Market Insight

Turkish regulator awards 33 DTT licences

April 21, 2013

Constantinos Papavassilopoulos Constantinos Papavassilopoulos Principal Research Analyst, Service Providers & Platforms

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Turkish regulator, the Radio and Television High Council (RTUK), has awarded 33 national digital terrestrial TV (DTT) licences, following an auction procedure, to a range of private broadcasters and thematic channel operators.

According to the plan prepared by RTUK, the 33 licences were divided into the following categories: three HD thematic Channels, eight HD general entertainment channels, 11 SD general entertainment channels and 11 SD thematic Channels. In the first category (HD Thematic Channels) only four applications were received and the licences went to the highest bidders, Al Jazeera Turk, NTV News and A Haber - all news-related thematic channels. Each of the three channels had to pay a sum of 39.4 million Turkish liras (the equivalent of €17m).

RTUK received a total of 13 offers for the HD general entertainment channels and the eight highest bidders which were granted licences had to pay an amount between 51.2 and 48.6 million liras each (the equivalent of €22m and €20.7m respectively). The majority of the broadcasters who won these licences are established firms in the Turkish media landscape (DTV Haber, Samanyolu TV, AKS Televizyon, Isil Televizyon). For the 11 SD general entertainment channel spots the regulator received 14 offers and the successful bidders had to pay a significantly lower sum (€11-12m) each. The lowest fee (€450,000) was paid by each one of the thematic SD channels that were granted the remaining 11 licences.

The total amount of money collected from the DTT licence-auction was 419m Turkish liras (€178m).

The licensing of regional channels will take place this summer.

The Digital Migration Plan predicts a total of eight multiplexes: two have been assigned to the public service broadcaster, TRT, five are assigned to national commercial broadcasters and one multiplex to regional and local channels. Currently, there are no plans for pay DTT and no request for encrypted channels have been forwarded so far to the regulator. Each DTT broadcasting licence has a duration of 10 years. The HD channels will be distributed to four (out of a total of five) multiplexes assigned to national commercial broadcasters. According to RTUK, the capacity of each multiplex is sufficient to carry up to 11 SD channels. 

Taking into account the inclusion of HD channels as well, the regulator has come up with three possible permutations (with up the three HD channel per multiplex):

  • one HD channel plus eight SD channels (a total of nine channels in one multiplex);
  • two HD channels plus five SD channels (seven channels);
  • three HD channels plus two SD channels (five channels).

The DTT Licensing process can be deemed a success for both the regulator RTUK and the Turkish government. It has attracted the interest of the major FTA commercial TV operators of the country as well as one foreign-owned company, Al Jazeera. All interested parties are actually betting on the high prospects that the Turkish TV market holds. Furthermore, the auction has generated a considerable amount of money which is a vote of confidence for the future of the Turkish TV market. At a time when in neighbouring markets to Turkey's the television business is in recession and advertising revenues are declining, the Turkish market has growth potential. TV advertising expenditure in Turkey was €1.4bn in 2012 and is forecast by IHS Screen Digest to grow to €1.7bn in 2016. Pay TV revenues are forecast to increase from €788m in 2012 to €1.3bn in 2016.

The digital transition plan that the regulator RTUK has formulated is an ambitious one. It establishes a region-by-region analogue shut off schedule which will lasts for barely two years, with the final switch off set for 2 March 2015. The successful implementation of a switchover plan in a country with such a diverse geomorphology (around 6,000 transmitters need to employed, five times as many as in the UK) in such a short period of time is challenging. The first digital terrestrial transmissions will start in November 2013 from the capital Ankara, but within a year other large metropolitan areas (like Istanbul, the largest Turkish city, or Bursa, the fourth largest) will also start receiving DTT TV signals. By the end of 2013, around 4.5m TV households will be able to receive digital terrestrial TV.

Combining HD with SD channels on the same multiplex is technologically feasible, especially since Turkey has chosen the latest (and best in terms of providing extra capacity accommodating more channels due to superior compression characteristics) standard, DVB-T2, together with MPEG-4 digital compression standard. The offering of HD channels will certainly enhance the appeal of the DTT platform. Currently in Turkey, a total of 74 HD channels are accessible to Turkish viewers (according to IHS Screen Digest data) but the majority, 67, are encrypted. All platforms offer HD channels but the majority (59 channels or 79 per cent of the total) are offered by satellite operators. Around 1.5m HD TV sets were sold in Turkey in 2012 and in 2013 the figure will reach 2m HD TV sets. Local manufacturers, like Vestel and Arcelik, are about to benefit from the proliferation of HD TV sets. Turkish companies produce around 20 to 25m TV sets per year and half of that number is exported, mostly to Eastern Europe, the Balkans and the Middle East.

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