“We are absolutely not afraid of competition. We welcome competition.”
The war of words erupted after MultiChoice took out full page advertisements in Sunday newspapers to publish an open letter to the Minister, imploring him to drop the requirement of “STB Control” from South Africa’s digital TV decoder standard.
Patel said that only one of the many new pay TV operators licensed by the Independent Communications Authority of South Africa (Icasa) actually launched commercial services.
TopTV launched in 2010 and Patel said that after its first 18 months of operation they reported doing exceptionally well, indicating that they had gained 400,000 subscribers.
Then they went backwards “because of their own folly”, such as over-subsidisation of their decoders, Patel said.
Since then, TopTV has been taken over by StarTimes which Patel said has “deep pockets” and is a formidable opponent to MultiChoice in the rest of Africa.
In spite of this existing competition in the market, Patel argued that government appears to want to use taxpayer money to effectively subsidise another private company’s entry into the subscription TV market.
While some taxpayers may not mind their money being used to launch a competitor to MultiChoice on South Africa’s DTT platform, Patel said that there are also those who would mind.
Patel said that it is not the Minister’s job to take the taxpayer’s money and enable a private company.
Instead, there is already a possible Competition Commission inquiry on MultiChoice pending and a regulatory inquiry from the Minister into premium content rights. These are the policy mechanisms government should use to further its goals rather than subsidising a private company, Patel said.
While he was careful not to name the private company in question, it is clear that he was referring to E-tv, MultiChoice’s opponent in the STB Control debate.
“What about the other private companies who have aspirations of pay TV who will not be able to access the same money now that the lie of the land favours only one company?” Patel asked
Patel warned that regulators need to be mindful of the competition MultiChoice soon expects to face from international Internet video services offered by companies such as Amazon, Google, and Netflix.