South African consumers are already benefiting since the September announcement that the Independent Communications Authority (ICASA) had granted four new pay TV-broadcasting licences with incumbent MultiChoice already introducing a lower priced pay TV package.  

This is according to Professor Richard Collins of the Open University in the UK, who believes the success of the new entrants would depend in part on whether exclusivity rights were maintained through sub-licensing and selling of packages.
Another crucial factor was whether interoperability would be mandated. Collins said that mandating STBs (Set Top Boxes) would be in the consumers’ interests as this eliminated the need for customers to have multiple decoders in order to subscribe to the other pay TV providers. However, it was an open question as to whether new entrants wanted interoperability.  He said mandating the “same box’ might inhibit innovation and competition.
“The question is also whether the new operators are in the same market as MultiChoice (which presently has sole rights to decoders).  And, Telkom Media is also partly using a different platform with IPTV (Internet Protocol Television)," he says.
On the competitive landscape, Collins said MultiChoice was a strong incumbent but the new players all had possible competitive advantages. For Telkom Media, for example, it was its economies of scope and that through using IPTV, it would be able to piggy-back off Telkom’s upgraded broadband structure.
Rikus Matthyser, chief strategy and operations officer for Telkom Media, says his company aims to offer various services including IPTV, which Matthyser said “was the ultimate entertainment experience” offering interactivity with its web interface, combined with high quality television.
With content a critical factor to success, Matthyser also highlighted the need for access to broadcasting rights and exclusivity.  “To make people use your service you need exclusivity with sports and movies, but that is where competition issues come in.”
He says Telkom Media is also addressing local content.  While pointing out that creating one hour of local drama cost 13 times more than what it would cost to buy an hour’s episode of a programme such as “Friends”, Telkom Media was working with local producers to see if “they could meet halfway” In order to ensure cost-effectiveness.
“If you don’t produce something you don’t own it.  In France, they decided the only way they could grow content was to create it themselves and in Korea they introduced incentives to create local content.  There are certain lessons to be learnt from other countries.  Bollywood is growing as is Nollywood (Nigeria).  Maybe the day will come when we will have a ‘Sollywood’ in South Africa,” he adds.
Matthyser says that, for new entrants to succeed, they would need a deregulated market, and smart partnering and bundling to more effectively address customer requirements.  
Addressing the granting of new licences to Telkom Media, On Digital Media, E-SAT, Walking on Water Television, and extending MultiChoice’s licence, ICASA councillor Zolisa Masiza says that many of the other applicants (18 in all with three withdrawing during the process) had failed to do research on their market and had made certain assumptions based on existing MultiChoice research. They had also not addressed skills requirements.
On the timeline forward for the new licensees, Masiza says ICASA is trying to move ahead as fast as it can. “We want to get there by consensus and agree to the best way forward, but when it comes to content, that will be an ongoing process."
In conclusion, Professor Collins predicts: “In a more mature local market, after shake-out, it will become more segmented and pay TV market will also attract advertising and content to the detriment of the free-to-air market.”