BBL expects other digital players to follow lead of Thai TV

BBL expects other digital players to follow lead of Thai TV

Other financially ailing digital TV operators are likely to follow Thai TV's footsteps in returning their licences if the recent verdict by the Central Administrative Court is upheld, voiding the National Broadcasting and Telecommunications Commission's (NBTC) demand for licence payments, says a senior official at Bangkok Bank (BBL).

No digital TV operators have asked for the bank's advice in returning their licences as they are awaiting the outcome of the Thai TV case, said senior executive vice-president Virasak Sutanthavibul. But the digital TV field is too crowded and operators that cannot run their businesses anymore might choose to return their licences if the option is available, said Mr Virasak.

"Thai TV sought to terminate its business and the legal process is not over, so we cannot talk much about the issue. But the case suggests operators have been affected," he said.

Pantipa Sakulchai, president of Thai TV Co Ltd, filed a lawsuit against the NBTC, seeking court orders to nullify the company's bids for two digital TV licences from the NBTC, and revoke the commission's letters demanding licence fee payments. The company also asked the court to order the NBTC to return 16 BBL guarantee documents, in addition to 365.5 million baht in licensing fees it had already paid, plus 7.5% in annual interest payments from the date the lawsuit was filed.

The court last week ruled that the NBTC had failed to keep its promise as detailed in the prospectus, and Thai TV had the right to cancel the contract.

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

Thai TV operated two digital channels, Loca and Thai TV, which went off the air on Dec 1, 2016, after the company failed to pay the overdue second instalment.

NBTC data indicates that BBL issued letters of guarantee worth 21.6 billion baht to 14 digital TV operators, including Thai TV, while Kasikornbank (KBank) has offered guarantees totalling 10.9 billion to eight operators. Bank of Ayudhya provided guarantees worth 2.68 billion to two operators.

Mr Virasak said the recent court ruling has paved the way for the government to invoke Section 44 to extend the licence payment period for digital TV operators by three years, adding it would help bolster their cash flow and give them time to adapt.

For the Thai TV case, the bank is expected to get back its letter of guarantee within 60 days if the NBTC does not appeal the Central Administrative Court's ruling, while the legal process will be completed in one year if the commission decides to appeal.

BBL has set aside loan-loss provisions in light of the Thai TV case over the past 1-2 years, so the bank will not be affected, he said.

Mr Virasak said the bank had instituted credit loss provisions for other digital TV operators as needed, but they had continued to service their debts.

KBank president Predee Daochai said that returning digital TV licences is not an easy process as the operators have heavily invested in the business.

He said it remains to be seen whether the Thai TV case would open the door for other operators to follow suit.

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