Further state aid sought for digital TV

Further state aid sought for digital TV

Operators plead for elimination of fees

The Digital TV Operators Association will today submit a fresh proposal to Prime Minister Prayut Chan-o-cha to request more state assistance in easing broadcasters' financial burden and business difficulties.

The proposal asks the state to eliminate the rental fee of broadcasting networks or MUX (which is due in January 2018) and to waive the remaining licence fees starting from the May 2018 payment.

Suparp Kleekachai, president of the association, said after a meeting yesterday with Deputy Prime Minister Wissanu Krea-ngam that the association had submitted the proposal to Mr Wissanu two weeks ago and that Mr Wissanu had called four related parties to hear and discuss the proposal yesterday.

The four parties were the National Broadcasting and Telecommunications Commission (NBTC), the Digital Economy and Society Ministry, the Budget Bureau and the Media Research Development Association.

Mr Suparp said yesterday's meeting did not reach a clear resolution and the association must submit its proposal to the prime minister to request more support.

"We are not ready to pay the rental fee or MUX due in January of next year, or the rest of the licence payments due starting in May," Mr Suparp said.

He said prior measures by the NBTC are insufficient to help existing digital TV operators, as their burdens keep increasing.

Digital TV operators include the Royal Thai Army Radio and Television's Channel 5, MCOT Plc, the Public Relations Department and the Thai Public Broadcasting Service (Thai PBS).

A source who was at the meeting said the association also asked the NBTC to substitute its existing digital TV licence requirements for more flexible conditions that will let digital TV operators exit the business, as some operators may now be uncertain of their long-term viability.

Additionally, the association urged the NBTC to amend its existing digital TV development roadmap, which envisions expanding the number of digital TV channels to 48.

"Today it is hard for 24 channels to survive," the source said. "It's impossible to expand to 48 as planned."

The source said digital TV operators use the 450-700MHz spectrum range, which is more appropriate to telecom services, especially future 5G mobile service.

Most of the 24 digital TV operators have been facing business difficulties and financial burdens for years, mainly due to the high prices of licences and the threat posed by over-the-top (OTT) services.

The NBTC granted 24 digital TV licences to 17 winning bidders in April 2014. The winners agreed to pay a combined 50.86 billion baht in licence fees over six years.

Experts argue that too many licences were handed out and that the business paradigm of broadcasting has changed, with more and more consumers switching to OTT services, which operate over internet networks rather than traditional systems.

The rise of online video and TV, the most popular OTT content in Thailand, presents a challenge to incumbent telecom and TV operators. It also endangers the TV advertising industry and the pay TV market.

Last December, the NBTC launched a series of four initiatives intended to ease the financial burden of digital TV broadcasters in tight financial situations.

First, the NBTC would spend close to 2.5 billion baht to subsidise digital TV broadcasters' costs of transmitting their programmes to the satellite and cable platforms for three years.

Second, the NBTC eased the burden on broadcasters by expanding the term of licence payments for digital TV.

Third, the NBTC implemented a new annual licence fee structure for digital TV broadcasters in 2016. The rejig will reduce digital TV broadcasters' licence fees by 50% on average.

Fourth, the NBTC gave additional annual licence fee reductions to digital TV broadcasters that aired content related to the mourning of the late King Bhumibol.

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