The decision to place Econet Media’s satellite television business into administration will have “no impact” on the planned launch of Kwese Free TV in South Africa, a top company executive has said.

Econet Media CEO Joseph Hundah told TechCentral on Thursday that the two businesses are “separate”.

“The entity in voluntary administration is related to the DTH (direct to home) satellite business, which we have de-emphasised and which we intend to cease altogether,” Hundah said.

Citing a letter sent to company creditors, TechCentral reported earlier on Thursday that the business had racked up more than US$130-million (about R1.8-billion) in external liabilities and was unable to pay suppliers before it was placed into administration earlier this week. It has hired Ernst & Young to try to salvage the business.

It said in the letter to creditors on 1 July that it was unable to meet its obligations to them.

Hundah emphasised that Kwese Free TV — the first broadcaster to be licensed by communications regulator Icasa to offer terrestrial television in South Africa in more than two decades — is unaffected by the developments. An Icasa spokesman was not immediately able to comment on the developments.

Small stake

Econet Group, the parent of Liquid Telecom, owns 20% of Kwese Free TV. Other shareholders are Royal Bafokeng Metix (part of Royal Bafokeng Holdings), which has a 45% stake, and Moss Mashishi’s Mosong Capital, which has a 35% stake. South Africa’s legal framework prevents Econet, a foreign company, from owning more than 20% of the new entity.

Icasa named Kwese Free TV as the successful applicant of the licence at a press conference in Pretoria in March. Five entities had been vying for the licence, which includes a big chunk of radio frequency spectrum in what is called digital broadcasting “Mux 3”.

The Kwese Free TV launch is subject to the migration of analogue to digital television in South Africa. Icasa gave Kwese 24 months to launch the service — until March 2021. The company has said it plans to start with a high-definition sports channel but also intends to launch offer four standard-definition channels, including ones offering a mix of entertainment.

Kwese Play issues ‘coincidence’

Meanwhile, Hundah said problems experienced by users of the company’s Kwese Play streaming service, offered in conjunction with US set-top box firm Roku, are unrelated to the developments at Econet Media. Users started receiving a message on their Kwese Play boxes this week that the service is no longer offered.

“The Kwese Play box issue is quite a separate issue and pure coincidence that the two issues have occurred at the same time,” Hundah said. “The system on the Play box was unexpectedly switched off by Roku, our system partners on Kwese Play.”

He said the company is working with Roku and “trying to understand why this was done without notice”.