Pay-TV licence applicant to invest R1.7bn

Johannesburg, 21 Sep 2006

On Digital Media (ODM), which earlier this month applied to the regulator for a commercial satellite subscription broadcast licence, will invest about R1.7 billion in the country if its application is successful.

CEO Mergan Moodley explains ODM has spent three years planning a comprehensive satellite TV bouquet, something to compete with existing operator MultiChoice.

"After extensive market research, we see a big opportunity to service the wider market of South African television viewers, not being catered for through content or price," he says.

Business structure

Backed by investment firm Kopano Ke Matla and broad-based BEE partners First National Media Investment Holdings, ODM may also benefit from Industrial Development financing (which has indicated an interest) if the licence application is successful, notes Moodley.

International satellite network operator SES Global Africa - operating globally and boasting about 100 million viewers in Europe - will be the core operational partner, he adds.

"Mpeg4 distribution technology is at the heart of ODM`s strategy, enabling it to use broadcast capacity more efficiently and introduce high definition television when the market demand arises," promises Moodley.

Assuming the Independent Communications Authority of SA (ICASA) awards ODM a licence, the satellite broadcaster`s service will begin between six and nine months after the awarding.

But Moodley says he has no idea when ICASA will announce successful applicants.

Likely services

ODM`s plan is to provide those who only receive SABC 1, 2, 3 and e-TV with an affordable pay-TV offering of about 40 channels.

Even though ODM is to be a mass-market player rather than a niche player, Moodley feels there will still be market share to capture, saying while MultiChoice has done very well, the market can grow initially by at least another 20%.

Consumers would subscribe to a basic package of perhaps 10 channels for a monthly fee, and then add to this by selecting other channels from the wider suite of options, Moodley says. He is unable to reveal the predicted costs to the consumer.