South African broadcasters are expressing serious concerns over the high and unsustainable tariffs set by the signal distributor, Sentech. During a recent virtual public hearing by the Independent Communications Authority of South Africa (ICASA) Committee, they emphasised the need for a more transparent methodology in determining these rates.
ICASA organised these public hearings to gather feedback on the draft Signal Distribution Services Regulations, designed to tackle market failures within the terrestrial signal distribution sector.
In commenting on the situation, William Bird highlighted important calls from broadcasters for greater transparency regarding the fees imposed by Sentech. These issues were underscored during the hearings, where stakeholders presented written and oral submissions concerning the draft regulations.
Lungile Binza, Chief Operating Officer of the South African Broadcasting Corporation (SABC), addressed the committee, stating that the public broadcaster’s tariffs are excessively high. He reiterated the need for transparency in tariff determinations, noting that SABC is currently paying Sentech approximately US$1.1 million monthly to manage its debt.
Binza articulated SABC’s concerns: “The tariffs charged to the SABC are high but unsustainable, anti-competitive, and monopolistic. These costs are unregulated, so we are here advocating again. This expenditure marks our second-largest financial burden after salaries, surpassing our content costs, which are central to our business operations.”
The committee also discussed the potential discontinuation of medium wave and AM licenses. Radio entities such as Primedia and Radio Pulpit urged Sentech to maintain its signal distribution services for these media. Sentech has indicated plans to phase out these services due to their unprofitability, causing alarm among the radio outlets’ representatives.
Justin Limpitlaw, a legal representative for both organisations, stressed that Sentech’s position poses an existential threat to their AM licenses. He pointed out that Sentech has clarified that it plans to cease medium wave services altogether, which would have dire consequences for these broadcasters.
Tebogo Leshope, CEO of Sentech, addressed the committee regarding compliance costs associated with the regulations. He expressed concerns about the financial viability of continuing medium wave and AM services, which have been running at a loss.
Leshope welcomed feedback from broadcasters but emphasised the need for a sustainable approach moving forward. “When a service is provided at a loss, it effectively becomes a loss leader. It’s only rational for an organisation to reevaluate its stance on sustainability,” he explained. He encouraged interested broadcasters to engage with Sentech to ensure that the costs associated with these services are adequately covered over the long term.
E-Media also called for increased transparency from Sentech during its presentation to ICASA, echoing the sentiments of other stakeholders regarding the need for clarity in financial matters.
