Starting prices to be set today

An advisory team from Chulalongkorn University’s economics faculty had proposed the options for reserve prices and the auction method subcommittee had proposed the incremental bids.

Among the reserve price alternatives are one based on the full spectrum value and another based on a discounted value, taking into account some variables such as the number of qualified bidders. A source at the National Broadcasting and Telecommunications Commission (NBTC) said its broadcasting committee was tipped to select the reference prices based on the assessed spectrum value for each licence rather than the discounted value.

The committee is sensing strong demand for the channels. The auction proceeds should reach at least Bt15.05 billion, of which part will be used to support the NBTC’s policy to subsidise the purchase of digital set-top boxes by 22 million households.

The committee will also enforce the "must carry" rules on the licence winners. They will have to seek ways to allow subscribers to satellite and cable television to access their digital programmes.

The committee will next draw up the details of the auction for a public hearing.

Incremental bids

The contestants can raise their bids in each round by a fixed amount, depending on the type of licence. For a children’s channel, the rise is Bt1 million per round; for a news channel, Bt2 million per round; for a variety channel, Bt5 million per round; and for a high-definition (HD) variety channel, Bt10 million per round. The increase is based on about 1 per cent of the reserve price of each licence.

The broadcasters and content providers hoping to join the auction appear to be happy with the proposed reserve prices but some are still concerned about lingering issues.

Kanchit Kawachat, chief executive officer for the digital TV business at GMM Grammy, said the latest proposal on reserve prices was very interesting for both big players like his company and small content producers.

Jessada Promjart, chief financial officer of MCOT, the operator of Modernine TV, said that as expected, the reserve prices reflected market demand and were realistic for qualified bidders.

"What we want to know are the regulations and methods for the bidding and the required qualifications of the bidders," he said.

Chalakorn Panyashom, executive vice president for television business 2 and special events at Workpoint Entertainment, said low reserve prices would open more doors for small bidders but the final result will depend on market competition.

He asked who would shoulder the uplink and downlinks costs, amounting about Bt10 million a year – the digital TV licensee, network provider or satellite TV platform provider?

Surin Krittayaphongphun, vice president for marketing and sales at Bangkok Entertainment Co, the operator of Channel 3, said the company was waiting to see how the situation unfolded. Low reserve prices might force a reduction in the face value of the discount coupons that the state will give away to households be used to acquire a digital TV set-top box or integrated digital TV set.