No sig­nal in sight

GTV’s col­lapse spells doom for Telkom Me­dia

Finweek English Edition - - Communication & Technology - CHIMWEMWE MWANZA

HARDLY A WEEK af­ter the demise of GTV – the Bri­tish-based pay-TV pur­veyor with in­ter­ests in sub-Sa­ha­ran Africa – Mul­ti­Choice has swiftly moved to re­claim the top tier English league soc­cer rights pre­vi­ously held by the now de­funct GTV.

In fact, Mul­ti­Choice – owned by me­dia heavy­weight Naspers (par­ent com­pany of Fin­week) – is said to have tabled a bid to ac­quire the rest of GTV’s as­sets. “We’re looking at what we could po­ten­tially sal­vage from GTV. But I’m not aware of any plans to ac­quire GTV’s other re­main­ing as­sets,” says Caro­line Creasy, Mul­ti­Choice’s head of cor­po­rate com­mu­ni­ca­tions for its Africa busi­nesses.

If suc­cess­ful in its bid for GTV’s as­sets, the move could fur­ther strengthen Mul­ti­Choice’s dom­i­nance of the African pay-TV mar­ket, warned me­dia an­a­lyst Arthur Gold­stuck. “With Telkom we had first-hand ex­pe­ri­ence of how mo­nop­o­lies tend to in­flu­ence pric­ing of prod­ucts and ser­vices. Any mo­nop­oly is bad for con­sumers.”

But while GTV’s demise may have taken the in­dus­try by sur­prise, Gold­stuck says its col­lapse best sig­nals the chal­lenges prospec­tive ser­vice providers – in­clud­ing Telkom Me­dia, On Dig­i­tal Me­dia and Walk­ing on Wa­ter – could face on launch­ing their ser­vices.

“You need deep pock­ets to fi­nance such a ven­ture, con­sid­er­ing the sub­scrip­tion TV mar­ket stretch­ing from SA up to Nige­ria has pretty much been sewn up by the in­cum­bent Mul­ti­Choice,” says Khulekani Dh­lamini, a tele­coms an­a­lyst.

With par­ent com­pany Telkom hav­ing with­drawn its ini­tial R7,5bn com­mit­ment to Telkom Me­dia – one of the new li­censees ini­tially thought to be a for­mi­da­ble threat to Mul­ti­Choice’s mo­nop­oly – Gold­stuck has a dim view of Telkom Me­dia’s prospects. Fol­low­ing the with­drawal of par­ent com­pany Telkom last year, Telkom Me­dia set a dead­line of Jan­uary 2009, by when it would have un­veiled a new con­trol­ling share­holder as well as launch plans. How­ever, that dead­line has passed without a word from man­age­ment.

Black eco­nomic empowerment group Mve­laphanda and a Chi­nese con­sor­tium both ex­pressed ini­tial in­ter­est in ac­quir­ing Telkom’s 66% in­ter­est in Telkom Me­dia but have since re­port­edly dropped the idea.

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