Keynote decision for Africa: UK Sky told to cut wholesale prices by regulator Ofcom
Regulator Ofcom has told Sky it must cut the price it charges rival cable, terrestrial and internet broadcasters to show its premium sports channels, particularly for the English Premier League. The broadcaster will have to sell Sky Sports 1 and 2 for up to 23% less than the current wholesale price.
The decision- part of the result of a three-year inquiry - aims to offer viewers more choice of pay-TV services. Sky said it would appeal against the "unwarranted intervention", arguing it would be to the detriment of consumers. "This is a marketplace where customers are well served with high levels of choice and innovation," Sky said.
Sky will have to sell Sky Sports 1 and 2 for £10.63 a month each - 23.4% less than at present. If the two channels are sold together, Ofcom has set a price of £17.14 - a discount of 10.5% on current wholesale charges.
Bodies representing rugby, football and cricket - which rely on lucrative TV rights deals - fear the proposals will mean less money going into sport.A spokesperson for the English Premier League said it was "very disappointed" and was studying the findings carefully.
So how does this relate to Africa? Well probably not much immediately. But after On Digital Media and Super5 have been throwing themselves against Multichoice for three years, it may well become the argument that they choose to use to address its incumbent position. It may then be taken up by the regulator ICASA as an anti-competitive issue.
There have been plenty of Pay-TV critics who have argued against “content lock-downs” by the two dominant players (DStv/Multichoice and Canal Plus) but thus far they have gained little traction with Government policy-makers and regulators. This decision may well see that position changing over the next three years.