Vodacom’s ‘pre-emptive strike’ on pay TV

Vodacom has chosen the perfect time to announce its joint venture with Multichoice for a low-cost pay television service.

Vodacom has chosen the perfect time to announce its joint venture with Multichoice for a low-cost pay television service.

According to analysts, the ongoing Icasa hearings for satellite and cable subscription television serve as an ideal platform to take advantage of a possible Telkom licensing agreement.

Independent analyst Tshepo Tsele said: "This is not a new product. They chose the perfect time to remind people that: ‘by-the-way we have a product out there’."

Vodacom Group chief executive officer Alan Knott-Craig said: "With cellphone penetration in South Africa at over 80 percent, Vodacom is constantly looking for opportunities to expand its growth horizontally in the market."

Renaissance Fund Managers director Khulekani Dlamini agreed that it was no coincidence that Vodacom had chosen this time to announce the launch of the new satellite service.

Dlamini said: "If anything it’s a pre-emptive strike relative to what Telkom is planning in subscription television.

"It’s just confusing that the subsidiary is going into competition with the holding company. You could say that there is no love lost between the two entities, and they might be diverging."

It is widely believed that Telkom and Vodacom are headed for split in the near future.

During the course of proceedings E-Sat’s Dan Rosengarten warned against over-licensing. He also gave a stern warning against the issuing of licences to state-affiliated operators.

However, both Dlamini and Tsele felt that Telkom Media would be the most likely to win the licence.

Dlamini said: "They have the cash to go toe-to-toe with Multi- choice.

"While there is a possibility of a monopoly forming, we must remember that regulations must be set to ensure that weak competitors are weeded out and compelling content is brought to the public at an affordable price."

Tsele said that it would be better to have a completely different entrant into the market, but with South Africa’s development being at the stage it is, a state-owned entity is most likely win the licence.

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Vodacom’s ‘pre-emptive strike’ on pay TV