Since 1986 MultiChoice has been South Africa’s only pay-TV operator with an estimated 1.3 million local subscribers (plus another 600,000 elsewhere in Africa). Their programming was not aimed at the middle or lower demographic groups which meant that most ordinary South Africans were effectively excluded from receiving MultiChoice broadcasts.The current population of the country is 47.9 million and there are 8 million TV households.

Enter the Independent Communication Authority of South Africa (ICASA) which is determined to make digital pay-TV available to more people.

“ICASA could totally change the South African pay-TV market,” says Roslyn Coldrey, NDS Market Development Manager, EMEA. “They want to make certain that pay-TV will be available to a much wider segment of the population,” she says.

ICASA began the applications process for pay-TV licenses in December 2006. “There were initially 18 independent applicants vying for a license to allow them to compete with MultiChoice,” Coldrey says. The process, which took place in mid-2007, involved three weeks of hearings to determine which prospective broadcasters were most suitable for the market.

“NDS representatives attended all of these hearings to get a feel for the plans and the real business potential of the various license applicants. We also wanted to understand who the successful applicants were likely to be,” Coldrey says.

The winners

ICASA was very particular that applicants should offer a varied range of programming and ensure that local companies and local investment are involved. Making certain that the country itself benefits from the new pay-TV market is a primary concern.

When the process ended in September 2007, four licenses were granted. In addition to the incumbent MultiChoice, the winners are:

• Telkom Media, part of South Africa’s national PTT and third largest mobile operator which plans to offer both satellite and IPTV to an estimated 1.8 million subscribers by 2013.
• On Digital Media (ODM) which plans to offer 40-50 channels.
• Walking on Water (WOW TV) which plans to offer religious broadcasting.
• e.Sat, the satellite division of e.TV, South Africa's first private free-to-air broadcaster.

The drama continues

Within a few months of the licenses being granted, platform launches were being planned for mid-2008. However, there have been some unexpected developments.

First, e.Sat announced that it concluded a deal with MultiChoice to supply its 24-hour news channel to the incumbent pay-TV platform – effectively ruling itself out of launching a DTH platform.

Then at the end of 2007, Free2View, a new hopeful TV operator based in France sprang on the scene and announced the establishment of its free-to-air satellite platform. It will begin with one station: MSNBC, the US news giant. Subsequent plans call for adding more than 30 other channels.

As the name implies, the only cost for Free2View is the satellite dish and decoder. But this represents an outlay which may still be prohibitive for much of the population.

Subsequently, ICASA announced that Free2View has no license to broadcast and therefore cannot operate in South Africa. Stay tuned to see how this sub-plot pans out.

All of this drama is taking place at the same time that the government has mandated the migration to digital terrestrial TV. “They plan to begin the digital rollout in November,” Coldrey says.

For three years – until the analog signal is switched off in November 2011 – there will be dual illumination.

“This is a big step for any country because of the requirement to provide digital receivers to the bulk of the population. This is particularly true in South Africa where many of the set-top boxes will have to be subsidized,” she says. Officials in the South African Department of Communications are optimistic that local firms will be capable of supplying STBs not only for the local market but also for the entire continent.

NDS in Africa

“Although South Africa is clearly the continent’s largest pay-TV market, governments in other countries such as Nigeria and Kenya are also interested in starting their own digital pay-TV services,” Coldrey says.

NDS currently has two customers in Africa. Gateway TV which is broadcasting to Kenya uses NDS VideoGuard® conditional access. Multi TV Afrique has deployed NDS MediaHighway® middleware solutions.

“We anticipate South Africa becoming an important pay-TV market,” Coldrey says. “While NDS has started to work with platform operators in sub-Saharan Africa, the liberalization of the South African market is just beginning. NDS is well placed to play a role in this exciting growth market,” she says.