Broadcasters may be required to provide free set-top boxes

Companies that win one of the 24 licences for commercial terrestrial digital TV broadcast coming up for auction next year might be required to procure, at their own cost, about 20 million set-top boxes and provide them free of charge to customers.
A working group of the National Broadcasting and Telecommunications Commission’s digital TV subcommittee will propose adding this condition to the terms and conditions for the licence auction, which is scheduled for March.
The working group is under the NBTC’s broadcasting committee, which will switch Thailand from the current analogue broadcasting system to digital, which will mean TV viewers will need set-top boxes compatible with the updated technology.
The complete distribution of the boxes is expected to take two years. The current value of each box is about Bt500.
A source in the working group said this proposal on free provision of set-top boxes was meant to enable the quick roll-out of digital TV service. The number of boxes each licence winner would have to procure would vary according to the type of programme they air on their channels (see table).
The source said this would benefit both viewers and broadcasters. Viewers would not have to bear the cost of the new set-top boxes when they switch to the digital service, while the licence holders could ensure that they have viewers.
Earlier, the broadcasting committee mulled using the proceeds from the licence auction to subsidise the distribution of set-top boxes, but this would take time to process.
Broadcasting committee chairman Natee Sukonrat told free-TV operators last week that the licensing method would benefit both viewers and the licence holders, but he declined to elaborate.
There will be a total of 48 terrestrial digital TV channels, of which 12 will be public channels, 12 community channels and 24 commercial channels.
The committee plans to issue the public and community licences via the “beauty contest” method – the bidders with the most viable proposals will get the licences. The panel will start granting licences for public service next month and those for community service in December next year.
The commercial licences will be granted via a combination of methods, including the auction.
The working-group source said those vying for the 24 commercial licences might be required to bid simultaneously for the targeted channels on the same day.
“The starting price of some licences could be zero on the top of the cost of the set-top boxes they have to provide to their audience. The licence term is 15 years,” he said.
Another working group is evaluating the spectrum price for each commercial channel. One factor used to calculate the spectrum value is the type of programmes planned.
The broadcasting committee will draw up the technical standards of the boxes to ensure quality reception. The bid winners might be required to offer a warranty on the boxes for a certain period. The panel will also determine the periods and coverage of box distribution, auction terms and conditions, and the number of licences one bidder can acquire. It will also estimate the value of the set-top boxes as their price may be part of the licence value.
The broadcasting committee has approved adoption of the European DVB-T2 standard for terrestrial digital TV in Thailand.