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FOUR NEW PAY-TV PLAYERS TO TAKE ON MULTICHOICE

MULTICHOICE, SA’s largest subscription-based satellite platform, will see its decade-long exclusive control over the pay-TV market come to an end in the next few months after the announcement yesterday that four new players had been licensed to operate.
The Independent Communications Authority of SA (Icasa) awarded broadcast licences to Telkom Media, On Digital Media (ODM), e.sat and Walk on Water Television, as well as incumbent MultiChoice, which had been told to apply for a licence to comply with new legislation.

The announcement ends MultiChoice’s monopoly and opens the market to competition and potentially billions of rands worth of investments in the broadcasting sector.

While there were originally 18 applicants vying for licences, Sentech made a surprise withdrawal of its application on Monday and Icasa said WorldSpace and Multichannel had withdrawn their bids earlier in the process. Sentech, which had applied alongside public broadcaster SABC, said it would release a statement today regarding its withdrawal.

The authority did not give reasons yesterday why it had chosen these five players over the other 15 applicants, but said it would have these details available in the next three weeks, following public hearings that are set to take place next month .

The specific conditions for the winning bidders’ licences still had to be set, said Marcia Socikwa, one of the regulator’s councillors.

“The hearings, which start on October 1, will set out the terms and conditions for each licence in the country,” said Socikwa.

Provided the licence holders did not ask for any extensions, they would probably be able to start broadcasting from December, but ODM, e.sat and Telkom Media are looking at next year .

“We would like to be ready within the next 12 to 16 months,” said Telkom Media chairman Connie Molusi.

ODM CEO Vino Govendar said the company would launch its offering by the second quarter of next year .

E.sat did not give specifics beyond that it would launch next year.

ODM said it was “not surprised” by Icasa’s decision, despite general speculation among analysts that the market would be opened up only to MultiChoice and one new player, due to space constraints.

Khulekani Dlamini, of Renaissance Specialist Fund Managers, said he had not expected such a high number, but said it was a positive move and was in line with Icasa’s previous statements that it wanted to get as many players into the market as possible.

“It’s a positive move for competition in SA,” Dlamini said.

Analyst Rajay Ambekar agreed the number was high.

He said “there was no way the market would handle four satellite subscription companies” and it was notable that those that had been awarded licences, apart from Walk on Water, which he understood was only a single channel offering and not a full subscription offering, all had “very deep pockets”.

Telkom Media has committed R7,5bn to developing its product offering over the next 10 years, while ODM has secured, together with its Luxembourg partner SES, R1,2bn to launch its product. E.sat has not disclosed how much it would invest, but through its holding company, Hosken Consolidated Investments (HCI), Ambekar believes it would be able to sustain itself for “at least five years”.

MultiChoice said it welcomed competition. It has ramped up its local subscription base by 140000 over the past year to 1,4-million subscribers.

“It will also stimulate growth of the pay television market and ensure that consumers are provided with choice and more diversity of content” MultiChoice SA CEO Nolo Letele said.

Asked whether content would be an issue, ODM’s Govendar said MultiChoice had “already reacted” by introducing its cheaper compact and DStv select products.

He said “the fight will be fought over quality, the choice you give your viewers, and the affordability”.

Source: Business Day – Thom McLachlan – Media Correspondent