Mergers, acquisitions could be options for struggling digital TV broadcasters
Almost two years after digital television was launched in Thailand, Thai TV Co became the first broadcaster to exit the business.
In an interview with The Nation, Natee Sukonrat, chairman of the broadcasting committee of the National Broadcasting and Telecommuni-cations Commission (NBTC), offered the remaining digital TV operators some advice on possible mergers.
"Mergers and acquisitions in the broadcasting business under the current licence-based regime are possible but must comply with the laws," Natee said.
What do you mean by that?
I would like to elaborate that after a merger or acquisition, the corporate entity must be unchanged and in accordance with Thai business regulations. This means the company must be wholly owned by Thai shareholders. Under this law, foreign investors are permitted to hold a maximum of 25 per cent of the company. A management reshuffle is allowed in accordance with the change of shareholders.
What are the options for Thai TV Co if it insists on getting out of the digital-television business?
Before I start talking about this issue, I should emphasise that the 15-year licence to use a national radio frequency is as economically valuable for TV operators as those used for telecommunication purposes. If Thai TV wants to continue in business, under the NBTC’s current broadcasting rules, it can welcome content partners to produce and supply TV programmes for each of its channels with a maximum of 40 per cent of its total airtime, or offer a new shareholder up to a 49-per-cent stake. If the company believes that its digital-TV licences are not worth having, its existing shareholders may sell all their shares to new investors. However, Thai TV’s case is quite unusual and complicated, because the company holds two licences, for a news and a family channel. Therefore, acquiring [shares in] the company would be a challenge for new investors.
What will happen if the qualifications of new shareholders do not comply with the auction rules?
In my opinion, the rules govern
ing the auction [of broadcasting licences] cannot be used or applied for circumstances after the auction is completed. The rules were designed specifically for the auction in order to prevent collusion during the bidding process. Right now we don’t have any specific rules to govern the TV broadcasters related to either mergers, acquisitions or cross-holding. What is needed is to put in place a rule governing media cross-holding. But this regulation is still in the drafting process.
In the today’s free market, do you think that a rule overseeing media cross-holding and ownership is still required?
In my personal point of view, it is very difficult to govern the Bt70-billion broadcasting industry, which has become the second home of newspaper operators in mixed platforms for media companies and content producers amid the change in the media landscape mainly driven by digitisation. With such a complex ecosystem, it’s very difficult to prevent newspaper owners or multimedia content providers to manage or operate a digital TV station.
