Altech is all smiles with new TV players
Altech Technologies expects to tighten its grip on South Africa’s decoder manufacturing market following the entry of four new players into the pay-television market earlier this month.
Telkom Media, E-Sat, On Digital Media and Walking on Water have all won approval from the Independent Communications Authority of SA to provide free-to-air TV services, breaking the long-held Multichoice monopoly.
Along with Multichoice’s dominance, Altech has also been the sole manufacturer of the pay-TV channel’s decoders through its multimedia and electronics unit, Altech UEC Multi-media.
Multichoice has about 1.3 million DStv subscribers.
The advanced set-top box products and associated software Altech develops, manufactures and deploys include the Personal Video Recorder (PVR) and decoder in one.
The entrance of new operators is expected to increase competition in the pay-TV market, leading to lower prices and providing more functionality for consumers.
Altech CEO Craig Venter said his company made and developed the software used by all DStv decoders and possible new competitors would struggle to choke its competitive edge. “The PVR software is not specific to Multichoice. We make the PVR decoder used in 48 other countries in the world and supply to operators such as Sky Brazil, Showtime in Dubai and Sky Mexico.
“We own the intellectual property of that decoder, so we can sell to the four new licence holders. We expect their entrance to be good for our business.
“It has taken us 10 years to become a global player in decoder software development and manufacturing and today we have about 5% of the world’s decoder market,” said Venter.
He said decoder manufacture and software development would not be an easy market to break into because Altech already had the infrastructure and software engineers to develop all decoders from low-cost to dual view and PVR.
His company has 280 software engineers at Altech UEC Multi- media based in Durban as well as others at additional production facilities sub-contracted in Thailand and India.
According to Venter, Altech, which reported a 20% rise in revenue to R3.99-billion and a 6% rise in operating profit to R306- million for the six months to August, would benefit from the liberalisation of the broadcasting and telecoms market by being in a powerful position to offer bundled packages to customers at a fixed monthly charge.
“In other words, we could offer fixed telephone through Neotel or Telkom; data, Netstar car track and mobile packages through Autopage Cellular.
“We could also use our position as reputable decoder makers to include a decoder and subscription to a pay-TV operator in view of the new operators in this market for a fixed amount a month,” Venter said.
He indicated that Altech would seek to grow its principal company, Autopage Cellular, by finding ways to ride the wave of network convergence and offering innovative value-added services to maintain its market share now that the local market was opening up to competition.
In this regard, Autopage would consider acquisitions, joint ventures, deploying its own infrastructure or remaining just as a Value Added Network, as long as this proved beneficial.
While telecoms commentators believe that cellphone penetration is reaching saturation levels, Venter said increased innovation was reinvigorating the sector.
This, he said, had resulted in the growth of contract subscribers across the networks.
The number of contract subscribers in the South African market stands at 6.9million, with Autopage serving 687000, a figure which Venter attributes to the multiple purpose use of the cellphone.
In total, Autopage has 850000 subscribers.
Cellphones are no longer merely devices for voice communication, but have become a comprehensive tool with a camera, data communication, e-mail and Internet browsing, among the feature attractions.
Venter said Autopage was also doing a significant amount of data, broadband Internet and High-Speed Downlink Packet Access for its subscribers.
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