The Ministry of Information and Communication (MIC) is considering restructuring the cable TV market. It is expected that only three national enterprises and five local enterprises would be retained instead of 40 currently.

Big problems seen on cable TV market

Deputy Minister of MIC Do Quy Doan said at a recent conference on radio and television broadcast programming that the development of TV stations has been “in disorder,” which needs to be reprogrammed.

Doan said a lot of enterprises have applied for the licenses to provide pay-TV services; therefore, it’s necessary to draw up a reasonable detailed program on service development which clearly shows the subjects and the scale of implementation.

Also according to Doan, Vietnam has committed to ASEAN to implement the TV digitalization in 2015-2020.

Tran Minh Tuan, Deputy Head of the Strategy Institute under MIC, said that there are four components in the strategy on radio and TV broadcasting development, including the content, service, infrastructure and user.

The content production has been undertaken by 67 radio and TV stations, both central and local. However, Tuan said that the quality of the programs produced by the TV stations in mountainous areas is low. Meanwhile, in order to make profit, TV channels try to broadcast as many ad pieces as possible.

To date, the coaxial TV service has been developing very slowly. Though 40 enterprises have jumped into the field, the service still cannot develop with just several thousands to several tens of thousands of subscribers for each enterprise. Especially, the enterprises have been utilizing backward technologies, which partially explains why it cannot attract users.

Tuan emphasized that it’s very difficult to draw up a development strategy for cable TV industry. Since there has been no reliable survey on the total demand and the scale of pay-TV services in Vietnam, it’s still impossible to calculate how many service providers should be on the market.

Meanwhile, the strong development of online video service has become a big challenge to the TV channels in attracting ad resources.

Telecom groups have also joined the cable TV, satellite TV or IPTV. However, the lack of transparency of the finance mechanism management, which Tuan has warned, may lead to the chaos in the market. The boom of free online TV services with attractive content would also influence people’s decisions to pay for TV services.

Cable TV stations would be restructured

Also according to Tuan, Vietnam strives to have digital terrestrial TV services to be provided in nearly all provinces and cities in lowland and midland by 2015, and to be provided in all 63 cities and provinces by 2020.

It is expected that 30-40 percent of households can watch pay-TV by 2015, while the figure is expected to rise to 60-70 percent by 2020. The growth rate of the pay-TV service is expected to be 25-30 percent in 2012-2015 and 10-15 percent in 2016-2020. Vietnam hopes to have the total turnover of 800-1000 millions of dollars from pay-TV service by 2020.

Regarding the investment capital, experts all believe that this is a complicated issue. With 20 trillion dong to be allocated by 2020, each of the type of video broadcasting (digital cable TV, IPTV, digital terrestrial TV, mobile TV) would get 5 trillion dong. And if dividing the sum of money to enterprises, each of them would get 1 trillion dong only.

“Is this feasible to develop infrastructure with just a modest sum of money, especially when most of enterprises are state owned?” questioned Tuan.

Therefore, Tuan has suggested retaining 3 national and 3-5 local service providers in every market segment.

Source: Buu Dien/ VNN