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Zim Government’s ownership of Multichoice Zimbabwe and why it’s reluctant to license Kwese TV

   

The statement by the Broadcasting Authority of Zimbabwe yesterday announcing that Kwese TV is not legally licensed to provide satellite TV services came as a huge disappointment to a lot of Zimbabweans. The interest in an alternative to DStv, which has so far enjoyed a monopoly on TV entertainment is quite huge in Zimbabwe.

The rejection has resulted in people querying the reasons for denying Kwese TV a broadcasting license. Contrary to denying Kwese a license, the government is expected to encourage investment which creates value to consumers through increased competition, employment, taxes, and a possible injection of life into local sectors such as film.

One of the issues cited is that government actually owns part of Multichoice Zimbabwe (whose registered company name is SkyNet Holdings (Pvt) Ltd). Government minister, Jonathan Moyo, said in a tweet yesterday:

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Though quite unlikely, it is possible therefore that government views Kwese TV as business competitor and not an investor into the Zimbabwean economy. Unlikely because this betrayal a level of small mindedness that’s not expected of a government – essentially failing to grasp the positives for the economy that a second player in pay TV presents.

It is possible however because when it has a horse in the race, the Zimbabwean government has been known to use regulation to favour its companies. A case in point is the telecoms industry where government has on multiple occasions made pronouncements to force private players to assist government owned players.

While competition is a possibility, the more likely reason is political. Government has been clear that it fears media, TV and radio media going into the hands of private companies. Indeed, that could have been the reason it acquired a stake in Multichoice Zimbabwe. The Zanu-PF government has to date considered it high risk politically to have an independent broadcaster in Zimbabwe and has so far only issued broadcasting licenses to government owned companies, or those owned by friendly politicians.

On how the government came to own part of Multichoice Zimbabwe: The government bought a minority stake in 2002. It’s not clear just how small/big a stake.

From what we can tell reading reports from back then, the government issued itself a license (that is its company called Transmedia. Transmedia had previously been part of ZBC where it offered technical services) to provide pay TV satellite services and essentially used the license to get a minority stake in Multichoice Zimbabwe. Multichoice in turn used the license to operate the DStv we know today.

Even back then, a report in the Zimbabwe Independent shows that other companies bidding for licenses were not amused by the government’s move:

A STORM is brewing between government and applicants for broadcasting licences who have charged that the delay in the issuing of licences has cost them millions of dollars and that irregularities have surfaced in the process.

The applicants, who say they will sue the state to recover the funds lost due to procrastination, have also questioned the legality of the licensing of Transmedia – a wholly government-owned company – as a subscription satellite broadcaster, which they say infringes the Broadcasting Services Act.

The recent deal between Transmedia, a licensed signal carrier, and Skynet, an agent of South African satellite broadcaster Multichoice, has raised eyebrows. The deal will enable ZBC to be carried by the DStv network. A recent press statement from Skynet suggested that the deal amounted to regularising the operations of Multichoice Zimbabwe. Transmedia is the former technical arm of ZBC which is now a separate company owned by the state.

Broadcasting Authority of Zimbabwe (BAZ) chief executive Thomas Mandigora, in written responses to the Zimbabwe Independent, yesterday denied that Multichoice had been licensed but confirmed that Transmedia held asubscription satellite broadcasting licence.

“Multichoice has not been licensed by the authority,” said Mandigora.

It will be interesting therefore to see how the events around the licensing of Kwese TV or Dr Dish unfold over the next several days and weeks.


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