Regulator orders shutdown of StarTimes South African arm, StarSat over license controversy

South Africa’s pay-TV landscape is facing a shakeup as the Independent Communications Authority of South Africa (Icasa) declined to renew the license of On Digital Media, the operator behind StarSat, the South African branch of StarTimes Media.

The decision, communicated in a letter to On Digital Media, mandates the company to cease operations by September 18, 2024, leaving the reasons for this decision and the steps required to secure a new license unclear.

Despite the shutdown order, StarSat CEO Debbie Wu assured that the company will not be closing its operations anytime soon and is actively liaising with Icasa to find a resolution.

We can assure you and the public that On Digital Media/StarSat will not be closing its operations anytime soon.

On Digital Media CEO Debbie Wu

“There’s been no notice to staff and StarTimes is still selling StarSat decoders to new customers,” an insider told TVwithThinus.

Reports that Icasa hadn’t renewed StarSat’s licence surfaced in early June 2024.

Icasa claimed it. had sent a letter in mid-March to Wu and On Digital Media’s general manager for legal, risk, and compliance, Ronald Reddy, indicating it may issue a statement to inform subscribers, content providers, and financial stakeholders about the shutdown.

“Take note that Icasa may publish a notice on its website and/or in the Government Gazette advising affected subscribers, content providers and stakeholders about the winding up of ODM’s broadcasting services“, the regulator said.

Icasa clarified that it does not have the mandate to consider transfer or renewal applications for expired licenses and instructed On Digital Media to share its plan for notifying subscribers, content providers and stakeholders about the service cessation.

Wu stated that the company is exploring all regulatory and legal issues surrounding its licensing and reiterated that StarSat will continue its operations for the foreseeable future.

“Should such an event materialise, which we doubt will happen, we will respect our obligation in terms of the law to notify all interested parties,” Debbie Wu said, according to TVwithThinus.

Chinese pay-TV service StarTimes owns 20% of On Digital Media, which is the maximum ownership allowed for a foreign company in a South African media business.

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A StarSat shutdown reduces competition

If StarSat were to shut down, it would remove a competitor from South Africa’s pay-TV market, where it is known as the second-most affordable option among the major players, including DStv and Openview, according to My BroadBand.

It, however, has far fewer subscribers than DStv where it offers a Special, Super and Max package with a lot of Chinese TV channels.

StarSat, formerly known as Top TV, launched in May 2010 under On Digital Media’s ownership. The broadcaster encountered financial difficulties two years after its launch and entered business rescue. During this period, StarTimes acquired a 20% stake in On Digital Media.

In October 2013, Top TV was rebranded to StarSat as the business rescue practitioners neared the conclusion of their plan, which had been approved by creditors and shareholders earlier that year.

However, the company faced further challenges, including job cuts in 2015 due to difficult economic conditions and a fine from the Broadcasting Complaints Commission of South Africa (BCCSA) for broadcasting adult content channels without Icasa’s approval.

On Digital Media exited business rescue in August 2016 but continued to struggle with maintaining subscriber numbers and retaining channels. Despite these challenges, StarSat has remained a significant player in the South African pay-TV market. The current licensing issue with Icasa adds another layer of complexity to the company’s ongoing efforts to stabilise and grow its business.