MultiChoice threatened companies with DStv exclusion to get their way – Former Minister

Naspers and MultiChoice threatened many companies that they would be dropped from DStv if they supported set-top box encryption.

This is according to former communications minister Yunus Carrim, who was testifying at the Zondo Commission of Inquiry into Allegations of State Capture.

Carrim explained that MultiChoice’s opposition to signal encryption was simple – it would make it easier for companies like Etv to enter the pay-TV market.

According to Carrim, a R553-million deal between MultiChoice and the SABC was all about ensuring that there was no signal encryption in South Africa’s digital TV specification.

He said MultiChoice inserted a controversial clause into its SABC agreement which ensured the public broadcaster followed the pay-TV giant’s stance on encryption.

He added that MultiChoice made it clear that excluding this clause would be a deal-breaker. What followed was that the SABC changed its official stance from supporting encryption to opposing it.

Carrim said this MultiChoice-SABC deal was irregular and amounted to regulatory and policy capture.

Other companies threatened

Carrim said Naspers and MultiChoice also threatened many other companies to try to influence the decision on encryption.

According to the former Minister, MultiChoice warned various TV stations that if they support encryption, they would be dropped from the DStv platform.

Many of these stations rely heavily on DStv for their survival, which meant their livelihood was threatened if they opposed MultiChoice’s position on encryption.

One of the stations which were threatened was Etv. “Naspers/MultiChoice threatened to punish Etv if they argued in favour of SDB Control,” Carrim said.

He included communication from Etv in his testimony which said:

We have been advised by DSTV that if we should express support for the BDM Policy and Set-Up Box control during the course of the facilitation process, they will cancel the contract with Etv to host the ENCA News Channel on the DSTV platform. In addition, we have been handed a script which we were called upon to articulate.

Carrim said some of these stations reached out to him for funding to support encryption, but he declined.

The former minister explained that this would amount to the same underhanded tactics MultiChoice would use to gain support.

MultiChoice and Naspers held back spectrum allocation

Carrim also blamed MultiChoice and Naspers for holding back digital migration and freeing up valuable spectrum in South Africa.

He said lobbying by MultiChoice was very primitive and caused a huge setback to the digital migration process.

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.

All mobile telecoms CEOs agree that a lack of additional spectrum is the most significant obstacle to reducing data prices in South Africa.

No comment from MultiChoice

MyBroadband asked MultiChoice for comment related to it threatening companies with dropping them from the DStv platform, but the company did not respond by the time of publication.

MultiChoice also did not answer specific questions about trying to influence the encryption debate through contracts with the SABC, ANN7, or other stations.

The company previously said Carrim’s allegations concerning MultiChoice and some of its officials are baseless and denied them.

“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,” said Joe Heshu, MultiChoice’s group executive for corporate affairs.

Now read: Yunus Carrim drops MultiChoice bombshell

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MultiChoice threatened companies with DStv exclusion to get their way – Former Minister