In what could be a major policy U-turn, Datuk Seri Rais Yatim is reviewing Astro’s exclusive 20 year operating licence as his ministry battles with the pay-TV company to include more government-friendly and 1 Malaysia programming.
The review carries grave implications on the government’s investment policies and guarantees at a time when foreign direct investment is falling in Malaysia apart from revenues for Astro, which is partly owned by state asset manager Khazanah Nasional Berhad.
It could also affect main shareholder T. Ananda Krishnan’s plans to re-list mobile operator Maxis Bhd, a RM2 billion exercise that would lead to liquidity in the local bourse after a request from prime minister Datuk Seri Najib Razak.
It is not known if the Cabinet is aware of the licence review. Astro began operations in 1996 after completing its state-of-the-art All-Asia Broadcast Centre in Bukit Jalil, Selangor and was listed on the Bursa Saham in 2003. Astro’s share price closed RM3.45, down 3 sen, yesterday.
Rais’s Information, Communications and Culture ministry had earlier tried to gauge the feasibility of an Internet Filter, ostensibly to censor pornography although critics said it was to silence online dissent. Najib has reiterated he will not allow internet censorship.
“There has been some communication on the review. Astro of course is refusing any changes,” a government source told The Malaysian Insider, adding it would involve contractual changes and reimbursement of losses due to the exclusivity now enjoyed by Astro.
He added no decision has been made at this point due to the delicate nature of talks.
Astro All Asia Network plc’s (Astro) subsidiary, MEASAT Broadcast Network Systems, now has an exclusive licence till 2017 for satellite direct-to-home (DTH) transmission in Malaysia.
It is understood former Information Minister Tan Sri Mohamed Rahmat allowed the exclusivity due to the small Malaysian market for pay-TV operations. Astro also provides the service to Brunei.
A rival terrestrial operation — MegaTV — run by the Finance Ministry and private station Syarikat Televisyen Malaysia Berhad (STMB) which runs TV3 ran aground after a few years while another service operated by tycoon Tan Sri Vincent Tan called MiTV failed to make headway.
Astro has had several run-ins with the ministry over its programming with government officials grumbling that opposition politicians get better airplay in several channels. The satellite TV operator says it gives equal airplay to politicians from both sides of the divide.
To please the government, Astro recently launched a month-long series of 150 programmes, carrying the themed ‘NegaraKU, The Best of 1Malaysia’ to celebrate Merdeka and 1 Malaysia.
Rohana Rozhan, Astro’s chief executive officer, had said the premiere titles will showcase Malaysia’s rich diversity, achievements, personalities, beauty, cultures and nature to the world from Aug 15 to Sept 15.
“Our strong partnerships with global media networks like Discovery, National Geographic, CNBC, Asian Food Channel, Animal Planet, History Channel and many more, have enabled us to promote our country and our people to the world via our international partners.
“We also hope to inspire pride in Malaysians through our showcase of the greatest episodes highlighting the best of 1 Malaysia,” Rohana said.
1 Malaysia is Najib’s slogan after taking over as prime minister last April and Rais, who has been in government for 35 years, has taken great pains to get private television operators to showcase the theme.
His officials have taken special umbrage over talkshows in Astro’s own Awani channel and Al-Jazeera, privately blaming them for the wave of dissent against the Barisan Nasional government, particularly by ethnic Indians in a rare November 2007 protest.
A recent promotional trailer by Discovery Channel highlighting its series Enigmatic Malaysia also caused some trouble with giant neighbour Indonesia for accidentally promoting the Balinese Tari Pendet as Malaysian. Discovery has apologised for the error.
Astro’s main shareholder Ananda was earlier set to restructure the satellite television operator in a RM9 billion transaction that will rank as the region’s largest corporate exercise so far this year.
Under the proposed corporate deal, Astro’s two main shareholders — the Ananda-controlled private investment company Usaha Tegas and Khazanah — will acquire the satellite television company’s fledgling and still unprofitable international business interests.
Under the transaction, Khazanah was to receive close to RM340 million from the dividend payout, bankers with knowledge of the deal said. Khazanah was also to retain its 22 per cent interest in the listed Malaysian entity and control a roughly 33 per cent stake in the private vehicle that will house Astro international business.
Ananda’s Usaha Tegas and its other affiliates will control the remainder in the yet-to-be-named private entity, the bankers said. But the deal was called off.
Over the past decade, the 71-year-old Ananda — who is ranked as one of South-east Asia’s wealthiest tycoons — has emerged as a powerful force in the region’s multimedia sector, with Astro and Maxis forming the cornerstones of his new-media empire.
Astro, which has invested over RM1 billion to develop its own content for the region’s large Malay-language speaking population, beams its services to more than three million households currently with 116 channels.
But results from its overseas investments have been mixed. Its foray into Indonesia, under a joint venture project with the powerful Lippo Group controlled by the Riady family, has been a disaster.
Astro is now caught in a messy legal wrangle with Lippo and has been forced to make provision for losses of just over RM1 billion for its investment in the Indonesian venture.
The company has moved into the entertainment and media markets in India, China and other parts of South-east Asia, and bankers estimate that Astro will require investment of over RM1 billion in the next three years to develop these markets.
Revenues from the profitable Malaysian venture is key for its growth and any change in the contract could have adverse effects, analysts say.
[The Malaysian Insider]
Geronimo's Take: If this fella Rais Yatim is so much to touch ASTRO, I will give up my subscription. We don't need to be bombarded with more UMNO propaganda via this medium. After the poor services rendered to me by ASTRO, this could probably be the last straw.