New pay television provider e.sat has deviated from its initial plan of providing a subscription broadcasting service and will now supply channels to MultiChoice, as it considers the market too small to accommodate more than two players.
Although e.sat did not say as much, this could mean the company plans to forfeit its newly acquired licence.

e.sat is among five companies that were granted pay TV licences two months ago.

Its decision will reduce the number of pay TV players to four: MultiChoice, On Digital Media, Telkom Media and Walking on Water.

During the hearings on pay TV in May, e.sat argued that the local market could sustain only two pay-TV operators.

When four pay TV licences were issued in addition to the MultiChoice licence, e.sat had decided to explore alternative opportunities as a content aggregator and channel supplier, said chief executive Marcel Golding.

e.sat, the sister company of free-to-air channel – both owned by JSE-listed Hosken Consolidated Investments – will kick-start its plans by launching a 24-hour news service on MultiChoice’s DStv platform.

Golding said the company had to decide on a “sensible deal”, as it was not practical to have a number of platforms in such a small market.

“When we decided to become a channel supplier instead of a platform operator, our biggest priority was to secure as wide a reach as possible for South Africa’s first independent 24-hour news channel,” he said.

“We will have 1.2 million [MultiChoice subscribers] on day one of broadcast.”

The Independent Communications Authority of SA (Icasa) has not yet issued the licences. It is in the process of finalising the terms and conditions of each licensee.

Industry commentators say e.sat is likely to withdraw its licence and instead focus on its intentions to provide programming to MultiChoice.

Icasa councillor Zolisa Masiza would not speculate on whether e.sat would still receive a licence when the regulator formally issues them next March.

He said the regulator was still in the process of finalising the licence conditions.

e.sat had not yet told Icasa of its decision to change from being a subscription broadcaster to a content supplier, he said.

In addition to the news channel, e.sat will produce a number of channels for the DStv platform over the next few years. and e.sat also plan to distribute programming and channels worldwide, with the main focus on emerging markets in Africa and the Far East.

In Africa, has already entered into strategic partnerships with other free-to-air broadcasters to develop a pan-African television business.

Telkom Media is also planning to launch its own 24-hour news service by next June.

This year SABC launched its 24-hour news channel on Sentech’s Vivid platform and plans to move it to DStv.

Source: Business Report – Thabiso Mochiko