The Independent Communications Authority of South Africa (ICASA) has published its draft findings in respect of the Inquiry into Subscription Television Broadcasting Services. The process started in 2016 when ICASA published a notice of its intention to conduct an inquiry into the state of competition in the subscription broadcasting services sector.
The Draft Findings Document is a culmination of a period of public consultations through the clarifications from stakeholders, responses from the published questionnaire, including written and oral representations received for this process.
ICASA further commissioned an independent consumer survey in order to understand consumer behaviour with respect to television broadcasting and video-on-demand services. ICASA considered the results of this survey in coming up with the draft findings.
The Draft findings identified four retail and two wholesale markets, pertaining to the retail distribution of broadcasting and video on demand services, and wholesale supply and acquisition of premium and non-premium content in South Africa. Furthermore, it reveals that competition is ineffective in three of the above identified markets, which are (a) retail distribution of basic-tier subscription television services and satellite-based free-to-air television services; (b) retail distribution of premium subscription television services; and (c) wholesale acquisition of premium content for distribution in South Africa.
In this regard, MultiChoice was found to possess significant market power in the markets that are characterised by ineffective competition.
Having considered the impact of over-the-top (OTT) services, ICASA found that these services are expanding in terms of the number of new entrants and the scale of operations, particularly international video-on-demand service providers.
However, it was found that the impact of OTTs is muted given the limited access to broadband and/or Internet services, the perceived high cost of data and low Internet speeds.
ICASA further found that there is a difference between premium and non-premium content, with the former being a fluid concept that is dependent on the circumstances prevailing at a particular point in time in a market, and specific to a geographical area given the culture and preferences of the population at a certain point in time. The Draft Findings Document therefore identifies what is considered to be premium content based on the characteristics of the premium content.
“ICASA is satisfied with the manner in which the inquiry has progressed thus far, depending on the outcomes of the Final Findings Document, we may consider developing regulations in terms of section 67(4) of the Electronic Communications Act (ECA) to give effect to these findings,” reported Councillor Botlenyana Mokhele. “A separate public consultation process would be followed in that case.”