Cape Town – South African pay TV operator TopTV isn't real competition for South Africa's pay TV market, says the global investment firm Morgan Stanley in a new report.
On Digital Media (ODM) which runs the struggling pay TV platform "is unlikely to make major inroads" in the country's pay TV sector, the report says.
TopTV recently lost its CEO Vino Govender
, who was replaced by a new interim CEO, Eddie Mbalo.
The operator also fought with South Africa's broadcasting regulator, the Independent Communications Authority of South Africa (Icasa), over highly controversial plans to start broadcasting pornographic channels, which caused a major public outcry and calls for a boycott. Not finding value
The platform, which has no real sport channels and has added no significant new TV channels since it launched in May 2010, is in fact losing channels
from its flagship bouquet.
Another channel disappeared on Sunday with continuing promises that replacement channels are being sourced.
TopTV also did an about-turn on earlier plans for a PVR and high definition (HD) channels, saying that it's no longer a top priority.
Just over half of the 360 000 TopTV decoders sold are still being used by active TopTV subscribers, suggesting that subscribers are not finding value in the product and the bouquet offering, despite a free installation. DStv more sucessful
In the report, Morgan Stanley says competitor MultiChoice's DStv product is remaining competitive thanks in part to new value-added services like mobile TV, PVR use which is growing, and growing video-on-demand services such as DStv BoxOffice.
Although TopTV's pay TV offering is geared towards middle and lower income groups, Morgan Stanley said DStv is more successful and focused on "attracting middle and lower end paying subscribers through the DStv Lite and DStv Compact packages".
The investment firm predicts that MultiChoice's revenue growth of 22% last year will be followed by a 17% rise in total revenues this year and 5.6 million DStv subscribers in South Africa by 2015.