DStv competitor ordered to shut its doors in South Africa

The Independent Communications Authority of South Africa (Icasa) has ordered Chinese pay-TV operator StarTimes to shut down its StarSat platform in the country.

Icasa explained that it issued a subscription broadcasting licence to StarSat’s parent company, On Digital Media (ODM), on 9 July 2008.

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

The licence was valid for fifteen years and expired on 8 July 2023.

“ODM failed to submit a licence renewal application within the required timeframe set by the Electronic Communications Act (ECA) and related regulations,” Icasa said.

“The legislation requires a licensee that holds an Individual Broadcasting Service licence to submit its renewal application to the authority no earlier than twelve months and no later than six months prior to the expiry of the licence.”

Icasa said that despite numerous reminders, On Digital Media submitted its licence renewal application after the expiry date, on 10 November 2023.

“The authority does not have the legislative or regulatory mandate to consider a renewal application for a licence that has already expired,” Icasa said.

“Nevertheless, section 15(2)1 of the ECA affords the authority the discretion to allow a licensee whose licence has expired to continue providing services for which it was licensed in order to wind up the licensee’s affairs and to protect its customers.”

Icasa said it warned ODM on 30 October 2023 that it had decided to invoke this provision of the law.

The regulator also said it wrote several unanswered letters to ODM to request the following information:

• The amount of time it would require to wind up its affairs.
• A plan on how and when it will inform subscribers about the winding up of its services.
• Reasons for the proposed timelines of winding up.

“On 18 March 2024, the Authority decided that ODM should wind up its affairs and cease providing broadcasting services by 18 September 2024, and further inform its subscribers,” said Icasa.

“The authority once again urges all licensees to submit their renewal applications on time and in the prescribed manner,” it continued.

“This is a legal requirement, so that South African citizens are not denied access to communication services. Broadcasting services play a vital role in, amongst others, building social cohesion, enabling economic growth, and ensuring the dissemination of information, entertainment and education.”

StarSat vows to stay

Reports that Icasa hadn’t renewed StarSat’s licence surfaced in early June 2024.

Despite the instruction from the regulator, it maintained that it wouldn’t shut 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.

Wu 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 licensing.

Originally launched as Top TV in May 2010, the pay-TV operator has struggled to compete against MultiChoice’s DStv in South Africa.

Within two years of launching, Top TV landed in financial trouble and entered business rescue.

StarTimes acquired its 20% stake in On Digital Media during the business rescue process.

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.

Around the same time, StarSat had made a bid to broadcast adult entertainment channels in South Africa but faced a legal backlash against the move.

When it continued to broadcast the channels despite a Western Cape High Court order, it received a fine from the Broadcasting Complaints Commission of South Africa.

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