibility of shifting to the digital terrestrial TV platform.

"Combined running costs at satellite-TV channels are used by those content providers as a crucial benchmark against possible expenditure in digital TV channels," Dew Waratang-tagoon, chief operating officer of platform and strategy at GMM Z, the satellite-TV unit of GMM Grammy, said yesterday at the "Thailand Digital Broadcast 2013 and Beyond" seminar, organised by Cisco Systems (Thailand).

He said that before the spectrum auction for 24 commercial digital TV channels began, his company wished to know what the starting-bid price and network leasing fee would be.

Thawatchai Jitpanant, the NBTC's economics commissioner, said the broadcasting panel must complete its study on the leasing service fee before setting the starting price for bids.

Anupon, who is an expert on both telecoms and broadcasting, said the cost of network leasing for a digital terrestrial TV channel was estimated to be about four times that for a satellite-TV channel. Normally, satellite-TV operators pay a monthly transmission cost of Bt530,000 per megabit per second.

"Such a cost does not seem to be compelling enough for content providers to shift to digital terrestrial TV channels," he added.

Not only do content providers fear the potentially high running costs for digital terrestrial channels, companies wishing to obtain licences as network providers also expressed concern at the seminar over business risks if their services proved to be expensive. MCOT executive vice president Sura Gaintanasilp said the company would possibly seek business partners to spread the risk.