Telkom's deadline for the sale of Telkom Media has once again been extended.
At the end of last year, CEO Reuben September announced the deal was expected to be concluded by the end of December 2008. However, the company says the unnamed “interested consortium” planning to buy the media businesses had to deal with “certain governance issues”.
According to Telkom, these issues could not be addressed over the Christmas period and would be attended to over the next month. Telkom will not disclose the name of the interested party.
No respite
More than a year after Telkom Media was awarded its commercial broadcasting licence, the company still sits in limbo, waiting for a possible investor handover. Parent company and 66% shareholder Telkom decided to reduce its investment in the broadcaster in March, just before Telkom Media's planned mid-year launch.
Telkom Media's spokesman, Chris van Zyl, said last year the company was hoping the announcement would be made at Telkom's annual general meeting; however, no communication around Telkom Media was released at that time.
Telkom's international financial statement (20F), published in June last year, says the telecoms giant had already invested R326 million (up to the end of March this year), and was required to provide an impairment provision of R217 million. “If Telkom is not able to procure a purchaser for its investment, it could incur additional losses from the investment, and its reputation and relations with ICASA could be harmed,” stated the report.
Telkom's decision to walk away from its broadcaster has also raised questions around its rights to a licence. However, the Independent Communications Authority of SA (ICASA) may well be waiting for a decision around the shareholding before it makes a conclusion around the licence itself. ICASA was not available for comment at the time of publication.
Ready and waiting
Telkom Media has been ready to launch since November last year, when it announced details on technology purchases and infrastructure. Expected technologies included services over satellite, online and IPTV. Van Zyl said, at the time, that the company had researched best of breed technologies to ensure it is able to provide its content over the various platforms.
The company was also in discussions with several content providers for entertainment and sports shows that were expected to go live anytime between June and August. Van Zyl could not elaborate on what the company is currently doing with respect to content development.
Since its launch, Telkom Media made more progress than its new pay-TV competitors and was tipped by analysts as the leader in the new pay-TV applicant race. Before Telkom decided to pull its investment, the company was also expected to provide stiff competition to incumbent pay-TV broadcaster MultiChoice Africa.
Other pay-TV licensees were E-sat, which bowed out of the race, favouring its position on a 24-hour channel on DSTV; Walking on Water and On Digital Media, neither of which have launched a commercial service yet.
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