Bailout package ‘TOO LARGE’

national April 20, 2019 01:00

By NOPHAKHUN LIMSAMARNPHUN
THE NATION WEEKEND

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NEW HANDOUTS WILL ONLY HELP THREE TELECOM GIANTS, FOREIGN INVESTORS |AND A BILLIONAIRE, LEAVING CONSUMERS WITH VERY FEW OPTIONS



THE relief measures offered to telecom operators and digital TV broadcasters this month are far too generous, say academics, consumer advocates and anti-corruption groups who fear consumers will lose out.

At a seminar held by the Thailand Development Research Institute (TDRI) and other agencies, TDRI president Dr Somkiat Tangkitvanich said the three main telecom firms alone will be get a combined Bt19.7 billion from the relief measures.

Under the package announced on April 11, telecom giants AIS, True and Dtac will be given the privilege to invest in the fifth generation (5G) cellular networks by paying combined spectrum fees of just Bt75 billion, Somkiat said. 

It is only foreign shareholders and one Thai billionaire who will benefit from this package, said Somkiat.

Sari Ongsomwang, from the Foundation for Consumers, said these measures will not benefit consumers because there will be no competition in the sector. 

Under the order issued by the National Council for Peace and Order (NCPO) - enabled by the use of the Article 44 special powers in the interim charter - bailouts will be available for operators in the struggling telecom sector as well as for loss-making digital TV broadcasters. The latter can skip on paying their outstanding fees or take up an offer to return their licences.

Apart from extending the payment terms for telecoms operators to 10 years to help ease the burden on 4G operators, the order also offers 5G spectrum at a relatively low price and the proceeds will be used to cover the revenue shortfall resulting from the digital TV broadcasters’ losses.

Dr Mana Treelayapewat, a lecturer at the University of the Thai Chamber of Commerce’s School of Communication Arts, agrees that there will be little or no benefit for consumers because only big businesses will gain from the April 11 relief measures.

In a bid to help digital TV operators adjust to changing consumer behaviour, the NCPO order, for the first time, allowing them to return their broadcasting licences to the National Broadcasting and Telecommunications Commission (NBTC).

This will help reduce the number of |digital TV operators from 22, a figure deemed far too high as consumers switch to mobile communication and related technologies.

Mana said that, as for the potential public benefits such as better digital TV content, these are unlikely to materialise, even though there will be fewer operators once some licences are returned. 

 “As for the quality of content, there are several factors such as competitive pressures and sponsorships etc. Currently, many TV channels have resorted to home shopping as a new source of income, and the regulator has paid no attention to this phenomenon [which runs against efforts to improve content],” he said. 

The NCPO order also ties the relief measures offered to 4G licensees to those of digital TV licensees, as part of the broadcasters’ 700MHz spectrum will be reallocated to the upcoming 5G service.

In practice, AIS, True and Dtac have been given 30 days to decide if they want to spread their 4G-spectrum payments, worth over Bt100 billion, from the current four to 10 instalments over 10 years. 

In return, they are required to purchase the 700MHz spectrum for 5G service, with at least two operators likely to pay about Bt25 billion each, so the NBTC has fresh funds to cover the loss of revenue from digital TV licensees.

Based on the NCPO order, digital TV licensees do not have to pay the remaining B13.6 billion, or 40 per cent of their licence fees. In addition, NBTC will pay a combined Bt18.7 billion in network fees on behalf of the broadcasters over the next nine to 10 years in order to help them survive. 

At this stage, at least four or five broadcasting licences should be returned. 

Academics believe this is a major policy mistake, as the NBTC has miscalculated on the rapid adoption of mobile, streaming and other technologies in Thailand, making traditional TV broadcasting unprofitable and less attractive to audiences, advertisers and investors.

Meanwhile, the NBTC said it wants to position Thailand as one of the first countries in the region to adopt 5G mobile technology with a rollout expected some time next year, even though the private sector suggests it will take more time for the market to be ready for it.

Mana said the process for 5G adoption is risky due to the lack of transparency and policy debates ahead of implementation.

At present, streaming and OTT (over-the-top) technologies have gained popularity in Thailand as reflected by YouTube, Facebook Live, Netflix, Google and Line TV, which have the potential to outpace traditional digital TV broadcasters for entertainment, news and other content.

Mana said 5G services also need compatible devices that should be widely available in the next three to four years, so the telecom operators may be unsure whether it makes sense to invest in 5G spectrum now. 

 

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