Former Communications Minister Yunus Carrim has blamed MultiChoice for stalling digital migration which would free up valuable broadband spectrum in South Africa.
This formed part of his testimony at the Zondo Commission of Inquiry into Allegations of State Capture.
Carrim said a R553-million deal between MultiChoice and the SABC was irregular and unlawful, and aimed at influencing government policy.
According to the former minister, MultiChoice paid the SABC to ensure that there was no signal encryption in South Africa’s digital TV specification.
Signal encryption would make it easier for companies like Etv to enter the pay-TV market – something which MultiChoice allegedly wanted to prevent.
According to Carrim, MultiChoice inserted a controversial clause into its SABC agreement which ensured the public broadcaster followed the pay-TV giant’s stance on encryption.
Carrim said former MultiChoice CEO Imtiaz Patel made it clear that excluding this clause in the agreement with SABC would be a deal-breaker.
“This for me is a very clear example of regulatory or policy capture whereby irregular means are used to shape government policy,” he said.
“There is absolutely no reason to include in a commercial transaction between the SABC and DStv a clause which deals with government policy on encryption.”
Carrim added that former SABC board member Noluthando Gosa said that there was never an SABC board decision to support STB control.
Stalling digital migration
Carrim blamed MultiChoice for frustrating the digital migration process which is costing the country dearly.
“Lobbying by MultiChoice was very primitive. Very backward. It is not consistent with the social democracy we are,” said Carrim.
“It has caused a huge setback to the digital migration process. It suits them because they can retain their monopoly.”
The delay in digital migration and the subsequent allocation of valuable new spectrum to operators is costing South Africa dearly.
Digital dividend spectrum – the 700-800MHz band that can only be allocated once the digital migration in South Africa is completed – could play a key role in reducing data prices.
Because of its lower frequency (in comparison with 2,100MHz, for example) it is excellent for providing rural and indoor LTE coverage.
Vodacom CEO Shameel Joosub previously said it is the most significant obstacle to reducing data prices in South Africa.
“Lengthy delays in completing the digital migration and allocating 4G spectrum has curbed the pace at which data prices could have fallen,” Joosub said.
MTN SA CEO Godfrey Motsa concurred, saying the spectrum crunch that has beset South Africa for a decade has hindered the health and growth of the industry.
MultiChoice denies the allegations
Joe Heshu, MultiChoice group executive for corporate affairs, told MyBroadband that Carrim’s allegations concerning MultiChoice and some of its officials are baseless.
“MultiChoice and its officials deny these allegations,” Heshu said.
He added that MultiChoice has noted that Carrim confirmed under oath that he cannot attest to having personal knowledge of any fraud or corruption in respect of the SABC/MultiChoice agreement.
“We have informed the Zondo Commission that we will respond to the allegations made against us in due course and reserve all of our rights.”