South African mobile operator Vodacom plans to formalise its entry into the broadcasting and multimedia market, while fellow Telkom subsidiary Telkom Media prepares to aggressively compete with MultiChoice in the pay-TV arena.
The mobile operator announced over the weekend that it has secured an exclusive pay-TV agency agreement with MultiChoice.
"With cellphone penetration in SA at more than 80%, Vodacom is constantly looking for opportunities to expand its growth horizontally in the market," says CEO Alan Knott-Craig in a media statement.
Knott-Craig notes Vodacom has a strong subscriber base of 23 million customers in SA, and the distribution and marketing know-how that could lead to significant growth in the satellite pay-TV market.
"With less than 10 million TV sets and fewer than two million satellite pay-TV subscribers in SA, we can expect strong growth as Vodacom offers the most affordable satellite pay-TV so far available," he says.
Vodacom is not a new entrant to the mobile TV market. The company already has 33 000 mobile TV users through its Vodafone live! programme. Additionally, Vodacom is engaged in a 17-channel, digital video broadcast to handset pilot with MultiChoice.
"For the first time, South Africans will be able to subscribe to satellite pay-TV for as little as R139 per month and choose one of the two DStv Select bouquets of channels they'd like to view," Knott-Craig says.
Appearing before ICASA
Meanwhile, Telkom Media will argue before the Independent Communications Authority of SA (ICASA) tomorrow as to why the regulator should grant it a pay-TV licence.
Telkom, which owns 50% of Vodacom, invested R7.5 billion in Telkom Media, and owns a 60% stake.
World Wide Worx MD Arthur Goldstuck says there is a strategic conflict of interest in Vodacom competing with Telkom Media in the broadcasting arena.
However, Telkom has historically not had a direct influence on Vodacom's strategic direction, and this should not change. "Regardless of this strategic conflict, the consumer will benefit from the choice that comes about from the competition," he says.
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