StarSat’s Struggle: A Battle for Survival in South Africa’s Pay-TV Market

StarSat, a pay-TV service in South Africa, is facing an uncertain future as its operator, On Digital Media, has not had its licence renewed by the Independent Communications Authority of South Africa (Icasa). Despite claims from StarSat that it will continue operations, Icasa has given a deadline for closure, raising questions about the service’s future. StarSat, a notable player in South Africa’s pay-TV landscape, is embroiled in a battle for survival. On Digital Media, the operator of StarSat, recently faced a significant setback when the Independent Communications Authority of South Africa (Icasa) did not renew its broadcasting licence. According to reports by TV with Thinus, Icasa has mandated that StarSat cease operations by 18 September 2024. Despite this, there has been no formal communication to the staff, and StarSat decoders are still being marketed.

StarTimes, a Chinese pay-TV service owning a 20% stake in On Digital Media, has faced regulatory constraints, as South African law caps foreign ownership in media companies at 20%. In a letter addressed to Debbi Wu, CEO of On Digital Media, and Ronald Reddy, general manager for legal, risk, and compliance, Icasa underscored that it lacks the legislative authority to consider a licence transfer or renewal application for an expired licence. Furthermore, Icasa suggested it might issue a public advisory to inform subscribers, content providers, and other stakeholders of the impending shutdown.

Icasa has also requested On Digital Media to draft a detailed plan outlining how and when it will inform its stakeholders about the discontinuation of services. In response, Wu stated that the company is in active discussions with Icasa, seeking to navigate the regulatory and legal complexities surrounding its licensing issue. Wu firmly assured that On Digital Media and StarSat are not on the brink of closing down their operations.

StarSat, which began as Top TV in May 2010 under On Digital Media’s management, has had a tumultuous journey. Financial troubles led to a business rescue process in 2012, during which China’s StarTimes acquired a 20% stake. The rebranding to StarSat occurred in October 2013, following the approval of a business rescue plan by creditors and shareholders in April 2013. StarSat successfully exited business rescue in August 2016. However, despite financial stabilization, the company has struggled to retain customers and maintain its channel offerings.

The current situation places StarSat in a precarious position within the South African market, where it competes against dominant players like DStv. As the deadline approaches, the fate of StarSat remains uncertain, with stakeholders eagerly awaiting further developments and official statements.