The beginning of the end of StarSat

On Digital Media’s StarSat has been instructed by the Independent Communications Authority of South Africa (Icasa) to shut down by 18 September 2024.

The communications authority didn’t renew the pay-TV broadcaster’s licence. However, it remains unclear why or what StarSat must do to secure a licence.

MyBroadband asked Icasa about the reasoning behind its decision not to renew StarSat’s licence, but it hadn’t answered our questions by publication.

Reports that Icasa hadn’t renewed StarSat’s licence surfaced in early June 2024, and despite the instruction from the regulator, the broadcaster says it won’t be shutting down.

“We can assure you and the public that On Digital Media/StarSat will not be closing its operations anytime soon,” said On Digital Media CEO Debbie Wu.

Chinese pay-TV service StarTimes owns 20% of On Digital Media, the maximum ownership allowed for a foreign company in a South African media business.

Icasa sent a letter to Wu and On Digital Media’s general manager for legal, risk, and compliance, Ronald Reddy, saying it may issue a statement informing affected subscribers, content providers, and financial stakeholders.

“The regulator does not have the legislative or regulatory mandate to consider a transfer application and/or renewal application an expired licence,” it said.

It also said On Digital Media must share its plan for notifying subscribers and other impacted stakeholders of its services’ shutting down.

However, Wu says StarSat won’t be closing its operations anytime soon. She said the company is liaising with Icasa on the way forward.

She added that On Digital Media is exploring all the regulatory and legal issues surrounding its licencing.

If StarSat were to shut down, it would remove a competitor from South Africa’s pay-TV market.

A recent MyBroadband analysis revealed it was the second-most affordable of the three major players in the space: DStv, Openview, and StarSat.

StarSat currently offers three packages in South Africa, with prices ranging from R130 to R360 per month. These are as follows:

  • StarSat Special — R130 per month (50+ channels)
  • StarSat Super — R250 per month (80+ channels)
  • StarSat Max — R360 per month (140+ channels)

Customers must also pay a once-off R499 decoder and installation fee.

StarSat, formerly Top TV, launched locally in May 2010 under the ownership of On Digital Media.

Two years after its launch, the pay-TV broadcaster landed in financial trouble and entered business rescue.

Chinese pay-TV broadcaster StarTimes acquired a 20% stake in On Digital Media during the business rescue process.

It already managed several pay-TV networks across Africa at the time.

Top TV was rebranded to StarSat in October 2013, around the time that its business rescue practitioners said they were close to concluding the implementation of their business rescue plan.

They said creditors and shareholders voted on and approved the plan earlier that same year.

The broadcaster was forced to cut jobs in 2015, blaming “difficult economic conditions” for the retrenchments.

Former StarSat CEO Mike Dearham said at the time that the company’s board was investigating potential solutions and that it urgently needed to stabilise its financial position.

The fine it received from the Broadcasting Complaints Commission of South Africa (BCCSA) in May 2015 likely didn’t help its financial position.

The BCCSA instructed On Digital Media to pay the fine for broadcasting adult content channels for almost a month without approval from Icasa.

At the time, On Digital Media was in a legal battle over the controversial channels with several entities, including the Justice Alliance of South Africa (Jasa).

Icasa had approved for it to broadcast some of the content, but the Western Cape High Court had set aside its decision.

Jasa complained to the BCCSA after On Digital Media continued to broadcast the channels.

On Digital Media finally exited business rescue in August 2016, but its struggle to maintain subscriber numbers and retain channels continued.

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The beginning of the end of StarSat