Sat Channel regulaors and SEC should take this sector as a test case for free investment regime. It might be questioned whether there is an economic justification of this high interest in this sector - however, the approach should be professional. This disproportionate interest, however questionable that might be, should be seen as an opportunity to benefit the national interest (i.e. mature the investment scenario).
If we were the regulator of this sector, we would consider doing the following. Give just several additional license - at least one through auction for a for-profit company (general purpose channel that are foreign language channel), one TV-guide type channel, and at least another for a BBC type non-profit company under social business model, if there is any interested party or a group. In case of for-profit licenses, auction should be used to determine the winner to get a direct financial measure of the interest that numerous corporate houses are showing in this sector (see the following link: http://www.ittefaq.com/content/2008/04/30/news0909.htm ). In case of not-for-profit social business type request, a beauty contest type competition should be arranged to determine the winner - similar to what is followed in many scandinavian countries while giving out licenses.
After this auction is done, there will still many interested investor who want to have a play in this sector. How to translate those market interest into investment that will eventually increase the benefit of the consumers? What to do with that?
So, at the same time, in cooperation with different agencies and the securities exchange commission, we would give a short deadline time for all the locally licensed satellite channel companies to go public through IPO. If the auction value was over-blown (which should be expected demonstrated through these numerous applications), allow the existing satellite companies to value their brand while assessing the value of the company.
Once these companies are public (listed, IPO), do incremental deregulation in the sector - like they have in many other countries. Allow the provision of hostile bidding procedure where interested parties can force AGM by offering more than market price of any company - thereby forcing a transfer of ownership. Off course, there has to safeguards on the issue of national interest so that the local companies do not become easy prey of the foreign investors. We would leave the details for the experts. (This particular practice will an important lesson for our capital markets and the regulator, the SEC. We have not develped our market yet to allow this kind of transactions, however, if we were to progress ahead, these type of rules needs to be examined and implemented as a step by step process to ready the market for global competition).
If we were the regulator of this sector, we would consider doing the following. Give just several additional license - at least one through auction for a for-profit company (general purpose channel that are foreign language channel), one TV-guide type channel, and at least another for a BBC type non-profit company under social business model, if there is any interested party or a group. In case of for-profit licenses, auction should be used to determine the winner to get a direct financial measure of the interest that numerous corporate houses are showing in this sector (see the following link: http://www.ittefaq.com/content/2008/04/30/news0909.htm ). In case of not-for-profit social business type request, a beauty contest type competition should be arranged to determine the winner - similar to what is followed in many scandinavian countries while giving out licenses.
After this auction is done, there will still many interested investor who want to have a play in this sector. How to translate those market interest into investment that will eventually increase the benefit of the consumers? What to do with that?
So, at the same time, in cooperation with different agencies and the securities exchange commission, we would give a short deadline time for all the locally licensed satellite channel companies to go public through IPO. If the auction value was over-blown (which should be expected demonstrated through these numerous applications), allow the existing satellite companies to value their brand while assessing the value of the company.
Once these companies are public (listed, IPO), do incremental deregulation in the sector - like they have in many other countries. Allow the provision of hostile bidding procedure where interested parties can force AGM by offering more than market price of any company - thereby forcing a transfer of ownership. Off course, there has to safeguards on the issue of national interest so that the local companies do not become easy prey of the foreign investors. We would leave the details for the experts. (This particular practice will an important lesson for our capital markets and the regulator, the SEC. We have not develped our market yet to allow this kind of transactions, however, if we were to progress ahead, these type of rules needs to be examined and implemented as a step by step process to ready the market for global competition).
A detailed approach following the broad principles outlined here should be examined to infuse fresh energy in our media sector which is currently going through a dormant phase - as far as creativity and constructive engagement is concerned. We think such an approach will also help settle the question of a sustainable number of businesses for a healthy competition. Also, if a sophisticated policy planning and support is provided to the media industry, this could be another focus area where Bangladeshi economy could aim to become a hub of Asian Engine serving all the major markets (India, China and East Asia).