After making billions from Africans for a meagre service, fibre broadband starts to roll out to South Africa’s townships and people are ready to switch off their satellite TV services – opting for online platforms like Netflix. Now DStv wants the government to regulate and protect them.
MyBroadband.co.za reports that MultiChoice South Africa CEO Calvo Mawela claims there is no doubt that the future of pay TV is online, which is why they are arguing that satellite and Internet-based pay TV services must fall under the same regulations in South Africa.
ICASA will hold public hearings on an inquiry into subscription television broadcasting services this week, and MultiChoice is pre-empting this by briefing the media on its position.
Meanwhile the Congress of the South African Trade Unions (Cosatu) has warned Naspers chairman Koos Bekker over alleged “immoral conduct” in the broadcasting space.
Independent Online quotes a letter issued by Tony Ehrenreich, Cosatu’s Western Cape provincial secretary, saying “we are entering a new phase in South Africa inspired by our President Ramaphosa. We are going to root out all unethical leaders who use their positions to deprive our people of their just national interest”.
Cosatu points out that Naspers had secured the rights of the national rugby team broadcast and denied the public reasonable access to it. The letter also says Bekker acted “unethically” in the following instances:
- You have raised the number of re runs on DSTV without consultation with viewers;
- You have acted as the censuring agent of South Africans deciding what news we can and cannot watch;
- You intend raising the DSTV subscription, when the service is deteriorating;
- You advantage Afrikaans and Stellenbosch culture ahead of other cultures in South Africa in broadcasting; and
- You have withdrawn the rights of workers at Paarl media to discounted DSTV rates unilaterally and unfairly”.
Earlier the former communications minister, Yunus Carrim, claimed Bekker tried convincing government that its policy on digital migration was flawed. Becker has either not bothered to answer to allegations or denied all of it.
In 2017, ICASA released a discussion document on the pay TV inquiry where it laid out several options to address the issue of MultiChoice’s market dominance in South Africa.
These included forcing exclusive sports rights contracts to be shortened, unbundling and splitting the sports rights, and forcing MultiChoice to license its rights to other broadcasters.
Should these regulations be passed, Mawela says it would hand the South African pay TV market to global online streaming giants like Netflix and Amazon.
“We’re just killing pay TV and allowing online a free ride,” says Mawela.
In the past the saving grace for DStv in South Africa has been the lacklustre penetration of broadband services. However, argues MyBroadband, with the launch of Netflix locally in 2016 and the proliferation of fibre infrastructure, DStv’s market share has changed.
DStv has a bit of a tainted history. Earlier this year we reported that according to Phumzile Van Damme, the DA Shadow Minister of Communications, she’s demanded that the Independent Communications Authority of South Africa (ICASA) investigation Naspers’ subsidiary Multichoice’s payments to ANN7 (owned by the Gupta family) and the SABC, allegedly in exchange for influence of government policy on pay-TV services.
Van Damme said it is ICASA’s duty to take this matter up in the public interest, and in particular, on behalf of those South Africans who part with their hard-earned money every month for DStv subscription fees. She said they deserve to know whether their money was used by Multichoice to grease the palms of the Gupta family.
Last year, the DA revealed SABC board minutes dated 6 June 2013, which suggests that Multichoice sought to pay the SABC R100 million for its 24-hour news channel in exchange for the SABC’s political influence over digital migration. This also supports allegations in the media, that Multichoice had paid Gupta-owned ANN7 millions in exchange for similar influence over government’s position on set-top boxes.
The meeting was attended by the then interim SABC Board, SABC executives and then Multichoice CEO, Imtiaz Patel. At the meeting, Patel stated that “[w]e would not normally pay for a news channel” but that he would be able to convince the Multichoice board members on the condition the SABC exert their influence over former Communications Minister, Faith Muthambi.
Van Damme says it was for this reason the DA wrote to ICASA in terms of Section 4B (1) of the ICASA Act, to request for an inquiry into these allegations, and furthermore requested that Multichoice contracts with the SABC and ANN7 be made public.
“Although ICASA publicly acknowledged receiving our request, we are yet to receive any correspondence. Even with the magnitude of these allegations, ICASA has failed to act promptly and take serious action against Multichoice for these allegations of unethical conduct.
“The DA has always been a proponent of companies conducting their business in a free market system, however, they have a responsibility to at all times adhere to the rules, laws and ethics that oversee business practices.
“As the foremost communications regulator in South Africa, ICASA has the responsibility to probe these allegations without further delay,” says Van Damme.
Now Mawela says over 100,000 Premium DStv subscribers left them in the last financial year. “This was largely as a result of the popularity of Netflix.”
He said most of their growth is happening at the lower-end of the market through DStv Access packages, where the profit margins are lower than on DStv Premium and DStv Compact.
Now with Vumatel rolling out 100Mbps fibre services to townships at R89 per month, DStv’s lower-tier services will come under pressure.
Vumatel’s plan to connect South Africa’s townships with fibre starts in Alexandra. If the pilot in Alexandra is successful, Vumatel will replicate the model in Diepsloot.
Within the next two years, Vumatel aims to connect 2.5 million homes and 10 million township residents to fibre broadband.
Mawela said Vumatel rolling out fibre to Alexandra will kill DStv’s satellite TV market share. “The future is online,” he said.