What's new in business news: December 2, 2013

Reasons why pay-TV operators can't make money on football, 3G capacity expansion delayed to 2014 & shrimp disease slows farm growth.

Newcastle's vs. Liverpool in the English Premier League (EPL), the broadcasting rights to which are owned by the Thai company CTH which has has had problems meeting revenue targets (AFP Photo)

BROADCASTING

Reasons why pay-TV operators can't make money on football 

Three new pay-TV operators, GMM Z, RS and CTH, began their pay-TV services early this year to challenge a market monopoly by TrueVisions but will miss their business targets in the first year of operation as marketing schemes have been carried out with little direction.

In the case of RS, the company's performance faltered in its first year of providing Spanish football league or "La Liga" coverage because it focused too heavily on subscription fees. Some marketing schemes do not suit the habits of Thai consumers, who enjoy watching free content. RS has only 20,000 subscribers for La Liga despite its subscription costing only 99 baht a month. RS has adjusted its media rights strategy for La Liga in the second year by giving sublicences to other TV operators such as PSI Holdings and TrueVisions. The company expects to break even in the second year and turn a profit in the third year.

Media rights management for big sports events involves fierce competition. GMM Z has the rights to the 2016 European Football Championship. GMM Z, said its first nine months of pay-TV service had losses but they were in line with its overall business plan. However, the company considers some of the marketing and operating methods they were using as wrong, such as selling through modern trade outlets. The heart of the satellite TV business is to keep good relations with local dealers, who can promote products and drive sales rapidly by sharing revenue. Consumers like to buy satellite dishes and set-top boxes via dealers who offer after-sale services.

Another company, CTH has the rights for the English Premier League (EPL) and met its targets for subscription numbers and cable TV installations but is facing billing management problems that will make it miss its revenue target of 500 million baht.

In the pay-TV industry, dealers can drive sales through revenue-sharing schemes.TrueVisions and PSI have become major players in the pay-TV and satellite TV areas through their strong partnerships with dealers.

[Read full story targets" >here ]

MOBILE PHONES 

3G capacity expansion delayed to 2014

The second phase of TOT's third-generation (3G) network expansion will be put off again until next year. TOT plans to add an additional 13,000 to 15,000 3G base stations to its already existing 5,320 stations under a second-phase 3G expansion through a partnership deal with a private telecom company. TOT initially hoped to sign the MVNO contract with Samart I-Mobile (SIM). SIM is the 3G arm of Samart Corporation and is the biggest and most active partner among five mobile virtual network operators (MVNOs) offering 3G service on behalf of TOT. An MVNO is a company that provides services but does not have its own mobile network

The deal was put on hold when the Office of the Auditor-General suggested that amendments be made to the contract because SIM would get 54% of revenue during the 12-year period and TOT only 46%. But the key point of the contract is TOT must provide download speeds of at least 42 Mbps to SIM. TOT has only 1,000 base stations out of 5,320 with the capacity to deliver 42 Mbps. This would force TOT to upgrade its existing 3G network in the first phase to comply with the new contract.  If TOT upgrades its network, the state enterprise will have only 5 MHz of bandwidth left, insufficient for any 4G service.

TOT is also considering a partnership with the 3G arm of AIS in which 3G is offered under a wholesale-retail contract similar to the partnership deal between CAT Telecom and True Corporation. 

[Read full story here ]

AGRICULTURE

Shrimp disease slows farm growth

Thailand's agricultural economy is expected to expand only slightly this year due to dry weather and a fatal shrimp disease. The farming sector growth forecast for 2013 was slashed to 1.1% from a previous projection of 3.5% to 4.5%, but next year growth is expected in the range of 3-4%, due to the improving shrimp sector.

Early mortality syndrome (EMS) as the main factor behind a 7.2% contraction in the fisheries sector this year. Detected in China three years ago, EMS hit shrimp farms in Vietnam and Malaysia a year later before finding its way into Thailand in last year's fourth quarter. The disease halved shrimp production in Thailand to 300,000 tonnes and affected shrimp exports proportionately. Measures such as regular pond clean-ups and careful imports of broodstock from abroad - could help return Thai shrimp farming to normal and help the fisheries sector to enjoy growth of 2.2% to 3.2% next year.

The crop sector, which covers rice, cassava, rubber, palm oil and fruit, is expected to rise by only 3%, down from earlier estimate of 4-5%. A severe drought that hit most plantations in the North and Northeast was cited as one cause of the slowdown. The shift to using more farm machines to replace human labour has allegedly caused the farm service economy to slow down, with an expansion of 1.1% year-on-year.

[Read full story growth" >here ]

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Writer: Jon Fernquest
Position: Online Writer