South Africa’s Plans for Digital TV Switch May Help Vodacom, MTN

JOHANNESBURG (Capital Markets in Africa) – South Africa’s pledge to switch to digital TV by the end of next year may free up spectrum for wireless operators such as Vodacom Group Ltd. And MTN Group Ltd., while also allowing smaller companies to enter the telecommunications market.

Vodacom and MTN, South Africa’s top two mobile-phone companies, have long bemoaned the lack of available spectrum for broadband as they struggle to grow their businesses in Africa’s most industrialized economy. The government had indicated two years ago it intends to run an auction, but the plan has been mired in political and regulatory wranglings.

That may change as the communications ministry kicks off the long-awaited move to digital TV from analogue, part of a new 20-year broadcasting policy aimed at boosting investment. Naspers Ltd., Africa’s largest company and biggest pay-TV provider, has already moved its M-Net service to digital, while state broadcaster SABC remains stuck on the older format. The digital roll-out will be conducted on a province-by-province basis, starting with the central Free State.

The government hasn’t yet decided on how it will allocate spectrum made available from the digital push as it’s seeking ways to ensure smaller operators can enter the market, Communications Minister Nomvula Mokonyane told reporters in Pretoria on Monday. Other internet providers include Telkom SA SOC Ltd. and Cell C Pty Ltd.

The communications department will start a review of SABC and has plans to initiate digital radio this year, she said.

Source: Bloomberg Business News