M-Net, Multichoice, Orbicom: briefing
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Communications and Digital Technologies
22 September 1999
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Meeting report
COMMUNICATIONS PORTFOLIO COMMITTEE Documents handed out
22 September 1999
M-NET; MULTICHOICE; ORBICOM: BRIEFING
Information file on Multichoice
M-NET Annual Report 1999
Websites:
http://www.mnet.co.za
http://www.multichoice.co.za
http://www.orbicom.com
MINUTES:
M-Net presentation
A slide presentation was given by Mr K Mtengenya (Director of Regulatory Affairs). The following points were made:
M-NET shareholding structure: %
Naspers LTD 28,56
Omni Media (Jonnic subsidiary) 24,72
Public 15.82
Phuthama Share Scheme 14.92
Multi Choice Africa Pty LTD 9.93
M-NET employee Share Scheme 4.80
Natal Witness 1.25
M- Net at a glance:
Over 52000 shareholders
1.2 million subscribers
44 African countries
Terrestrial operations in Africa
A second slide presentation by Ms R Asmal (General Manager of Corporate Communications) outlined the various M-Net channals; its movie supply chain; its various corporate social projects; as well as its policy framework, which outlined its technological development and convergence, as well as globalisation which creates a need for South African companies to compete, and to attract foreign investment.
M-Net has a licence to offer M-Net channel and community service network until 31 March 2000.
Questions by committee members.
Mr Maserumule (ANC) asked what is the use of having an open time slot for only 30 minutes. Is this used for advertising?
Mr K Mtengenya informed the committee that the open time window is two hours long, and does not bring in real revenue. Open time window is an international phenomenon, which gives MNet an opportunity to showcase its services.
Mr C Morkel (NNP) asked if M-Net is involved with any hospitality industries.
Mr K Mtengenya said that M-Net has links with hotel chains. M-Net give the hotels exposure, and they in turn allow M-Net to use their facilities.
Ms Newhoudt-Druchen said that she would like to see them reintroducing sub-titled movies.
Mr K Mtengenya: With regard to subtitling programmes, M-Net looks at business opportunities, and does not allow such opportunities to pass by. Most programmes are subjected to strict conditions and terms, but M-Net is presently conducting research on how they can accommodate the deaf.
Dr Mulder (FF) asked what percentages of their programmes are in Afrikaans.
Mr K Mtengenya In terms of our licence agreement, the English and Afrikaans languages used for broadcasting. Kyk-net is an exclusively Afrikaans channel, which will be introduced on DSTV soon.
Mr Mongwaketse (ANC) asked why M-Net does not cover all areas.
Why is open time window not extended, when covering great sporting events, to accommodate the poor communities that cannot afford to subscribe?
Mr K Mtengenya M-Net has a national license to cover the whole country. Unfortunately there are some areas with no signal, due to their poor geographical terrain.
The open-time window is regulated in terms of its licence agreement with IBA.
Mr Kekana asked what is their social responsibility with regard to the impact of screening lots of foreign movies. Is research being conducted as to how this affects the viewers?
Mr K Mtengenya said that they have participated in the position paper with the IBA, where they provided alternatives such as parental guidance. M-Net commissions research on a regular basis, and makes this information available to the IBA.
The chairperson acknowledged that M-Net has contributed a lot to the IBA in terms of research.
Multichoice presentation
Slide presentations were given by Mr N Letele, CEO for South Africa, and Ms Clarisa from Pay TV Value Chain. The following points were made:
Introduction
Company started in 1993
Commenced with digital satellite services in 1995
Manages and markets all forms of pay-TV options and other free-to-air television options
Huge capital investment and infrastructure development required.
Background
Provides a wide range a wide range of Pay TV management services including subscriber management services, call centre services, decoder distribution
Services not limited by national boundaries: 1.2m subscribers in Africa & Middle East
DsTV (which Multichoice does not own or compile its channels) offered via digital satellite across Africa
Arms-length agreements with all channel suppliers
Decoders in Africa enabled from South Africa
Pay TV Contribution to the Economy
Revenue inflow from subscriptions and decoder sales
Total contribution to GDP R1.990 Billion
Number of decoder units exported 538 400
Value of decoder units exported R441 m
Taxes paid R289 m
Expenditure in South African economy R1.3 Billion
Technological trends
Convergence
Rapid change - outpacing regulation
High speed modems and phone lines
Changing delivery platforms
Networked homes - smart houses
Interactive TV services
The slide presentation outlined their: Operations in Africa; Continental Service; Pay TV value chain; Subscriber management services; Functions; Services and Operational trends.
Questions by committee members
Dr Mulder (FF) asked how many more channels could Multichoice accommodate?
Mr Mongwaketse (ANC) asked who owns Multichoice?
Mr Makunyane (ANC): What is your position with regard to the African Renaissance?
Mr Kekana: Are you fully Y2K compliant?
Mr N Letele said that the capacity of the satellite is full, but they can remove channels that are not performing, and add new channels.
Shareholdings are through the MIH group. Multichoice is a private company, and the public owns 20% of the shares.
With regard to African Renaissance, Multichoice wants to represent itself as African. It is aiming at putting more continental channels on the net.
Multichoice is presently in the process of becoming Y2K compliant, and should be fully Y2K compliant by the end of October 1999. This is an important concern to the whole continent.
Orbicom presentation
Slide presentations were provided by Mr A Karrim (Managing Director), Ms I Charnley (Executive Director- Jonnic) and Mr T Rantho (Regulatory Affairs Manager). Other members present: Ms P Marz (Executive), and Ms S Milin (Executive). The following points were made:
Introduction to Orbicom
A signal distribution company specialising in the management of digital compression systems, as well as satelite and micro-wave multi-point distribution technologies
Formed in December 1993
Indigenous South African company
Serving clients in MIH group and external
Licensed signal distributor (IBA Act)
Orbicom is the biggest satellite service provider in Africa, whose activities includes: Spectrum Planning and Management; Systems planning; Uplinking; and Back-hauling. Currently Orbicom operates the largest Digital Satellite Platform in Africa. Their Terrestrial Network is licensed by IBA, and their Satellite Uplinking is licensed by SATRA. Orbicom's vision is to become a leading international provider of secure multimedia services.
Skills in Broadcasting Telecommunication and IT
Orbicom remains at the leading edge in:
Digital Technology
Compression Technology
Network engineering for Data Comms and Engineering
Service standards
Regulatory Issues
Increasing convergence of telecoms, computer and media industries
Digitisation
Exclusivity - Telecommunications
Signal Distribution
Technology neutrality unleashes innovation
Questions by committee members
Mr Kekana: Is the South African market and business barriers (regulations) making it difficult for you to do business in your own country. Are you having a problem with the idea of exclusivity, and do you want these barriers to be removed to make it easier for you?
What guarantees are there against the entry of foreign networks?
What is your relationship with Telkom?
Mr C Morkel (NNP) Are the recipients of your bursaries subjected to conditions of remaining in the country after they complete their studies?
Mr A Karrim informed the committee that there are no business barriers in the market, but there are regulatory barriers in terms of the Act.
Ms I Charnley: To preserve the national assets in our country, we believe it is important to open up an environment to other competitors. This will ensure delivery to the poor. If Telkom's load is too heavy, other competitors should be allowed to share this load. Because we are asking Telkom to open up to competitors, we should therefore welcome the third cellular network. Competition is healthy, as long as it is fair. We believe the market place is big enough for players other than Telkom.
We cannot force the students to remain in this country on completion of their studies. We however encourage them to remain here by offering them employment.
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