NBTC set to fix network lease fees

“We hope final approval of the fees can be made one week before all potential bidders submit their applications on October 28-29 for the spectrum auction of the 24 commercial digital terrestrial TV licences,” Natee Sukonrat, chairman of the NBTC’s broadcasting committee said on Friday.

Natee added that the broadcasting committee had earlier planned to fix the network leasing fees around the middle of next month. 

He explained that having the finalised network leasing rates would help potential bidders better make a decision on which TV categories they want and provide them with information on which commercial digital terrestrial TV operating licences they want to secure.

In June, the NBTC granted the state-run digital broadcasters four licences to provide digital terrestrial TV networks for channel operators. The Royal Army, MCOT, the Public Relation Department (PRD) and Thai Public Broadcasting Service (Thai PBS) must now submit proposals of their network leasing rate to the NBTC for approval. Talks can then be held with channel operators.

Rates to be proposed by the state-run broadcasters are expected to differ. The Army will probably charge channel operators about Bt57 million a year for standard definition (SD) channels and Bt171 million a year for high definition (HD) channels. Meanwhile, MCOT is expected to charge channel operators about Bt60 million a year for SD channels and Bt180 million a year for HD channels.

However, the Army might revise its original fee proposal and re-submit it to the broadcasting panel this week after the NBTC granted it a second licence to provide another digital TV network. In return for securing the second licence, the Army committed to negotiate with Bangkok Broadcasting and Television on shortening its concession to operate Channel 7 from 2023 to 2018.

The NBTC has so far granted five of the six available digital terrestrial TV licences. MCOT, Modernine channel operator, has expressed its interest in securing the remaining licence in return for its proposal to discount its network leasing fees by 10 to 15 per cent across the board.

MCOT chief financial officer Jessada Promjart said his company last week submitted the extra cost-effective proposal to the broadcasting panel as a last attempt to persuade them – a move which could also help speed up Thailand’s transition to digital terrestrial TV.

Unlike the Army, MCOT has no plans to negotiate with Bangkok Entertainment Co (BEC) for a possible shortening of its concession term. BEC has a concession from MCOT to operate TV Channel 3 till March 2020.

Jessada explained that shortening the concession could not easily be done because MCOT was a company listed on the Stock Exchange and the contract was overseen by the Committee Under Article 22 of the Public-Private Joint-Venture Act of 1992. 

“If we secure the remaining licence to provide the digital TV network service, the company will earmark at least Bt1 billion for new infrastructure such as transmitters and supporting technology on top of its original cost plan of Bt1.6 billion.”

However, the chairman of the NBTC’s broadcasting panel insisted that in the first phase, five licences was enough to handle 12 public and 24 commercial digital terrestrial TV channels. So, there was no need to grant the remaining licence now.

Natee said his panel was considering whether or not to use the remaining licence in the second phase, involving a community-based service for 12 digital terrestrial TV channels.