At least six bidders for digital TV broadcasting deal

KUALA LUMPUR: At least six companies are expected to submit their business plans to the Malaysian Communications and Multimedia
Commission (MCMC) today, to bid for the rights to be the common integrated infrastructure provider (CIIP) for the rolling out of digital terrestrial television broadcasting (DTTB).


The entire cost of the project, including the cost of subsidising set-top boxes, is expected to be around RM900 million (RM600 million rollout and RM300 million set-top box).

“There was talk that the entire project could cost about RM2 billion, but based on our estimation, we believe the cost (excluding set-top box) could potentially be much lower, perhaps in the range of RM500 million to RM700 million,” said an industry source familiar with the digital broadcasting industry.

Based on the market talk, companies that have expressed interest in the DTTB job include Telekom Malaysia Bhd, Astro (Usaha Tegas), Sapura, Celcom Axiata Bhd, Puncak Semangat Sdn Bhd
and KUB Malaysia Bhd, with Maxis Bhd, REDtone International Bhd and YTL Group also believed to be keen in the job as well.

The winner of the tender will build and operate the digital TV broadcast infrastructure for DTTB services so that all broadcasters such as RTM, Media Prima Bhd, Hijrah TV and others


can ride on the infrastructure to transmit their TV programmes, radio and other online contents.

The winner of the tender will build and operate the digital TV broadcast infrastructure for DTTB services so that all broadcasters such as RTM, Media Prima Bhd, Hijrah TV and others can ride on the infrastructure to transmit their TV programmes, radio and other online contents.

"The telcos are already having thousands of sites in the country and this reduces the need to acquire or build thousands of transmission sites for the TV broadcast. So, in that sense, the telcos can offer competitive pricing to the broadcasters," said an analyst when contacted.

"This would also help the telcos to further reduce their costs, and enable them to compete better against rivals in such a competitive industry."

While the benefits of securing the rights are undeniable, the bidders do have their set of concerns and challenges.

For a start, the bidders would need to figure out how it can ensure that almost all household will take up or buy the idea of going digital. Another concern is to make sure the lower-income folks can afford to migrate to digital TV, as those who do not install the set-top boxes would not be able to watch free-to-air channels upon commencement of analogue switch off (ASO) targeted as early as 2015.

"The eventual winner would need to subsidise one million units of set-top boxes, presumably for the household of rural areas and lower-income group. The government has already announced that it would not be subsidising or partially subsidising the migration," said an industry player.

One of the bidders of the project, who declined to be named, added that besides subsidising the set-top boxes, broadcasters would need to create new contents to encourage the migration.

"I think the bigger challenge is on how to use contents to encourage the migration. Sure, viewers can get more channels and more TV programmes but it won't drive the take-up rate. We believe the key is to have contents and applications such as to help improve health and education in order to help boost take-up rate," said a senior executive of one of the bidding companies.

Nevertheless, the entire industry will be keeping a close watch over the next 14 months as to who will emerge as the winner of the project. The identity of the winner is likely to be announced by third quarter of next year.