S. Africa plays pay TV tug of war

Market told to unify set-top boxes

JOHANNESBURG — South Africa’s burgeoning pay TV market is facing a battle over set-top boxes, with incumbent MultiChoice fighting the federal regulator’s plans to impose a one-size-fits-all box.

Regulator Icasa last month named four new pay TV license holders — Telkom Media, On Digital Media, e.sat and Walking on Water — as part of its strategy to open up the market in South Africa.

An added factor is the move to digital broadcasting in South Africa over the next few years. As consumers require decoders to access high-definition TV on a digital platform from terrestrial broadcasters SABC and e.tv, it is expected the government would require a set-top box for both digital platform and pay TV access.

Consumers are balking at buying a set-top box for each feevee, and Icasa commissioner Zolisa Masiza says the regulator will look at requiring all decoders to be interoperative.

Telkom Media has already indicated it will make its decoder accessible to other players, but MultiChoice has invested heavily in the development of its decoder infrastructure over the years and is reluctant to allow new players to use its equipment. It remotely blocked software on its decoders to stop other operators from using them three years ago when a firm sold cards that could be inserted into MultiChoice boxes to allow consumers access to a pornographic channel based in Spain.

MultiChoice sees its investment in decoder development as part of its strategy to lure and retain customers by offering them value-added services, such as PVRs. For example, this month it is launching an on-demand service to operate with the set-top box.

Meanwhile, Altech Technologies, which has been the sole manufacturer of MultiChoice’s decoders, is licking its lips at the prospect of the business opportunities created by four new players entering the market.

Altech chief executive Craig Venter says the company owned the intellectual property of the PVR decoder, so could sell it to the four license holders.

“We expect their entrance to be good for our business,” Venter says. “It has taken us 10 years to become a global player in decoder software development and manufacturing, and today we have about 5% of the world’s market, supplying operators such as Sky Brasil, Showtime in Dubai and Sky Mexico.”

Venter says Altech already has the infrastructure and software engineers to develop all decoders from low-cost to dual view and PVR — with 280 software engineers at Altech UEC Multi-media based in Durban as well as others at production facilities subcontracted in Thailand and India.

Venter says there could be other opportunities for Altech to offer “package deals” to consumers.

“We could offer fixed telephone through Neotel or Telkom, Netstar car track and mobile phone packages through Autopage Cellular. We could also use our position as reputable decoder makers to include a decoder and subscription to a pay TV operator for a fixed amount a month.”