Telkom Media gets is licence but speculation persists about a buyer

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Telkom Media has been issued a pay-TV licence by ICASA, the industry regulator. The licence allows Telkom Media to operate a commercial subscription television broadcasting service.

"Our business plan consists of a dual platform, multi-technology service that exploits the full range of convergent technologies, including IP, and will offer consumers a competitively priced spectrum of entertainment and interactive services through a single service provider," said Mandla Ngcobo, CEO of Telkom Media.

According to Ngcobo the award of a subscription pay-TV licence to Telkom Media will extend competition and offer South African TV consumers more choice at attractive prices. "We look forward to providing inspiring, dynamic and refreshingly different programming for our subscribers," he said.

Meanwhile there has been speculation that a fund connected to the Public Investment Corporation (PIC) has emerged as the frontrunner to buy a stake in Telkom Media. Telkom Media's future has been in limbo for four months, after major shareholder Telkom pulled a surprise move by announcing it would dispose of a substantial number of shares in the company. It cited a number of reasons, including the fact that the pay television market had a longer payback period.

Telkom owns 66 percent of the company. It has reduced the debt financing target for Telkom Media from R7.5 billion to a little more than R5 billion. According to sources close to the negotiations, the consortium, which includes fund manager Harith, could buy between 31 percent and 34 percent. The consortium has seven more members, one of which is said to be either Nokia or Ericsson.

Alwyn Wessels, Harith's chief investment officer, said the company would not comment on "any deals we do". Johannesburg-based Harith invests in African infrastructure development in sectors such as telecoms and energy. If Harith is involved, it could help Telkom Media to acquire new content and continue building its multimillion-rand studios.

Goran Soderholm, Ericsson's vice-president for marketing and communications, said the company did not comment on business opportunities involving its clients. Ericsson was in "constant business negotiations" with Telkom Media, its customer, to provide various products.

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