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Increased IPTV competition in South Africa
For more than a decade, MultiChoice, which operates mostly in the upper income market, has been the sole pay-TV player in South Africa. It has grown its subscriber base by 10% over the past year, boosting the total number of viewers to 1.4 million.
The Independent Communications Authority has now awarded licences to four more operators to join MultiChoice. They are Telkom Media; On Digital Media; e.tv's joint offering with Hosken Consolidated Investments, e.sat; and a Christian religious platform called Walking on Water.
The question now arises as to whether the market size in South Africa, as yet undefined, is large enough for everyone to survive without a regulator overseeing their decisions, or whether the Independent Communications Authority will have to impose conditions to assist the new entrants.
While the new entrants have mostly offered cheaper services as their major selling point, MultiChoice has already begun to introduce less expensive products into this market to plug any gaps, leaving the newly established industry very little room to compete other than in the areas of quality, service and affordability.
A hearing process has been arranged for October 2007, when submissions from the licence holders and other broader stakeholders will be heard in order to establish the terms under which each licence would have to operate.
While the new licensees may disagree, they will largely be operating in a vacuum of information with little actual knowledge of the size of the market. The Independent Communications Authority agreed that this was an issue, adding that this had forced the authority to follow its own rules.
Telkom Media has predicted that it expects the current pay-TV market to double by 2012. This, it believes, factors in 800,000 new satellite subscribers as well as 300,000 of its own subscribers on its premium, cable-based IPTV package.
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