MultiChoice has not monopolised the pay-TV market, inquiry hears

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Canal+ has not wasted any time to increase its stake in Multichoice.
Photo: Gallo Images
Canal+ has not wasted any time to increase its stake in Multichoice. Photo: Gallo Images
  • The Independent Communications Authority of South Africa held public hearings and allowed various stakeholders to present submissions for an inquiry into competition in the pay-TV sector. 
  • MultiChoice was the last to present submissions, which were much-anticipated after SABC and eTV made theirs earlier this week. 
  • MultiChoice says the landscape of pay-TV has changed and it has created no barriers to entry in the market.  

MultiChoice believes it has not created barriers to entry in the pay-TV market, an inquiry has heard.

Defending itself against allegations of having a monopoly in the market, MultiChoice appeared at the Independent Communications Authority of South Africa (Icasa) inquiry into pay-TV competition on Friday. Broadcasters SABC and eTV made submissions earlier in the week.

Icasa held public hearings from 12 to 15 January in respect of its draft-finding document published in 2019 on subscription television broadcasting services. 

The five-hour presentation allowed pay-TV operator MultiChoice to qualify its position in terms of competition issues and allegations of barriers to entry it has established in the market.

Icasa said it was determined to stimulate competitiveness in a market MultiChoice had dominated for more than two decades.

The JSE-listed pay-TV operator focused its submission on Icasa's market definition and competition analysis, saying it excluded critical forces of current and future competition.

"On our reading of Section 67 of the Electronic Communications Act, the core economic principles for the market definition have not been applied.

"The instructions that the analysis must be forward looking instead of backward looking, and that analysis should look at the dynamic rather than static position is not followed. The draft findings look backward and are static," said Stephan Malherbe, an economist at Genesis Analytics, who represented MultiChoice at the hearing.

Malherbe added Icasa's market definition left out critical sources of competitive constraints and this rendered the market definition inoperable and misleading as a framework for regulatory decision-making.

He said another point in MultiChoice's submission was the lack of objective criteria, for example on premium content, which had resulted in "circular reasoning and serious contradictions", by Icasa.

According to MultiChoice, rapid technological development and changing content consumption patterns have caused significant disruption, lowering entry barriers and switching costs.

"Icasa's proposed delineation of markets into 'premium and non-premium' content is not robust and out of line with market realities. The importance of content that has traditionally been referred to as 'premium' has declined due to the proliferation of high quality and varied international and local drama and reality series and new popular sporting events.

"A match between Chippa and AmaZulu is not premium content anymore but according to the authority it is," said Calvo Mawela, the CEO of MultiChoice.

Icasa said it accepted all submissions made during the week and would revert at a determined time. 

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