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New interest in pay-TV licence

15 Apr 2009

Listed fixed-line operator Telkom's decision to pull the plug on its pay-TV venture, Telkom Media, has resurrected interest in its operating licence from two black-owned communications firms.

The decision has two implications — the Independent Communications Authority of SA (Icasa) can either withdraw the licence or Telkom Media can sell it on the market.

Multimedia and production firm Black Earth Communications and IT company Goal Technology Solutions — which failed to secure pay-TV licences in 2007 — are hoping the licence will be sold on the market.

When Icasa awarded five pay-TV licences in 2007 in a move expected to end MultiChoice's 20-year-dominance, many said the market was too small to accommodate so many players.

Rather, what it needed was a challenger with deep-enough pockets to take on the DStv operator, listed media giant Naspers' most profitable asset.

Telkom Media was thought to be it, backed by Telkom's huge R7bn investment. But Black Earth Communications cofounder Andrew Jones disagrees. “All you need are brains and innovation. The whole idea that you need deep pockets to survive is a myth perpetuated by MultiChoice. The most successful pay-TV entities around the world, including MultiChoice itself, started small and grew from there.”

Goal Technology Solutions CEO Adrian Maguire says though they've since gone the online video-on-demand (VOD) route as part of their entry into broadcasting, a pay-TV licence is still of interest. “Internationally, VOD has been very successful, but in SA, due to the lack of [Internet] infrastructure, TV broadcasting is still best.”

Meanwhile, Telkom Media shareholders are meeting next week to wind up the firm. Among its minority shareholders are award-winning filmmaker Anant Singh's Video Vision Entertainment (15%) and MSG Afrika Media (5%).

Asked for comment, MSG Afrika's co-founder and CEO Given Mkhari said it would be improper to pronounce on the matter before the shareholders' meeting.

It's widely expected that Telkom Media will sell its licence on the market.

Meanwhile, Icasa has not ruled out the possibility of offering satellite free-to-air broadcast licences in future, all in a bid to increase competition in the market.

Source: Financial Mail

Published courtesy of
.