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We cannot afford your services anymore, SABC tells Sentech

By raising its concerns publicly, the SABC has set the stage for a showdown with Sentech.
The Sentech television tower, also known as the Brixton tower, stands on the city skyline as night falls in the central business district of Johannesburg. Image: Waldo Swiegers/Bloomberg

The SABC has told the parliamentary portfolio committee on communications that it simply cannot afford to pay Sentech’s “prohibitive” fees for broadcast signal distribution and that these fees must be cut in half, or by R500 million, with immediate effect.

It has also said it would rather ditch digital terrestrial television (DTT) in favour of direct-to-home (DTH) satellite in areas where the cost of terrestrial signal distribution outweighs the benefits. A marked shift away from DTT – which has never officially been commercially launched in South Africa – to DTH satellite also makes sense, the SABC said.

The financially constrained public broadcaster’s chief operating officer, Ian Plaatjes, told the portfolio committee that although the SABC supports government-to-government business – Sentech is a state-owned enterprise – the signal distributor’s pricing cannot be massively out of kilter with private-sector alternatives.

By raising its concerns publicly, the SABC has set the stage for a showdown with Sentech, one that may have to be resolved politically by communications minister Stella Ndabeni-Abrahams. The SABC is by far Sentech’s biggest customer.

Plaatjes said the SABC’s fees to Sentech are its second largest cost after salaries. He said the biggest cost for a public broadcaster should be content, followed by salaries and then only signal distribution.

In the past five years, the SABC has spent more than R3.2 billion with Sentech, with these fees described by Plaatjes as “prohibitive”. If it continues paying these fees as this level, the SABC “will not be sustainable” as a business. Sentech’s costs have continued to escalate annually, despite “technology improvements decreasing the cost of distribution”, he added.

Cost savings

He also decried South Africa’s broadcasting digital migration policies and regulations, saying the policy requirement that 84% of South Africa’s digital broadcasting network be in the form of DTT (rather than DTH satellite) makes no sense. The figure should probably be closer to 60%, he said, which would lead to annual savings of about R187 million. If the SABC moved entirely to DTH, the savings would grow to R387 million, though Plaatjes admitted a 100% DTH network isn’t entirely feasible.

“If we went to a private, third-party supplier outside of Sentech, we’d make a 94% saving, paying only R25 million/year. That’s about R400 million we could utilise for content. We do not have a strategy to use third-party service providers outside of Sentech – just yet. We promote government-to-government business, but the price has to be right. It can’t be 100 times the price our competitors are paying.”

The cost of signal distribution is particularly onerous in the more remote parts of South Africa. In Makhanda (Grahamstown), for example, Plaatjes said the cost of signal distribution is a shocking R335.68/viewer for analogue – that’s more than the SABC’s annual licence fee. On DTT, that figure would fall to R150, or on DTH would be just R1.60, he said. A third-party provider for DTH would be just 80c/viewer. In Johannesburg, analogue distribution is currently R1.30/viewer. DTT would be 70c/viewer, against R1.60 for Sentech DTH and 80c for a third-party DTH service.

Even though DTT would be the cheapest option in Johannesburg, Plaatjes said that “the whole world is moving off DTT” and if the SABC is to survive, “we must certainly do the same”.

He said the SABC needs to work with Sentech and communications regulator Icasa to develop a strategy around DTT and DTH coverage for the country that makes financial and technological sense. In addition, the SABC “must be exempted from the unsustainable and uncompetitive DTT policies and regulations while the policy is being revised”.

Sentech responds

Sentech CEO Mlamli Booi said the company will engage with the SABC around the “issues that are paining them”.

“Those issues can’t be sorted out in the public domain of the media. We want to acknowledge what they have said and we have to take it on ourselves to deal with” the situation. “We have had conversations and continue to have conversations with the SABC to assist them where we can.”

Booi said the SABC is by far South Africa’s largest terrestrial broadcaster and it is Sentech’s “responsibility to support their content distribution, and we are very keen to continue doing that”.

He said Sentech has rolled out DTT infrastructure across South Africa in line with the requirements of the broadcasting digital migration policy. “We are hearing them (the SABC) on their desire to reduce their DTT coverage and they have indicated that today, publicly. Our position is we would want to engage further with them on what does it mean and how do they get there. What are the implications for them and for their mandate, and for us and our mandate? They are our customer so the details I cannot discuss publicly.” 

© 2020 NewsCentral Media

This article was originally published on TechCentral here

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Wha ha haaaa — Your Government to Government business is nothing but a mutual looting exercise !! Closing down both institutions would be “the Right Thing to do !!”

Infact, closing every poorly run government department would be a great idea. Will save alot of pain and frustration.

This reminds me of the shootout in Johannesburg a few years ago between the SAPS and the Metro Police. Only in Africa…

Yes in 2008, I can recall….and no resultant deaths during such shooting, is indicative how WELL ‘our’ SAPS and Metro Cops can shoot.

Absolutely correct and Proudly Brought to You by the cANCer in control.

One lot of useless corrupt ANC looters blaming the other corrupt useless ANC looters all with taxpayers money. Only in Africa.

Soon the ANC led Government will be telling civil servants, teachers, nurses et al pretty much the same thing..
followed by

“we cannot afford to pay social grants to the unemployed masses any longer due to us fleecing the tax payer who’s money we took for ourselves, same who have either emigrated or gone belly up due to our socialist behaviour..Merry Christmas and have a nice life”

A Zimbabwe in the making

the cost of signal distribution is a shocking R335.68/viewer for analogue – that’s more than the SABC’s annual licence fee…..WHAT is the problem? you are going to make it up by charging us for NETFLIX…..you can get nothing right. Everything you and your ANC government touch turns into a UTTER failure!!

.it is in the looters sight to wangle some sort of way to pay for a licence to watch NETFLIX.

This is blatant secondary taxation. Payment of yet more inept ANC cadres and ANC voters. The comment that this should not be aired in public is typical of their Chinese and Russian mentors. Should those charges not be investigated by the Competition Board for non competitive behavior or is the Government organisations exempt. The only way forward for South African consumers is what I term the SANRAL way. To obtain value maybe a total boycott of TV licences.

And what about the guy who gets SABC 1,2,3 and E using the old braai grid aerial. I have a house that does that. There is no way of switching him off if he does not pay his license.

my retired farm staff have been enjoying braai grid reception for the past 20 years without paying. They laugh at the bill for thousands of rand that comes every year.

Indeed. May they enjoy their braai, and braai-grid entertainment.

For many Saffas emigrating, an outstanding SABC account would be ONE of the ‘lucky packet parcels’ being left behind in SA *lol*

SABC has been in trouble for years but seriously went south when Hlaudi Motsoneng was running amok, wonder if his names going to turn up at Zondo commission soon?

That would be some brilliant comedy!

So in the near future, when I press channel 191 / 192 / 193 on the decoder-remote, I’d hope to see BLACK SCREENS?

In the good old days, the tea trolley and tea trolley lady were the first to go.

Can the SABC afford anything at the moment??

why don’t they just sell it? Pretty sure that the govt could make Rbillions by offloading the SABC to a big media company.Just keep the staff on for a set period.And they could do this quickly too.Plenty of buyers out there.

Very true but then who would broadcast their, the ANC’s, propaganda and racial hatred campaign? Well, you make sure that only an ANC cadre can buy it (think ENCA) and there is no competition from the likes of DSTV. The crooked thumb on the scale.

The poop and the fan get closer and closer each day.

The SABC channels have very little content for the thinking person, and even less for the Afrikaans speaking viewer. These latter two categories form the majority of tax payers, and they don’t get value for money. So please SABC, go under. I will not miss thee…..

Why does the SABC still exist?
Does anyone watch any of their channels?
It is just wasting resources and putting strain on the electrical grid and bleeding tax payer.

Yes SABC, and I can’t justify paying for your services, which I do not need or want anyway, either.

End of comments.

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