The government is expected to invoke its sweeping Section 44 powers this month to tackle the legal tangle with digital TV operators and help ease the financial burdens of the winners of the 2015 4G mobile licence auction on the 900-megahertz spectrum.
According to National Broadcasting and Telecommunications Commission (NBTC) secretary-general Takorn Tantasith, Deputy Prime Minister Wissanu Krea-ngam told a meeting of the working group handling the digital TV problems Thursday that the National Council for Peace and Order (NCPO) and the cabinet on March 27 are scheduled to consider invoking Section 44 this month to allow digital TV operators to suspend their licence payments for three years.
The NBTC, meanwhile, also pledges to subsidise half of the rental fee for broadcasting networks for 24 months, Mr Takorn said.
Supap Kleekrajai, chairman of the Digital Terrestrial TV Channel Operators Club, hailed the decision, saying a three-year suspension would be incredibly helpful for operators, as they can reallocate the payments to finance content and human resource development instead.
Over three years, audiences are expected to install more digital boxes, which will raise audience numbers and advertising fees, and in turn help improve income for digital TV operators, Mr Supap said.
Mr Takorn also said the government will invoke Section 44 to allow the winners of the 2015 4G mobile licence auction on the 900-megahertz spectrum to extend the due date of their licence payments, originally scheduled for 2019, by another five years.
Two winners of 900MHz licences, Advanced Info Service (AIS) and True Move, recently asked the government to invoke Section 44 to postpone their licence payments until 2019.
The last payment for each company is 60 billion baht each. But both firms are still required to shoulder the interest burden set by the Bank of Thailand's policy rate.
At least three to continue
New TV, Bright TV and MCOT confirmed that they will not return their digital TV licences to the regulator, saying it is not necessary to do so since the recent Thai TV ruling will force the NBTC to help operators progress.
On Tuesday, the Central Administrative Court ruled that the National Broadcasting and Telecommunications Commission cannot confiscate the deposit on unpaid upfront fees for two digital terrestrial TV licences from Thai TV Co.
Thai TV won two digital TV licences and had disputes with the NBTC upon requesting to return them and receive a penalty waiver.
The court was of the view that the NBTC had failed to distribute the digital set-top boxes to mass consumer needs, provide sufficient digital network coverage on time and promote the analogue-to-digital terrestrial TV switchover, all factors that contributed to the financial problems for many digital TV licences.
Both digital TV operators and analysts have differing opinions on the ruling.
MCOT president Kematat Paladesh said the Thai TV case is one of the best reference points to set out a better standard for the digital TV industry.
He said the national regulator from now on should not only regulate the industry, but also support the industry so that every digital TV operator can successfully and smoothly move ahead.
"The court's order will uplift the digital TV industry," he said.
Mr Kematat said MCOT will not return its digital TV licences to the NBTC, as its two channels (30HD and MCOT family) are performing better thanks to a programme revamp. MCOT just contracted media veteran Suthichai Yoon to host the TV news programme Black Coffee.
He said the TV programme will resurrect MCOT's viability and draw more advertisers to the channel.
Mr Suthichai also said that despite the fact that the court's order has yet to be finalised, with both parties planning appeals, the ruling is a good sign for the industry.
"The NBTC should not just regulate, but support every digital TV operator," he said.
Paramet Hetrakul, executive director of New TV Co, said New TV will persevere against intense competition after it restructures its operations to cut costs.
"Returning the digital TV licence is acceptable because it can help failing digital TV operators," Mr Paramet said. "The fewer the competitors, the less competition."
He said New TV will not return its digital TV licence, arguing that the channel will be fine.
Mr Paramet said the court's ruling is fair, given the fact that the national regulator failed to carry out promises to facilitate a smooth transition to digital TV.
"This will be a new chapter for digital TV operators, with help from the NBTC," he said.
Somchai Rungsrithananon, chief executive of Bright TV Co, the operator of Bright TV, said the court order will let the NBTC set a new standard to help loss-ridden digital TV operators, not only Thai TV but other ailing firms.
But he said BrightTV will move forward and not return its digital TV licence to the NBTC, though all future moves will be done in accordance with the firm's best interests.
Mr Somchai said he couldn't estimate whether the digital TV industry will move in line with Thai TV, as returning a digital TV licence varies on a case-by-case basis.
"It's not that easy to request the court to allow all operators to do the same thing, because Thai TV Co has been fighting for almost three years," he said.
On the other hand, an analyst from CGS-CIMB Securities Thailand Plc, a securities broker, commented on the case, saying the firm disagrees with the court's ruling because the reasons appear quite vague and it would be more appropriate for the National Council for Peace and Order (NCPO) to exercise its power under Section 44 to resolve the special issue.
"We have to admit that this development is clearly positive for the digital TV industry," said the analyst. "If the court stands by the Central Administrative Court's verdict, this will unlock the industry from the long-standing oversupply situation."
The analyst expressed surprise to hear such a comment from the NBTC's secretary-general, as it implies that the regulator will not seriously move on the case.
"It is highly likely that the Supreme Administrative Court's ruling will be similar to the Central Administrative Court's favourable one for the digital TV industry," the analyst said.
But the analyst expects digital TV licensees whose TV viewership ratings are below 10th place and are not backed by deep-pocketed owners or strategic partners to exit the market.
The analyst said that having 10 TV channels in the market would be better than 24 in terms of audience engagement, ad spending distribution and content production costs.
"Among the top 10 digital TV operators, we think BEC, True and MCOT are likely to benefit the most from this development, as all of them can easily cut costs related to MUX rental fees, content, staff and licence amortisation, all of which are low-hanging fruit to boost their profitability," the analyst said.
Komsan Tortermvasana