Gateway to rival Naspers with pan-African pay-TV

JOHANNESBURG – London-based Gateway Communications Plc plans to launch a low-cost African pay-TV satellite service to spur demand on the poorest continent and rival Naspers’s MultiChoice.

The company said on Thursday it would start launching GTV across sub-Saharan Africa – although probably not in the more developed market of South Africa – in mid 2007, targeting customers who could not afford MultiChoice. “The African market has been artificially constrained by monopoly pricing and non-relevant content,” Julian McIntyre, Gateway president and GTV founder, said in an interview.”We will be offering 15 really good channels with an entry price of US$20.”Gateway, which provides satellite and telecom services in Africa, will launch GTV in Kenya, Tanzania and Uganda in East Africa and Zambia, Zimbabwe and Malawi in the south, vowing to offer local content made for Africans with a focus on sport.Naspers’s DStv network, run by MultiChoice, has a monopoly on pay-TV in English-speaking Africa, broadcasting more than 50 channels, including CNN news, SuperSport and Africa’s new version of youth music channel MTV, to 1,34 million subscribers in some 50 countries.DStv, which charges around US$30 for an entry-level subscription, has about 420 000 customers in Africa outside its home market.France’s Canal Plus offers a French language service in Francophone Africa.A serious competitor in the pay-TV space could spell trouble for Naspers, which relies on MultiChoice for more than 70 per cent of its operating profit, although most of that comes from South Africa and Gateway will initially focus on the rest of the continent.Gateway said GTV would carry international channels as well as an in-house entertainment and movie channel and two sports channels.Most of the content would be English, but the company also hopes to win soccer-mad subscribers in French and Portuguese speaking Africa thanks to its focus on live sport.The firm is banking on major growth in demand for pay-TV services in Africa, forecasting the market will be worth US$3 billion by 2015 as the basic TV market grows 10 per cent a year.Only one per cent of TV-owning households sub-Saharan Africa subscribe to pay-TV services, compared to 15 per cent in Eastern Europe, 36 per cent in Western Europe and 93 per cent in North America, it said.It hopes to offer pay-TV on mobile phones on a continent where the cellular industry is booming, although it would probably take five years before technology is up to scratch.Privately owned Gateway issued US$100 million of high-yield bonds in November to refinance debt and raise funds to expand.Nampa-Reuters”The African market has been artificially constrained by monopoly pricing and non-relevant content,” Julian McIntyre, Gateway president and GTV founder, said in an interview.”We will be offering 15 really good channels with an entry price of US$20.”Gateway, which provides satellite and telecom services in Africa, will launch GTV in Kenya, Tanzania and Uganda in East Africa and Zambia, Zimbabwe and Malawi in the south, vowing to offer local content made for Africans with a focus on sport.Naspers’s DStv network, run by MultiChoice, has a monopoly on pay-TV in English-speaking Africa, broadcasting more than 50 channels, including CNN news, SuperSport and Africa’s new version of youth music channel MTV, to 1,34 million subscribers in some 50 countries.DStv, which charges around US$30 for an entry-level subscription, has about 420 000 customers in Africa outside its home market.France’s Canal Plus offers a French language service in Francophone Africa.A serious competitor in the pay-TV space could spell trouble for Naspers, which relies on MultiChoice for more than 70 per cent of its operating profit, although most of that comes from South Africa and Gateway will initially focus on the rest of the continent.Gateway said GTV would carry international channels as well as an in-house entertainment and movie channel and two sports channels.Most of the content would be English, but the company also hopes to win soccer-mad subscribers in French and Portuguese speaking Africa thanks to its focus on live sport.The firm is banking on major growth in demand for pay-TV services in Africa, forecasting the market will be worth US$3 billion by 2015 as the basic TV market grows 10 per cent a year.Only one per cent of TV-owning households sub-Saharan Africa subscribe to pay-TV services, compared to 15 per cent in Eastern Europe, 36 per cent in Western Europe and 93 per cent in North America, it said.It hopes to offer pay-TV on mobile phones on a continent where the cellular industry is booming, although it would probably take five years before technology is up to scratch.Privately owned Gateway issued US$100 million of high-yield bonds in November to refinance debt and raise funds to expand.Nampa-Reuters