MultiChoice | Regulatory Boundaries

Regulation is a fact of the pay-TV industry. However, we view ICASA's market inquiry into subscription pay-TV in South Africa to be one of overreach. The draft report suggests that ICASA is looking to regulate the terms of MultiChoice's commercial contracts without a broad enough definition of the marketplace to include OTT services such as Netflix. Accordingly, while ICASA is looking to regulate the industry, we expect MultiChoice to challenge the findings through South Africa's high court.



ICASA has dubbed MultiChoice as overly dominant in the SA market, mostly due to the failure of other pay-TV operators to gain scale since it granted five licenses in 2007. In our view, the failure of other pay-TV operators is because MultiChoice has a superior offering and a larger subscriber base given MultiChoice's investment of over ZAR23bn in local South African sport and content, and over ZAR21bn in decoder subsidies in Africa since 2008. MultiChoice's success does fulfil part of ICASA's mandate to ensure that as many South Africans have access to quality and affordable broadcasting. MultiChoice provides quality and affordable broadcasting via its different bouquets and local programming line-up. However, the lack of a viable competitor has invited investigation.