Pay-TV race is on

By Christelle du Toit, ITWeb senior journalist

Johannesburg, 22 Jul 2008

On Digital Media (ODM) has become the first pay-TV licensee to receive its licence and, even though it only plans to be on-air next year, hopes to beat Telkom Media to it.

This morning, ODM director Vino Govender said the company wants to be operational (set up its offices and have staff working there) within 60 to 90 days, with broadcasting starting around June/July next year.

While analysts have said competitor Telkom Media might be on-air in a couple of months, if it manages to source funding, Govender says he does not believe this will be easily achieved and ODM still hopes to be the first alternative to MultiChoice.

"We understand that if there are major changes in Telkom's shareholding, there will be a regulatory process with public hearings, etc. Whether this will happen in two to three months is questionable," he says.

However, Chris van Zyl, spokesman for Telkom Media, denies this. He says, while the company has to wait for a backer before it can go on air, the incumbent shareholder (Telkom) will not choose someone as a partner that will cost it its licence.

"The shareholding has not changed yet and if there are changes, there is provision in the licence to tell ICASA about it within seven days," he explains.

He says the general terms and conditions of the licence granted by the Independent Communications Authority of SA (ICASA) have been met and the individual process is still proceeding.

Media lawyer Michael Silber, of Michalsons Attorneys, says the process could go either way. According to him, the licence does provide for some changes in shareholding, but depends on the extent of these changes if the licence remains in place.

"If they try to sell the licence to someone else, it's more onerous, but under the licence they can sell share incentives to executives and just issue a notification to ICASA," he notes. "They don't necessarily need to be re-licensed."

ICASA could not be reached for comment at the time of publication.

Significant head start

Five companies - ODM, Telkom Media, eSat, Walking on Water and MultiChoice Africa - were awarded pay-TV licences in September 2007. Since then, eSat as decided to withdraw from the broadcasting race, and e-tv has opted to be a content provider for MultiChoice.

In November 2007, ODM launched a new SES (Soci'et'e Europ'eenne des Satellites-Astra) satellite that allows it access to more than 1 000 analogue and digital radio and television channels.

Craig Terblanche, business and technology advisor with Marketworks, says the pent-up demand for pay-TV is such that it might well compare to the take-off of cellphone technology in SA.

"To be first in the market would be significant," he says. However, "the market still has to be educated on what these offering bring - whether you are first or second to the market, you will have the same challenge."