MultiChoice bid for TopTV raises competition issues

2013-04-30 11:55
Thinus Ferreira
Cape Town – A new South African consortium, Dynamic TV, backed by MultiChoice funding, is also making a bid for the beleaguered satellite pay-TV operator TopTV, to rival the offer from China's StarTimes.

Dynamic TV, a broad-based consortium led by Given Mkhari of MSG Afrika Media and Malose Kekana of Falk Trading received R500m in financial backing from TopTV's rival, Naspers-owned MultiChoice, in the form of a loan. MultiChoice offers the satellite TV service DStv.

The consortium confirmed on Monday that it submitted an alternative business plan to help save TopTV.

Business analysts said the deal raised potential competition issues, but MultiChoice CEO Imtiaz Patel said it was a "tangible demonstration of MultiChoice's ongoing commitment to enterprise development and empowerment", reports Business Day.

Last-minute decision

"The total amount of investment by South African development funding institutions and investors in ODM is in excess of R1.4bn, of which StarTimes has, in terms of the business rescue proposal, proposed to acquire for a cash consideration of R98.4m," Dynamic TV said.

"This implies that the first R1.4bn in profits must be repaid to StarTimes and repatriated offshore, tax free, before local shareholders can benefit."

Patel added that Multichoice's last-minute decision was not made to block competition from China.

The shareholders of On Digital Media (ODM) – the company currently in business rescue and running the loss-making TopTV pay-TV service as it tries to stave off liquidation – is scheduled to vote on Tuesday on a business rescue plan in which China's StarTimes wants to pump millions into the struggling operation.

On 24 April, TopTv was granted approval by South Africa's broadcasting regulator, the Independent Communications Authority of South Africa (Icasa) to offer customers a separate porn bouquet of three sex channels.

StarTimes vs Dynamic TV

Dynamic TV claims that the StarTimes bid wouldn't result in "any meaningful value to black shareholders".

"Turning around TopTV's fortunes presents the only realistic opportunity for the pay-TV market to have a credible second player. It also represents a rare opportunity for black people to own a commercial broadcasting licence, generally considered to be a scarce resource."

Dynamic TV says that it has "the capacity, expertise, support, know-how and commitment to turn around the business of On Digital Media".

StarTimes already has a big and growing pay-TV footprint across Africa and would love to get a foothold in South Africa – Africa's largest, most important and lucrative pay-TV market.

Patel said that if Dynamic TV wants access to MultiChoice TV content, that the pay-TV platform "would consider any requests on commercial terms".

StarTimes has been brutal in its assessment of TopTV and its failures and proposes a radical overhaul of TopTV.

StarTimes wants to bring in its own CEO, wants to slash TopTV's monthly subscription fee in half and change the bouquet's channels. Dynamic TV wants to "support local manufacturers, distributors and installers and stimulate the independent production of locally developed, home-grown African content."

*Channel24 and Multichoice are owned Naspers.


  • Nevendran Subrayal - 2013-04-30 13:28

    It would be nice to actually have some competition in the market instead of us being screwed by the same provider with two different names. What experience and expertise does Dynamic TV come with? Money only will not fix Top TV’s problems. Startimes has a proven record in the pay-tv market and they have hardware (set-top boxes) to back it up but the most important part of their strategy is that they will reduce the monthly subscriptions by half and revamp the bouquets. That will be a win for the subscribers and it will force DSTV to reduce its pricing structure as well.

  • Grant Logan - 2013-04-30 14:13

    This shouldn't be allowed. But if this deal is struck will subscribers of dstv cancel their subscriptions too? While they're at it why not sell their smart phones and computers too.

  • Kurnel Sol-Tie - 2013-04-30 14:54

    Oh! I see what's going on!! The Gods fracking fascists (No, Multichoice, not the Chinese!!) are trying to get hold of the company before the Chinese cut the prices and improve the product, or they may be forced to cut their fracking prices! The Gods fracking scum!

  • Kwajo Musa - 2013-05-01 00:43

    I would like to advise TOPTV share holders to vote in favour of Chinese Startime. Let multichoice help SABC to statr it's own 24hours news and the 18 addition channels it planned to start, that will show that they welcome competition. Multichoice really want true monopoly to pay TV in South Africa. This must not be allowed. Already we are being charge to have HD, rewind, FF, Recording programs because the have monopoly current. Do you still remember when Vodacom use to charge for a cellphone sim to remain active? What happen to that cost, where did it go? They we having monopoly no cellphone communication and they new that its either YOU ARE WITH THEM OR WITH NOTHING. So multichoice wants to do the same here. The toptv must accept the Chinese offer. This late distraction must be ignore and let it be offer to SABC or the other service provider who is struggling to launch his VOD channels for two years now.

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