Another pay-TV licence submission implodes
But it proved rather striking to witness these mistakes being made by an established multimedia production company, applying for one of the highly lucrative pay-TV licences to be granted by the Independent Communications Authority of South Africa (Icasa) on Thursday, the fourth of 12 days of public hearings in Sandton.
Black Earth Communications (BEC) became the second applicant — after the Ndabenhle Group on Wednesday — whose submission imploded after a sharp retort by E-Sat’s legal counsel Dan Rosengarten exposed fundamental flaws in its proposal.
The main concerns raised by Rosengarten were the lack of secured financial muscle to fund the venture, too much outsourcing of a substantial part of BEC’s services, and BEC not having done essential audience research.
BEC, which has been trading for the past 10 years, presented its proposal to the commissioners of Icasa and fellow candidates E-Sat, Sentech, the Ndabenhle Group and Digital Media, stating it wants to launch an eight- to 10-channel TV bouquet as well as a 10- to 20-channel radio bouquet over the next five years, which will cost less than R100 per month.
In addition, it wants to offer a mix of “black entertainment”, information and sports, and plans to broadcast a dedicated Aids channel.
However, E-Sat — backed by the other candidates and the Icasa commissioners — was not convinced BEC would be able to pull it off. Its main concern was whether BEC could live up to its financial obligations, and the issue of funding kept surfacing during the hearing.
BEC stated in its submission and during the hearing that Absa is “showing interest” to provide it with a large part of the R440-million needed to cover its start-up costs.
In reply, Rosengarten said that the “actual secured financial funds or sufficient backing of shareholders is absolutely essential when pursuing such an undertaking”. He added that “as far as E-Sat is concerned these conditions are currently non-existent”.
The Icasa commissioners, under leadership of chairperson Zolisa Masiza, were left unsatisfied by most of BEC’s answers to their questions. When Masiza asked BEC founders Kubeshni Govender Jones and Andrew Jones to name their core business, they were unable to provide a satisfactory answer.
It was clear that the fight for the pay-TV licences would really take off on Friday, when the big players, Max TV and Telkom Media, present their submissions.
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