Media

Event: The NBTC held a meeting to meet with analysts and fund managers on March 9, 2016 with the aim of clearing the air and putting misperceptions to rest. Topics included network rollout, coupon distribution and policies to facilitate the survival and profitability of digital TV operators. The key takeaways from the meeting are given below.

 

1) The NBTC says the digital TV network rollout is progressing as planned, with coverage expanding from 50% of the population in the first year (2014) to 80% in 2015. Coverage will reach 92.5% of the country’s population by end-2016 and it targets 95% by end-2017. This is as per the Information Memorandum (IM) issued before the auction. The belief that NBTC is not holding to this condition by failing to enforce a 100% rollout is untrue. The deadline for 100% has not yet arrived. 

 

2) The NBTC says all households in Thailand have received the coupon – but have not used their coupons to purchase a digital set-top box, digital antenna or IDTV. Its records show that only 64% of the coupons have been used. The accusation that the NBTC is too slow to distribute the coupon is false. The truth is that households are not using them for reasons of their own, i.e. may not need them as they already have satellite dishes. 

 

3) The NBTC says that its studies show that the move to digital TV in Thailand is being accomplished more successfully – and faster - than in France. They use France as a comparison because there are marked similarities: France also had six analog terrestrial TV channels before moving to digital and 24 DTTV channels after. However, Thailand is doing much better in the transformation. First, it took almost nine years for DTTV in France to achieve a 25% audience share and 28% ad spending share, but Thailand reached that level in just a year, for both audience and ad spending. Audience share in Thailand is approaching 40% as of February 2016, with an ad spending share of 27%. 

 

4) The NBTC wishes to help DTTV operators not only survive but to be profitable. To do this, it is continuing to waive the 2% (of total revenue) Universal Service Obligation (USO) payment for DTTV operators. It is leaving the date of the imposition of this fee open since it wants operators to be stable first. Second, it has not set a time for lifting the “must-carry” rule because it wants to make sure all Thais can access digital TV content no matter how they do so. 

 

For operators unable to make it financially, the NBTC has agreed to revise clause 43 of the Frequency Allocation Act (FAA), which initially stated that the license holder has to operate its own DTTV channel and cannot trade or sell it to others. The new draft will
allow the license to go to a new owner that has the ability to carry on this business. However, the qualifications of the new shareholders must meet the NBTC’s criteria, i.e. 75% of the new shareholders must be hold Thai nationality and the new shareholders cannot dominate the market.

 

5) The NBTC will not allow postponement of the third payment for the digital license, which is due on March 24. If the license holder does not make the payment, the license will be suspended. In an extreme case, the license will be revoked.

 

Our take from this event: We share the NBTC’s view that DTTV will continue to gain in popularity at the expense of analog. But we do not expect all operators will be able to draw in enough revenue from advertisers to survive. Thus, we still expect ad spending to continue to fall into the hands of the larger players such as Channel 7, BEC, WORK, RS, MONO, and GRAMMY.