The Independent Communications Authority of SA (ICASA) will carry out an inquiry into premium content in a bid to open up SA's monopolistic pay-TV market.
This comes after the authority conducted hearings with would-be subscription TV licensees last year, in a renewed effort to introduce challengers to Naspers subsidiary MultiChoice, which holds more than 95% of the market.
The lukewarm participation and interest in hearings for individual commercial subscription broadcasting licences was reminiscent of the authority's failed attempt at introducing pay-TV competition about six-and-a-half years ago. Eighteen companies initially applied for licences, but the number was whittled down to just five - Walking on Water, ODM, e-SAT, Telkom Media and MultiChoice Africa - after others withdrew.
Five became one as On Digital Media (ODM - parent of TopTV, now StarSat) became the last man standing and the only company willing to brave what has historically been a one-horse race in the mainstream pay-TV space.
Deukom TV - a German subscription channel that runs from MultiChoice's DStv platform - also pursued its granted licence beyond a business plan, but serves a niche market.
Struggling to gain traction in the market and to make ends meet financially, ODM was placed under business rescue in 2012 - a process that interim CEO Eddie Mbalo says is currently being wrapped up.
Dooming d'ej`a vu
Despite the seemingly doomed outlook, however, ICASA spokesperson Paseka Maleka says the authority now intends to conduct an inquiry into premium content to determine what mechanisms are available to prevent premium content from being a barrier to entry.
Regarding last year's hearings, Maleka says ICASA is finalising the process of considering applications and will announce its decision on successful or unsuccessful applicants "in due course".
Last July's public hearings saw presentations from five possible new licences for pay-TV broadcasting services from Close-T Broadcasting Network, Kagiso TV, Siyaya Free To Air, Mindset Media Enterprises, and Mobile TV.
But the terrain for new pay-TV entrants in SA is not smooth. Analysts have painted a bleak picture for aspirant pay-TV companies in a space that has been firmly in the clutches of one player for almost 20 years.
A document emerging from last year's Global Forum on Competition also reveals the extreme challenges StarSat - and any other pay-TV hopeful - face under the current status quo in SA.
The Organisation for Economic Cooperation and Development (Directorate for Financial and Enterprise Affairs) said the main concern was the nature of exclusive contracts concluded between content rights providers and broadcasters, and the impact of these agreements on competition in the downstream subscription television market.
"More specifically, the exclusive agreements between MultiChoice and premium content producers (rights holders). It is not only that the broadcasting rights are exclusive to MultiChoice that may be of concern to the commission, but that MultiChoice should end up as the owner of all of the rights available."
ICASA did not give details around its inquiry into premium content.
Asked if ICASA believes SA has a competitive pay-TV landscape, Maleka said it was the authority's intention to foster competition within the pay-TV market. "The authority licensed five subscription television broadcasting services in addition to MultiChoice. Save for MultiChoice, only TopTV/StarSat and Deukom are operational."
Mbalo says he believes ICASA should have stepped in long ago, when MultiChoice got wind of ODM's arrival and "went into a market where they had never played" with cheaper bouquets of limited channels.
He says he does not know why ICASA has again made a move to license new players.
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