The Council of the Independent Communications Authority of South Africa (Icasa) has extended the consultation process of its Inquiry into the Subscription Broadcasting Services Market into the current financial year.

The inquiry started in 2016, when the authority published a notice of its intention to conduct an inquiry into the state of competition in the subscription broadcasting services sector, and published its draft findings in April 2019.

“Upon considering the draft findings emanating from the inquiry, Icasa is of the view that further consultation and engagement with stakeholders is required, as any regulatory intervention in this market ought to take account of current policy developments, as well as recent technological and market trends, including entry of complementary and competitive services introduced by, among others, over-the-top (OTT) players,” said Icasa chairperson Dr Keabetswe Modimoeng.

The draft findings identified four retail and two wholesale markets, pertaining to the retail distribution of broadcasting and video-on-demand services, and wholesale supply and acquisition of premium and non-premium content in South Africa.

It revealed that competition is ineffective in three of the identified markets, namely the retail distribution of basic-tier subscription television services and satellite-based free-to-air television services; the retail distribution of premium subscription television services; and the wholesale acquisition of premium content for distribution in South Africa.

MultiChoice was found to possess significant market power in the markets that are characterised by ineffective competition.

Further, having considered the impact of OTT services, Icasa found that these services are expanding in the number of new entrants and the scale of operations, particularly international video-on-demand service providers, however, the impact of OTT is muted amid limited access to broadband and/or Internet services, the perceived high cost of data and low Internet speeds.

Amid ongoing developments in a rapidly changing market, Icasa’s consultation process extension builds upon, and will update and refine, the work that was undertaken during the 2021/22 financial year.

“Following the identification and definition of relevant markets and market segments, the empowering legislation provides that the authority must assess the effectiveness of competition in those markets and market segments,” said Modimoeng, noting that Icasa must consider matters such as the non-transitory (structural, legal and regulatory) barriers to entry into the applicable markets or market segments and the dynamic character and functioning of the markets or market segments.

“The authority is mindful that any regulation of the market and/or its market segments must be aimed at enhancing competitiveness in the market going forward.”

The extended consultation process will include the publication of a questionnaire to solicit comments and information from interested stakeholders.

The authority will conduct a full inquiry that includes publication of an updated discussion document, as well as public hearings, to come to a conclusive determination of the subscription TV market dynamics going forward.

“The rebooting of this process is meant to enable the authority to take account of all relevant and current developments to inform a robust, forward-looking regulatory intervention that balances interests of consumers and stability of the broadcasting services market,” Modimoeng concluded.