Four new players will be allowed to compete against MultiChoice in the pay-TV market, government regulator Independent Communications Authority of South Africa (Icasa) announced yesterday.
The new entrants include Telkom and media firm Hosken Consolidated Investments, which has a majority stake in commercial television broadcaster e.tv.
Telkom plans to invest R7billion in its media arm.
Online Digital Media (ODM) and religious channel Walking on Water were also awarded pay-TV licences.
State-owned South African Broadcasting Corporation, which dominates the free-to-air market, initially applied for a pay-TV licence together with fellow parastatal Sentech.
Sentech handed a letter of withdrawal to Icasa on Monday, the day before its annual report was tabled in parliament showing it lacks the funds to enter new markets.
e.tv's e-sat welcomed Icasa's decision. "e.tv and e.sat are poised to enter into the multichannel environment in 2008," said chief executive Bronwyn Keene-Young. "We will be evaluating the future pay-tv market and will announce our plans within the next two months."
Telkom Media chairman Connie Molusi was visibly excited about the announcement and said that the newly formed company would begin working on their programmes as soon as possible.
"I think we should be up and running in about 10 to 16 months," Molusi said. "We will be making an announcement on our programmes in the next few weeks and we will continuously engage in talks with other operators to form partnerships."
ODM general manager Vino Govender said: "We expect a market of about 1,8million households that previously didn't have access to pay television, something that the incumbent has been ignoring up to now. We hope to invest about R1,2billion and go into operation by 2008."
With a sudden leap from one pay channel to six, subscribers may need to buy a different decoder for each service.
Operators said they would work together. "We don't want to have a situation where viewers end up with four set-top boxes," Govendor said.
"It's one of the things we seriously need to sit down and discuss in the coming weeks."
Icasa said that in three weeks' time it would give reasons for its decision to award licences to the four companies. - With Sapa