Could StarTimes go the GTV way?

StarTimes has slowed down its operations in Africa and is unable to start building a platform for operations in some countries even after having obtained a license due to lack of funds, this is according to the Group’s president, Pang Xinxing.   

In an interview with China Daily, Mr. Xinxing said the biggest lingering challenge is lack of funds.  Yet his plan in Africa is still to cover more than 70 percent of the viewing population with the service in the next three to five years in Kenya. That would mean attracting more than 10 million digital TV users and 16 million mobile multi-media users to become the leading media group in the region.

StarTimes' performance in Africa has at least attracted investment from the China-African Development Fund to help it expand business across the continent. "We see the company as a very brave and successful private company from China," says Liu Jie, a CADF representative in Africa. "Its proposal to establish a digital platform and network for African countries, led by digital TV, is a promising strategy for the development of Africa and also the company itself. So we decided to invest in it."

Most former GTV subscribers have barely healed from the liquidation of the London-based Pay TV operator in 2009, which left about 40,000 Kenyans crestfallen lot. A recent shutdown of Smart TV left about 2,000 subscribers with outmoded decoders.

GTV subscribers were left hanging on to obsolete satellite equipment and others have lost thousands of shillings in subscription fees following the announcement that the cable TV had been liquidated after owing to global recession. The Pay TV p blamed “excessive demands on the business” caused by the global financial crisis that interrupted its ability to secure funding on an acceptable timescale which left it with no choice but to cease operations”.

StarTimes has eight satellite stations to ensure its global service and now operates in more than 10 African countries including Burundi, Congo, Nigeria, Rwanda, South Africa, Sudan, Tanzania and Uganda. It has two broadcasting centers, in Dar es Salaam and Abuja. The company started its business in Kenya in 2008 and has worked on several projects including building the DTV trial system for Kenya Broadcasting Corporation.

In 2011, Pan Africa Network Group, StarTimes' sister company, gained its license through an open bid with local companies to construct the DTV infrastructure for Kenya, and by the end of last year had invested $32 million in the country. It has become a crucial part of the country's changeover process from analog to digital broadcasting.

Although it has become a big stakeholder in this field in Kenya, entering the market and establishing such a company in Africa was not easy as it involved many sensitive issues and conflicts with local interest groups, says Li, StarTimes (Kenya) president.

The group spotted the opportunity as early as 2008 when the registration of the company started, but the company didn't gain a license until late 2011 and only officially opened last year.

"When we finally acquired the signal transmission license in Kenya in 2012, there were waves of attacks from the country's mainstream media saying it was dangerous for a Chinese company to control the digital signal in Kenya," he says. "Even though we won the open bid, some senators and other local media called for a reassessment and termination of our license."

However, the Pay TV is not new to controversy, even before the dust settled on recent wrangles with Communication Commission of Kenya surrounding Star Times charging its subscribers for free-to-air channels in Kenya, the Pay TV company recently found itself embroiled in a dispute with Ugandan consumers for selling them outdated decoders.

Two Ugandan citizens Mulwani Taminwa and Muzamiru Kasamba were on 18th June 2013 cleared by the Commercial section of the High Court to file a case on behalf of more than 130,000 complainants whom, the Chinese duped into paying for the outlandish appliances. They will be joined by the Uganda Consumers Protection Awareness Association (UCPAA) to push for a refund from the Chinese. The victims will also seek a swap for the compliant decoders from the accused.

In South Africa, outrage erupted from various religious groups following news that Star Times planned to shore up the dwindling viewership of Top TV, which is owned by On Digital Media, through adding to its bouquets p0rnographic channels intended to keep subscribers glued to their screens.         

South Africa’s Business Day reports that Top TV’s trump card may yet be pornography. Quoting Alex Elliot, an insolvency director at a law firm Routledge Modises who said TopTV’s new license to air three porn channels might save the company.

“The business rescue process that it is entering now gave TopTV the time it needed to get the licenses for the porn channels — and, as we all know, sex sells,” he said. Top TV was recently licensed to broadcast three adult content channels—Playboy TV, Desire TV, and Private Spice in South Africa.

However, this has raised reasonable fears that the Chinese pay TV operator may include the Top TV porn channels in its bouquet offerings in other African countries in order to entice potential subscribers. StarTimes, with about nine million subscribers across China and Africa, has extensive experience in pay TV.

TopTV has been in distress since October last year and it came as no surprise when shareholders of ODM voted to accept the business rescue plan offered by Star Times. In the last two years, Top TV has had to stop airing five channels after creditors ran out of patience. Top TV owes Fox, Warner Bros and Paramount and Disney colossal debts that it has accrued over time.    

The new development has already been received with outrage in Nigeria and South Africa, with the rescue plan of ODM by Star Times being marred by massive public outcry, especially from South African religious organisations, which find Top TV’s association with pornography repulsive.