Investors in DStv rival StarSat stand to lose more than R430m if the satellite platform is shut down by a directive by SA’s broadcast regulator. The business, which has 500,000 customers, says it will fight the decision.
In March, the Independent Communications Authority of SA (Icasa) decided that OnDigital Media (ODM) — owners of StarSat — “should wind up its affairs and cease providing broadcasting services” by September 18 2024, and “further inform its subscribers”.
But ODM is defiant, saying in a recent statement: “Despite the current challenges, StarSat will remain operational, and is committed to providing uninterrupted service to its users and business partners.”
The company’s licence, valid for 15 years, was issued in July 2008 and expired in July 2023. The company, which launched its service to compete with MultiChoice’s DStv, admits submitting its licence renewal application to the regulator after the required deadline, doing so on November 10 2023.
According to the Electronic Communications Act and related regulations, the holder of an individual broadcasting service licence has to submit its renewal application to the regulator no earlier than 12 months and no later than six months before the expiry of the licence.
“The authority does not have the legislative or regulatory mandate to consider a renewal application for a licence that has already expired,” Icasa said.
Business Day understands that such a shutdown will cost investors $25m (R433m).
The situation could also jeopardise the jobs of 600 ODM employees and affect the broader network of more than 4,000 dealers and sales agents, doing business associated with StarSat.
A legal battle is already under way.
The Gauteng high court recently dismissed an urgent interdict filed by ODM to block Icasa’s decision for it to cease operations. A review application is pending to address “the substantive legal issues between the two parties” once the court date is set.
Before enforcing the closure in March, Icasa says it informed ODM of its decision to do so at the end of October 2023.
According to the authority, a number of letters were written to ODM requesting it to provide information, including the amount of time it would require to wind up its affairs; a plan on how and when it would inform subscribers about the winding up of its services; and reasons for the proposed timelines of winding up.
“No answer to these questions was received by the authority,” Icasa said. “The authority once again urges all licensees to submit their renewal applications on time and in the prescribed manner. This is a legal requirement, so that SA citizens are not denied access to communication services.”
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