RM1bil deal to provide digital terrestrial television in Malaysia

KUALA LUMPUR: MyTV Broadcasting Sdn Bhd has inked a framework agreement with Telekom Malaysia Bhd (TM) to provide digital terrestrial television (DTTV) services in Malaysia in the near future.

The agreement, which will result in TM receiving RM1bil over a period of 15 years, or an annual contract value of RM70.47mil, hinges on TM providing infrastructure and network services to MyTV.

TM would provide terrestrial distribution network services, satellite distribution network services, broadcast contribution network services, station facilities and infrastructure services, and operation and maintenance services, a press release issued by both parties said yesterday.

This will enable MyTV, which has been awarded the licence by the Government to operate the infrastructure and network facilities for DTTV in Malaysia, to migrate from analogue terrestrial broadcasting to digital nationwide by 2016, the release said.

MyTV will also be forking out an additional RM1bil in capital expenditure (capex) over three years to prepare its own infrastructure for the DTTV.

“We do have an agreement with TM, but there are other costs involved as well. As far as the (communication) towers are concerned, we are collaborating with TM. There will be a few gap-filler towers that have to be built, and this will be at our own cost,” MyTV group chief executive officer Nik Abdul Aziz Nik Yaacop said at a press conference yesterday.

MyTV chief operating officer Mohamed Redzwan Yahya added that the company’s own capex involved building its own transmitters and head-end, including providing set-top boxes for customer use.

“We anticipate a total market size of up to 6.8 million TV households in Malaysia. Our commitment is to provide two million set-top boxes to the needy through the Bantuan Rakyat 1Malaysia database. We hope to make some announcements on the pricing by the first or second quarter of 2015,” Nik Abdul Aziz said.

The first milestone would be the launching of 30 standard and high-definition channels targeted for the middle of next year, he said.

“(The) take-up (rate) has been good for the first 30. We will probably have about 80 channels after the whole project is completed. Note that we do not provide content but (will) act as a conduit for broadcasters to push TV content out to the viewers. So, matters such as advertising would be by the broadcasters,” Nik Abdul Aziz said.

“The initial basis of this is to provide free-to-air TV, but there would also be pay TV, movies-on-the-go and home shopping, which would be subscription-based between the viewers and broadcasters themselves, as we only provide the infrastructure,” he added.

Nik Abdul Aziz noted that television manufacturers may also decide to eventually distribute DTTV-capable TV sets once this service is available.

MyTV is also in discussions with Pos Malaysia Bhd for it to be MyTV’s main distributor as it has good reach, especially in the interiors.

At the same press function, Malaysian Communications and Multimedia Commission chairman Datuk Mohamed Shahril Mohamed Tarmizi said the provision of DTTV services was in line with the changing broadcasting technology today.

“This arrangement is possible under the regulatory framework under the law. Before this, you needed your own towers, transmitters, studios, etc, to be a broadcaster, but because of technology and digitalisation today, the broadcaster can choose which platform they want to be on. Companies can also share infrastructure now,” Mohamed Shahril said.

Meanwhile, Communications and Multimedia Minister Datuk Seri Ahmad Shabery Cheek said that analogue TV broadcast would be “switched off” by 2018, as the spectrum would need to be used for “other purposes”.

“This is the rough timeline and it is in line with the developments around the world to phase out (analogue) and move into the digital era,” he said at the press conference.