- September 13, 2007
- Posted by: admin
- Category: Media & Broadcasting
Icasa surprises industry by handing out four new pay-TV licences Thorn McLachlan Media Correspondent
THE country`s largest and most formidable satellite pay-television company, MultiChoice, will have to share its playground with four new players —or will it?
The question now arises as to whether the market size, as yet undefined, is large enough for everyone to survive without a regulator overseeing their decisions, or whether the Independent Communications Authority (Icasa) will have to impose conditions to assist the new entrants.
Many industry commentators predicted that no more than three licences — at a push — would be awarded overall, but yesterday saw the surprisingly bold introduction of four new players to join MultiChoice: Telkom Media; On Digital Media (ODM); e.tv`s joint offering with Hosken Consolidated Investments, e.sat; and a Christian religious platform called Walking on Water.
MultiChoice, which operates mostly in the upper income market, has been the sole pay-TV player for more than a decade. It aggressively grew its subscriber base 10% over the past year, boosting the total number of viewers to 1,4-million.
While the new entrants have mostly offered cheaper services as their major selling point, MultiChoice has already begun pushing less pricey products into this market to plug any gaps, leaving the newly established industry very little more to compete over other than quality service and affordability.
Icasa councillor Marcia Socikwa said a hearing process early next month would hear submissions from the licence holders and other broader stakeholders being made in order to establish the terms under which each licence would have to operate.
While the new licensees may disagree, they will largely be operating in a vacuum of information with little actual knowledge of the size of the market. Icasa agreed that this was an issue, adding that this had forced the authority to follow its own rules.
“Ultimately we could not make our decision based on market size; we had to make it based on the extent to which the applicants complied with the invitation to apply,” said Socikwa.
The ITA document mostly covered issues such as increasing accessibility to pay-TV through affordability, as well as empowerment shareholdings and ensuring the candidates have sufficient funding to keep their heads above water through the start-up phase.
Telkom Media has stated before that it expects the current pay-TV market to double by 2012. This, it believes, factors in 800 000 new satellite subscribers as well as 300 000 of its own subscribers on its premium, cablebased IPTV package.
MultiChoice already has about 1,2-million South African subscribers, while according to ODM`s market research, it plans to enter a further 1,8-million untapped households and be up and running by the second quarter of next year.
Telkom Media CE Mandia Ngcobo said proper intervention from the regulator and the Competition Commission was needed to ensure a level playing field. “We would like to see the market aligned with international best practice, which we do not believe is the current situation.” Telkom Media is looking at beginning its operations within 12-16 months, according to chairman Connie Molusi. It would offer various services using satellite systems, dedicated broadband networks (IPTV) and the internet.
ODM said that any measures to ease access into the market would be welcomed.
E.sat chief operating officer Bronwen Keene-Young echoed the other entrants` views that the two major areas which would need regulating would be the use and capability of set-top boxes in receiving signals from multiple broadcasters. “You can’t have four different set-top boxes for consumers that want to buy multiple services.”
She said another issue would be the cost of programming, specifically movies. It is understood that sport and movies tend to drive pay-TV and Keene-Young said there were only six large international studios controlling the majority of the content consumers wanted. MultiChoice had already begun tying up rights.
Source: Business Day – Thom McLachlan