New players for SA subscription TV

By Damaria Senne, ITWeb senior journalist

Johannesburg, 01 Sep 2006

Sentech and Telkom have applied for licences to enter the subscription TV market.

Yesterday, Sentech, in partnership with the South African Broadcasting Corporation (SABC), lodged an application for a TV subscription licence with the Independent Communications Authority of SA (ICASA).

Telkom Media, a private company formed by the fixed-line operator in partnership with a 41% black economic empowerment partner, also applied for a commercial satellite and cable subscription broadcast licence.

ICASA says it received 18 applications for pay-TV licences, but was unable to confirm how many will eventually be issued. The number of licences will be determined by the results of the regulator`s deliberations, a spokesperson says.

Affordability, local content

New entrants will compete with Naspers` DSTV network, which has 55 channels.

Two of the key issues the Sentech/SABC partnership and Telkom Media hope to address are affordability of pay-TV for the mass market and local content provision.

The goal is to substantially broaden access to pay-TV services for the local population and open the gateway to new convergent services, says Wally Beelders, Telkom`s chief sales and marketing officer.

Beelders says while subscription TV has been licensed in SA since 1986, penetration levels have been low, as offerings were aimed at the high-income bracket, and failed to address the mass market.

He refers to Telkom Media`s research, which shows that over 40% of South African households are interested in and willing to pay for satellite TV services. This is a hugely untapped market that is not addressed by current pay-TV services, he says.

"Entry into this market cannot be purely for commercial interest, but must also serve the public interest," says Sentech CEO Sebiletso Mokone-Matabane in a media statement.

The SABC`s main contribution to the partnership will be the provision of content, she says. The broadcaster will use the additional platforms, provided by Sentech as technology partner, to grow the local content industry.

Local sport and content is also important for Telkom Media, as it satisfies the demands of its target audience, explains Beelders.

Anant Singh, CEO of Videovision Entertainment, one of Telkom Media`s partners, says Telkom Media will establish relationships with the independent TV production sector to provide an outlet for both established production companies and new talent. The promotion of new interactive technologies, such as user-generated content, will provide a much-needed stimulus to the local digital media industry, says Singh.

Proposed offerings

Telkom Media says it will offer media and entertainment services - satellite pay-TV and cable TV (IPTV).

A basic bouquet comprising locally compiled subscription television channels will offer entertainment, 24-hour SA news, movie, sports, music, home shopping and education channels.

MultiChoice, which was not required to have a broadcasting licence prior to legislative changes in broadcasting in 1999, also applied for a commercial satellite and subscription broadcast licence. MultiChoice broadcasts over 50 video and 60 audio channels, 24 hours a day and has over a million subscribers.