Warning for DStv competitor in South Africa

The Independent Communications Authority of South Africa (Icasa) has warned that it will shut down pay-TV broadcaster StarSat’s services if it doesn’t comply with its instruction to stop operating in the country, TV with Thinus reports.

This comes after the regulator issued a statement on Friday, 20 September 2024, notifying the public that it had instructed StarSat owner On Digital Media (ODM) to shut down its operation in South Africa.

Its closure could result in more than half a million subscribers losing access to the service and up to 600 employees losing their jobs.

While ODM has said it will continue to operate, doing so would be illegal, and Icasa has told TV with Thinus that it will shut down the pay-TV operation if ODM refuses to do so.

Despite this, StarSat support centre agents continued telling customers that nothing was wrong until at least Saturday, 21 September, leaving many questioning whether they should cancel their debit orders for the end of the month.

ODM was meant to shut down on 18 September 2024 after failing to renew its 15-year broadcasting licence with Icasa, which expired on 8 July 2023. According to Icasa, ODM only submitted its renewal application on 10 November 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.”

ODM said the delays resulted from challenges in securing investment in a competitive market, a new shareholders’ agreement, and various economic pressures following the COVID-19 pandemic.

It said it sought guidance from Icasa to address its regulatory challenges but didn’t receive the support it needed.

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

“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.”

The regulator sent ODM multiple unanswered letters requesting information such as:

• The time needed for it to wind up its affairs;
• A plan as to how and when it will inform customers of its shutdown; and,
• Reasoning behind the timeline for it to wind 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,” the regulator said.

However, the broadcaster has been steadfast in its refusal to shut down.

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

At the time, Wu said ODM was liaising with Icasa on the way forward and exploring all regulatory and legal issues surrounding its licencing.

The DStv competitor originally launched as Top TV in May 2010 and quickly ran into financial trouble, entering business rescue within two years of its launch.

StarTimes acquired a 20% stake in On Digital Media during the business rescue process — the maximum the Electronic Communications Act allows a foreign company to own of a local broadcaster.

The service was then rebranded to StarSat in October 2013. This was around the same time its business rescue practitioners (BRPs) said they were close to implementing their business rescue plan.

The BRPs said creditors and shareholders voted on and approved the plan in late April 2013. It exited business rescue in August 2016.