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South Africa opens pay TV market

Bidding for licenses begins Jan. 31

JOHANNESBURG — South Africa is finally opening up its pay TV market.

The Independent Communications Authority of South Africa is inviting applications for licenses in a six-month bidding period that begins Jan. 31.

This would end the monopoly of the Naspers-owned MultiChoice’s pan-African DSTV satellite platform. The Johannesburg-based service beams 55 TV channels to approximately 1.3 million subscribers in 50 countries in sub-Saharan Africa, with just over 1 million from South Africa.

The regulator has already received requests for licenses, according to Icasa spokesman Vimla Maistry, but he would not divulge how many or how long the licensing process would take once applications had closed.

A serious competitor could be a long-term concern to Naspers, which relies on MultiChoice for more than 70% of its operating profit.

“I can’t really see any credible competition being in place for some time,” says Abdul Davids, portfolio manager at Allan Gray in Cape Town. “It is one thing to get a license and another to build subscriber base and content.”

Davids says content providers could be reluctant to jeopardize their relationship with MultiChoice by providing programs to new networks. And without quality programming, building subscribers would be tough.

The first winners of the competitive new market are likely to be consumers, says Davis, with the prospect of more choice and price cuts to retain or attract subscribers.

Meanwhile, a spokesman for MultiChoice says the new licensees would welcome competition for which the service is ready.

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