Communications minister Solly Malatsi will appoint an independent mediator to facilitate negotiations between the SABC and Sentech over the former’s R1-billion debt to the latter for signal carriage.

“Upon taking office, the current minister emphasised the need to get the tariff dispute resolved between the two entities,” the communications department said in a presentation filed in parliament in late August and made available via the Parliamentary Monitoring Group this week.

“A pronouncement was made in the budget speech that the department will employ … an independent mediator… The terms of reference have since been revised in consultation with the two entities. Once finalised, the department will embark on a process to appoint the mediator,” the presentation to the portfolio committee on communications & digital technologies said.

The state-owned entities have been embroiled in a battle regarding signal distribution fees since at least 2021, with the SABC accusing Sentech of “monopoly pricing” for carrying its terrestrial broadcasting signals to South African television viewers. The matter was taken to the Competition Commission, which – after a two-year investigation – concluded that Sentech’s pricing was in no way unfair.

“The commission did not find any evidence that supports the view that the tariffs charged by Sentech for its transmission and distribution services are in contravention of section 8(1)(a) of the [Competition Act]. Further, the commission found that Sentech did not impose significant tariff increases over the financial period between 2018 and 2021. Sentech’s tariff increases over the relevant period were in line with inflation. In addition, the assessment revealed that Sentech was not deriving any excessive profits over the financial period between 2017 to 2021,” the Competition Commission said in its findings.

Only game in town

But industry experts have called these findings into question, noting that the signal distribution fees in areas where Sentech does not have a monopoly – such as satellite – are significantly lower than for terrestrial distribution, where Sentech is the only game in town.

Sentech was separated from the SABC in 1996, the idea being that it would become a service provider not only to the public broadcaster but to commercial television and radio stations across the country, yet it is still reliant on the SABC for almost half its revenue.

Read: A bad signal at Sentech (paywall)

According to the communications department’s presentation to parliament, the SABC’s historic debt to Sentech was about R1-billion at the end of March 2024, with the public broadcaster unable to service monthly repayments of about R55-million, excluding VAT.

Negotiations are said to be “at loggerheads”, with neither party willing to accept concessions brought forward by the other, according to the department’s presentation. The risk for the SABC is that Sentech might shut off its transmitters, leaving the broadcaster unable to reach its audiences across the country.

The communications department said a transmitter shutoff would result in audience and revenue losses for the SABC as audiences would migrate to competitor platforms. The move would also harm government’s universal service objectives, given that most of those affected would be audiences outside the major metropolitan areas.

“The debt owed to Sentech by the SABC is a material risk for continuity of broadcast services. Sentech finances are greatly affected, which affect their going concern status,” the department said in its presentation. – © 2024 NewsCentral Media