NBTC, Thai TV must avoid the path of confrontation

Thai audiences were stunned when Thai TV decided to quit the digital broadcasting business. In a letter to the National Broadcasting and Telecommunications Commission (NBTC) on May 25, it said it would stop broadcasting content on its two digital TV channels – one a news channel called Thai TV and the other a children’s channel called Loca. The exit was supposed to happen in 15 days after the delivery of the letter. 

Thai TV also refused to pay the second instalment of the up-front fees for digital broadcasting licences on the due date – the day it submitted its letter, making it the first and only one of the 17 commercial digital TV operating companies failing to comply with the payment rule. It is still supposed to pay some Bt1.63 billion out of Bt1.97 billion for the two licences until the sixth operational year in 2019.

Thai TV Co, owned by media veteran Pantipa Sakulchai, was disappointed with the performance of its digital-TV business after it failed to generate the expected levels of income in the first year of operations. Instead, the company plans to turn its focus to its previous operations – broadcasting on the satellite and cable platforms – likely to kick off next month.

The broadcaster blamed the NBTC’s clumsy efforts during the transition from analog to digital broadcasting for its Bt300-million loss last year. The delay in distribution of the set-top-box subsidy coupons resulted in a lower number of digital TV receivers than targeted, resulting in low viewer ratings for digital television. 

It is common sense that once the number of broadcasters rises, while advertising spending increases only marginally, everyone’s share of the pie will decrease. Meanwhile, the slowdown of the economy has resulted in private-sector spending drying up, including advertising spending. 

In fact, businesses normally take risks when making a decision on any investments, as there is usually no guarantee for profits in the real world. 

In many places such as Britain, Australia, Italy, France, mainland China, Taiwan and New Zealand, which successfully transitioned to the digital-TV era, it took them about a decade to complete the transition. 

Just as Rome was not built in a day, it would not be possible for Thailand to have almost 15 million analog TV screens switch to digital in one year.

Thai TV Co declined to pay the annual licence fee to the NBTC on Tuesday, accusing the regulator of failing to create a favourable business landscape for digital-TV broadcasters’ survival. 

Under the NBTC’s rules, if a digital-TV operator fails to pay the licence fee within 15 days after the due date, its licence will be revoked, and it also risks revocation of any other licence it holds. 

As for Thai TV Co, it will be fined at the rate of 2 per cent per month for the annual licence fees and 7.5 per cent per day for the up-front fees for failing to make the payments apart from forfeiting the Bt1.7-billion bank guarantee placed with the agency. Each charge will last as long as 15 years of the licence tenor unless the fees are paid. That cannot make mathematical sense for any operator that gives up in the early stages of the transition period, as the fine itself could exceed the licence fees. 

It is still not too late for the broadcaster to change its mind. Seeking new partners or selling time slots can be again taken into account as choices for survival although its previous deals with partners failed. 

As for the NBTC, it should play a more positive role in enabling the defiant broadcaster to return to the digital platform. Suing each other cannot be considered a good solution.