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SA proposes radical changes to broadcasters’ foreign ownership rules

This could spark greater foreign direct investment into the country.
Image: Waldo Swiegers, Bloomberg

South Africa has proposed the radical relaxation of rules over foreign ownership in local broadcasters as well as the scrapping of restrictions that prevent cross-ownership of broadcasting services.

If implemented, these changes could spark consolidation in the sector and lead to greater foreign direct investment into the country.

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A draft policy framework white paper on audio and audiovisual content services, published by the department of communications & digital technologies on Friday, has proposed raising the foreign ownership limit on local broadcasters from 20% to 49% and doing away with this limit entirely for investors from other African Union (AU) countries.

“The draft white paper recommends that the limitations on foreign ownership in respect of linear individual audiovisual content services (broadcasting services) increases to a maximum of 49%,” the document reads.

“Also, the cross-media ownership (rules), including the distinction between AM and FM licences and the other prescribed restrictions that are currently applicable to commercial sound and television broadcasting services, are obsolete and need removal.

“In an environment where markets are disrupted by technology developments, where print media companies are no longer the largest media companies, and with the proliferation of on-demand content services, this proposed policy intervention will allow consolidation and the creation of synergies by various firms.”

Policed
Any anticompetitive behaviour by broadcasters that might flow from this relaxation of cross-ownership rules should be policed by the Competition Commission, the white paper said.

Also, to ensure that increased foreign ownership does not dilute the “South Africanness” of broadcasting content, communications regulator Icasa will need to monitor licensees closely for compliance.

The foreign investment restriction should fall away entirely where investors are from other AU countries, provided the foreign investor is from a member country with a reciprocal agreement with South Africa.

News of the proposed changes comes a week after it emerged that French media giant Groupe Canal+ has acquired a not-insignificant stake in South Africa’s largest broadcasting company, DStv parent MultiChoice Group, which owns MultiChoice South Africa.

Read: France’s Canal+ buys stake in MultiChoice Group

MultiChoice Group, which is listed on the JSE, disclosed the Canal+ investment in a statement on the stock exchange news service last Monday. Canal+ has bought 6.5% of the company’s total ordinary shares in issue, it said.

— (c) 2020 NewsCentral Media

Duncan McLeod is editor of TechCentral

This article was fist published on TechCentral here.

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