South Africa opens up pay TV mart

Chosen four selected from 18 submissions

JOHANNESBURG — MultiChoice’s monopoly in the local pay TV market ended Wednesday with the announcement of four feevee license holders by the Independent Communications Authority of South Africa (Icasa).

They are: Telkom Media; e.sat, part of Hosken Consolidated Investments (HCI), which also owns commercial terrestrial channel e.tv; Walking on Water, a niche Christian broadcaster; and On Digital Media, whose shareholders include trade union federation Cosatu’s investment arm, Kopano ke Matla, the Industrial Development Corp. and the African subsidiary of European satellite operator SES.

Selected from 18 submissions made in June, Icasa was expected to announce the license holders early next year. The date was unexpectedly brought forward amid rumbles among the potential license holders that MultiChoice was moving to defend its territory by tying up exclusive content deals.

According to MultiChoice spokesman Jackie Rakitla, “it’s been business as usual” and the company had not done anything “sinister” in the way it had secured channels.

Chief executive Nolo Letele welcomed the competition, saying it would grow the pay TV market for everyone, although analysts are skeptical that South Africa can support so many players.

Pay TV came to South Africa in 1986 with M-Net’s analog service, launched by media group Nasionale Pers, which 12 years ago bowed the MultiChoice DStv satellite service. It has 1.4 million subscribers locally and broadcasts to 50 countries in Africa from its Johannesburg base.

Analysts expect Telkom Media to become MultiChoice’s biggest competitor, and Letele agrees.

Telkom Media has a comprehensive fiber network, which will enable it to deliver content to homes effectively and cheaply, and it has allocated $1 billion to launch its proposed subscription broadcasting, video-on-demand and TV-via-broadband services, which will offset sagging fixed-line phone revenues.

Its 15-channel bouquet will include a 24-hour news channel, sport, movies and music, aimed at middle-income consumers, with packages starting at $15 a month. Telkom Media has already hired some of the country’s top journalists for its news channel, lured from pubcaster the SABC and e.tv. 

“Telkom Media is the front-runner, they will be our toughest competitor. They are throwing a lot of money at pay TV,” said Letele.

MultiChoice said it would compete at the lower end of the market by launching cheaper channel bouquets rather than cutting the price of its traditional premium DStv package, which costs over $60 a month.

The company also plans to launch technologies like mobile TV, high-definition TV and video-on-demand, said Letele.

E.sat has proposed a 21-channel package based on movies, sport and a 24-hour news channel, while ODM presented a proposal for 40-to-50 channels for between $20 and $40 a month, allowing users to choose, and pay for, only what they watch.

ODM said it had secured more than $15 million in start-up capital through its shareholders.

Walking on Water, a one-channel satellite offering, said it would offer a wide range of programs based on Christian lifestyle principles.

Icasa must still determine specific terms and conditions for the winning bidders’ licenses, and these will be thrashed out at public hearings due to start Oct. 1.

Provided the license holders don’t ask for extensions, they would probably be able to start broadcasting from December.

But, in practice, viewers may have to wait longer for the services to hit their screens. ODM, e.sat and Telkom Media have all indicated start dates in the coming 12-18 months.

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