DTH bidding sees globally unprecedented bidding
Pakistani media kept out of process; cable operators believe project would die premature death; SC conditioned auction results with LHC verdict
ISLAMABAD: PML-N minister Kh Asif has criticised broadcasters’ low payments to PEMRA each year against the new DTH bids running into billions and, therefore, not being comparable.
The Supreme Court allowed PEMRA to hold DTH bidding on November 23 as date and venue were already fixed in a PEMRA appeal against an order by the Lahore High Court to stop the bidding. The Supreme Court decided that bidders do not have any rights or interests after bidding and no award or contract will take place till the decision of the Lahore High Court.
Geo TV has challenged PEMRA’s regulations for the DTH bidding in the Lahore High Court to exclude broadcasters from bidding, retaining pre-qualified companies from a previous bidding round in 2015 without any media experience and a special exemption given to foreigners to have management control.
A DTH system is not comparable to TV Channels and Networks in Pakistan as a DTH system can carry up to 1000 channels and has multiple revenue streams compared to few channels or TV Networks.
A DTH system can have hundreds of in-house TV channels. Therefore comparing a few crore of revenue to PEMRA by individual channels with revenues from much larger DTH platforms is inaccurate.
Also the bidding figures of nearly Rs 5 billion per license by some non-media companies in PEMRA Nov 23 bidding is considered excessively high and unrealistic by experts. The highest bid amount is more than the DTH project setup cost estimated by PEMRA’s own Swiss consultant and over 2000% more than the base price of Rs 20 crore fixed by PEMRA. PEMRA bypassed its own pre qualification requirement of experience in broadcast industry in clause 3.8 of PEMRA DTH Regulations and allowed companies with no media experience to bid. Such non-media companies have bid abnormal license fee, which has no parallel in Asia. There are only 100 DTH projects in world due to its challenging and tough nature of operations based on Satellite and nationwide distribution. Regulators are very conscious of companies and investors in a DTH project due to its impact on national politics and economy. Such projects are awarded to most suitable companies with clean and clear source of funds and whose core business is media and communication to ensure quality service at most affordable rates over a period of 10-15 years. In India, all six DTH licenses are issued to mainstream media and communication Groups for fixed price of Rs 100 million only.
One of the top DTH bidders has accumulated losses of over Rs 8 crore whereas the other is registered just few months back. One top bidder is from Currency Exchange business and the other is from Oil Exploration business. The third top bidder‘s majority local partner is also from petroleum sector and its foreign partner enjoys management control against Section 25 of PEMRA Ordinance. Therefore Khawaja Asif should have consulted a few media experts before giving his seal on DTH bids. Especially so when Pakistan Broadcasters Association has rejected PEMRA DTH Bidding in a letter to Chairman PEMRA in September 2016 and in an advertisement published in all newspapers on Nov 22nd, 2016 that excludes broadcaster from the bidding process.
The cable operators are, meanwhile, rejoicing their “victory’ as they believe the project would not succeed and die a premature death.
Mr Khawaja may also realize that broadcasters have been imploring on government to end PEMRA Rules that limit media Groups to only 4 channel license and non participation in TV distribution. If these rules were lifted, TV networks would be in a position to contribute lot more to the national exchequer. Instead of criticizing the media industry on twitter and TV channels, Mr Khawaja may urge decision makers in his government to lift these restrictions on broadcasters, which were imposed by the powerful rulers of the past. Mr Asif should also realize that TV distribution revenues are more than half of Global Broadcast Industry revenues. By limiting number of TV channels per Media Group in Pakistan and shutting off TV distribution totally, how can Mr Asif expect higher revenues from Pakistani broadcasters?
Mr Khawaja should also realize that Pakistan media industry annual revenues are only around USD 1 billion due to restrictions by PEMRA. India has a totally liberal media policy and there is no restriction on media companies to own newspapers, TV channels, Cable TV or DTH license. One Media House in India has a number of newspapers, online portals, world’s largest DTH platform with over 25 million subscribers and a Cable TV Network with over 10 million subscribers. There are other media Groups in India owning similar media entities. The result is an Indian Media industry with annual revenues of over USD 25 billion. It’s only because India encourages vertical integration in its Media sector i.e. ownership of TV Distribution by broadcasters and vice versa to benefit from economies of scale in human resource and technology.
In Pakistan, PML N Government and previous governments has not been able to introduce a Pay TV regime and broadcasters do not get any distribution fees from Cable operators. This has severally damaged the growth of Pakistan media industry. Khawaja Asif should have done his homework before commenting on the state of Pakistan broadcast industry and the laws and rules dealing with it.
Mr. Asif should also question PEMRA whether cancellation of two broadcaster DTH licenses from a previous DTH bidding in 2004 is justified after taking Rs 20 crores in license fees. These licenses were cancelled after PEMRA took two years to approve bids against its own limit of 100 days and then refused to issue and sign contract. After retaining 20 crore for nearly six years (2003 to 2009), it cancelled licenses and retains the money till now. PEMRA could not stop PTV from issuing four DTH tenders without any license during this period. Is there any parallel of such injustice by a Regulator in any other industry to deprive successful bidders from a historic market opportunity when there was no DTH project in South Asia. Will Khawaja Asif or PML N Government stand up in Supreme Court against this injustice? Isn’t it advisable to settle this matter in Supreme Court before inviting fresh bids for DTH?
PEMRA under pressure from the powerful rulers could not achieve digitization of Pakistan Cable Networks, which would result in higher capacity and more channels. Digitization would have made impossible blocking of TV channels when required. This is also one of biggest reasons for non-expansion of Pakistan broadcast industry.
By criticizing Pakistan media, Mr Asif, a harsh critic of dictatorship, is actually endorsing the draconian rules against broadcast media made by dictators and mishandling of two DTH licenses won earlier by broadcast groups.
Khawaja Asif a veteran politician and also with strong technocrat skills should be mindful that Pakistan TV channels have played a major role in fight against war on terror, stabilization of Pakistan democracy, movement for independence of judiciary among other national causes. Labeling all media Groups as Robber Barons does not befit a politician of Khawaja Asif’s stature. And another aspect, which Mr. Asif should have been mindful of, is that impact of Media Industry is not analyzed purely in terms of money. Global media regulators time and again emphasize that job of media regulator is not to earn maximum revenues but to ensure that information, entertainment and education shall reach the widest number of readers and viewers at most affordable levels. Small wonder that Pakistan media played a major role in political awareness that resulted in highest turnout o 55% in elections 2013 that returned PML N to power.
Experts and analysts believe that senior politicians like Khawaja Asif should play a role to end draconian PEMRA rules to let Pakistan media industry play its role even better. Instead of ridiculing or unduly criticizing the entire media industry without knowing the facts is not expected from a senior politician like Mr. Asif.