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e.tv SEEKS RIVAL TO LOOSEN SENTECH’S GRIP

FREE-TO-AIR broadcaster e.tv has called on companies to submit a proposal for signal distribution, indicating that it wants to reduce its heavy reliance on state-owned carrier Sentech.
The move was prompted by changes in the licensing environment and the high transmission costs that broadcasting companies are paying.

However, Sentech could potentially lose revenue made from signal distributions.

According to the SABC’s 2008 annual report, it spent over R378 million on signal distribution and linking.

About 400 companies have been awarded network licences, which allows them to carry telecoms and broadcasting services.

e.tv has. also applied for a satellite-network licence to have greater control of its costs and increase its coverage.

e.tv would not comment on whether it was cutting ties with Sentech as it did not want to make any comments that would “prejudge its request for proposals”.

The company said the recent regulations on the migration to digital obliged broadcasters to provide the name of their preferred signal distributor for the new digital platform.

“The issuing of the tender for the provision of signal for multiplex 2 is the start of e.tv deciding with whom they want to work with regarding digital terrestrial television,” it said.

Multiplex allows television stations to air more than one channel at a time.

Sentech, which will bid for the e.tv tender, said in its 2008 annual, report that the introduction of competition required it to remain competitive and satisfy customer demand.

“Sentech realises these competitors have deep pockets in terms of funding, advertising and marketing. The competition risk is exacerbated by the lack of funding and staffing issues… including the enticement of staff away from Sentech by the new competitors.”

Asked whether it would lower its prices, given that there could be competition in the market, Sentech said it had “engaged the services of a renowned international consulting firm to benchmark its tariffs and ensure that they are in line with international best practices”.

Sentech’s monopoly in signal distribution puts broadcasting companies such as e.tv at a disadvantage when negotiating a signal distribution contract because there is nothing to compare Sentech’s fees with.

Sei Mukoma, a lawyer and broadcasting and competition policy analyst, said despite competition, the state-owned company “owns most of the high sites and the signal distribution infrastructure; it will take some time” for Sentech to lose market share in broadcasting signal distribution.

Source: Cape Times – Thabiso Mochiko