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Masiyiwa to wrestle Multichoice for Pay TV market

Entrepreneur Strive Masiyiwa


Serial entrepreneur Strive Masiyiwa has announced plans – through Econet Global – to launch a pay TV service known as Kwesé TV, which will offer exclusive sports and entertainment programming to African markets.

The newest venture, which has been in the pipeline for three years, will see Econet Global competing with Multichoice, owners of DSTV, who have dominated the pay TV service since 1995.

“You may know of other companies in this market, most of which either provide content that’s far too expensive, or content that’s just so bad it's not worth paying to see it, even if it’s cheaper.

We know you understand what the problem is. And I believe my team has developed an exciting product which will change that dynamic,” said the billionaire on his facebook post before adding that Kwesé TV’s success will depend on their ability to acquire and also to develop new, high-quality and unique programming at an affordable price.

Dr Masiyiwa said that "Kwesé" means "everywhere" and “anywhere" signalling their intention to penetrate the African market as a whole in a similar manner to MultiChoice’s strong footprint across Africa.

It won’t be the first time a company tries to wrestle Multichoice for the pay TV market share. In 2010, On Digital Media, owners of StarSat pay-TV service was expected to give DSTV serious competition through their TopTV service but the business has since floundered and it’s languishing under a business rescue process.

Multichoice’s lack of credible competitors has made the company a target of criticism for being a monopoly as it controls 98 percent of satellite TV in Africa. Furthermore, DSTV has taken some flak for continuously increasing prices without much improvement on the content they are offering, often accused of airing too many repeats.

But Multichoice continues to be a money spinner for its parent company Naspers. Multichoice reported in its 2015 interim financial results that its group revenue increased from R15.1 billion to R17.1 billion, while its core headline earnings grew from R3.2 billion to R3.6 billion over the past year. DStv’s subscriber base in South Africa also grew from 5.1 million to 5.5 million homes year-on-year. In total, DStv has more than 8 million subscribers across Africa.

However, Econet Wireless might prove to be Multichoice’s most formidable competitor yet. According to Masiyiwa, Kwesé TV will be built around Econet’s core capabilities of satellite communications, fibre optic networks, and mobile services.

Econet is a privately held diversified telecommunications group with operations and investments in Africa, Europe, South America, North America and the East Asia Pacific Rim, offering products and services in the core areas of mobile and fixed telephony services, broadband, internet, satellite and fibre optic networks.

Econet was founded in 1993 by Strive Masiyiwa, who first came to international prominence when he fought a five-year constitutional legal battle leading to the removal of the state monopoly in Zimbabwe’s telecommunications sector. The landmark ruling is regarded as one of the milestones in the opening up of African telecommunications to private capital.

Econet subsidiaries include Econet Wireless International, Econet Wireless Africa, Econet Wireless Global, Econet Enterprises and the Liquid Telecom Group.

But Billy Sekgororoane, Managing Director of Multichoice Botswana, is not a worried man. “We welcome competition as we believe that it benefits the broadcasting and production industries, it can also contribute to diversification of economies, the growth of local production industries and a pluralism of services to customers. Ultimately television viewers may benefit through the additional volume and variety of content that will be distributed by various operators in the market.”

On the issue of Multichoice’s monopoly on the Pay-TV market, Sekgororoane says that couldn’t be farther from the truth. As a matter of fact, Multichoice’s view is that competition in a market stimulates growth, which in turn stimulates the industry and when that happens, the industry in Africa will grow and branch out into the rest of the world. “That is the position that Multichoice wants to be in. Multichoice is, therefore, not a monopoly and does not encourage monopoly in any way,” He remarked.

While consumers might hope that the imminent competition between Kwese TV and DStv will result in competitive prices, Sekgororoane points to a tough trading environment and has defended Multichoice’s annual price increases as borne out of survival than pure profit making.

“Subscription price increases generally occur every year in April, at the beginning of our financial year. These are necessitated by increasing input costs.  Multichoice Africa’s cost structure has various input costs, which include staff costs, technical infrastructure costs, satellite lease costs, facility cots, marketing and programming costs.

In determining the price increases Multichoice takes into account many factors including, and amongst other things, current inflation, impact on subscribers, efficiencies that may be effected in the company that may offset the necessity for a price increase. Unfortunately, it is necessary to effect price increase due to the ever rising costs to the business.”

He however explained that Multichoice has various packages that will appeal to different consumer segments depending on what they can afford.  Multichoice offers a variety of bouquet options on its DStv service, from basic to premium services. “The range of DStv packages allows subscribers flexibility in price (from P105.00 to P610.00 per month), and choice without compromising quality and variety. Subscribers are able to choose any bouquet of their choice depending on affordability and needs” said Sekgororoane.

Pay TV revenues in Sub-Saharan Africa will reach $6.22 billion in 2020, up from $3.54 billion in 2014 and $1.92 billion in 2010, according to a new report from Digital TV Research released in January 2015. The fourth edition of the Digital TV Sub-Saharan Africa report forecasts that South Africa and Nigeria will contribute more than half of the region’s pay TV revenues by 2020 for the 34 countries covered. Second-placed Nigeria will more than double its revenues from $449 million in 2014 to $1,148 million in 2020.

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Dark days as Aviation industry collapses

22nd November 2020
Air Botswana

As the Aviation industry takes a COVID-19 pummeling, for Africa the numbers are staggering, Chief Executive Officer of the International Air Transport Association (IATA), Alexandre de Juniac has observed.

Speaking recently at the African Airlines Association (AFRAA) has been hosting an Annual General Assembly, de Juniac said traffic is down 89% and revenue loses are expected to reach $6 billion. And this figure is likely to be revised downwards in the next forecast to be released later this month. “But the impact is much broader. The consequences of the breakdown in connectivity are severe,” he surmised.

According to de Juniac, five million African livelihoods are at risk while aviation-supported GDP could fall by as much as $37 billion. That’s a 58% fall.

“We have a health crisis. And it is evolving into a jobs and economic disaster. Fixing it is beyond the scope of what the industry can do by itself.”

He said they need governments to act, “And act fast to prevent a calamity.”

“We are in the middle of the biggest crisis our industry has ever faced. As leaders of Africa’s aviation industry, you know that firsthand. Airline revenues have collapsed. Fleets are grounded. And you are taking extreme actions just to survive. We all support efforts to contain the COVID-19 pandemic.  It is our duty and we will prevail. But policymakers must know that this has come at a great cost to jobs, individual freedoms and entire economies,” he said.

de Juniac used the AFRA general assembly platform to amplify IATA’s call for governments to address two top priorities: “The first is unblocking committed financial relief. Airlines will go bust without it. Already four African carriers have ceased operations and two are in administration. Without financial relief, many others will follow.”

Over US$31 billion in financial support has been pledged by African governments, international finance bodies and other institutions, including the African Development Bank, the African Union and the International Monetary Fund.

Unfortunately de Juniac pointed out, in his words, “Pledges do not pay the bills. And little of this funding has materialized. And let me emphasize that, while we are calling for relief for aviation, this is an investment in the future of the continent. It will need financially viable airlines to support the economic recovery from COVID-19.”

The second priority, according to IATA is to safely re-open borders using testing and without quarantines.

“People have not lost their desire to travel. Border closures and travel restrictions make it effectively impossible. Forty-four countries in Africa have opened their borders to regional and international air travel. In 20 of these countries, passengers are still subject to a mandatory 14-day quarantine. Who would travel under such conditions?” de Juniac quizzed rhetorically.

He suggested that countries should adopt systematic testing before departure provides a safe alternative to quarantine and a solution to stop the economic and social devastation being caused by COVID-19.

He admitted that it’s a frightening time for everyone, not least the millions of people whose livelihoods depend on a functioning airline industry. Right now, de Juniac said there essentially is no airline industry. He cited the example that China’s largest airlines sound optimistic, but in a vague way. “They gave no hard data about current yields, loads, or forward bookings, discussing only developments in 2019. Boy, does that seem like ages ago.”

Aviation’s darkest days

The IATA CEO said these are the darkest days in aviation’s history. “But as leaders of this great industry I know that you will share with me continued confidence in the future.

Our customers want to fly. They desire the exploration that aviation enables. They need to do international business that aviation facilitates. And they long to reunite with family and loved ones.”

He said the industry will, no doubt, be changed by this crisis, but flying will return. “Airlines will be back in the skies. The resilience of our industry has been proven many times. We will rise again,” he said.

de Juniac said Aviation is a business of freedom. “For Africa that is the freedom to develop and thrive. And that is not something people on this continent will forget or lose their desire for.”

 

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Inflation increased to 2.2% in October 2020

22nd November 2020

Headline inflation increased from 1.8 percent in September to 2.2 percent in October 2020, but remained below the lower bound of the Bank’s medium-term objective range of 3 – 6 percent, and lower than the 2.4 percent in October 2019.

According to Statistics Botswana, the increase in inflation between September and October 2020 mainly reflects the upward adjustment in domestic fuel prices {Transport (from -3.9 to -2.5 percent)}, which is estimated to have increased inflation by approximately 0.29 percentage points.

“There was also a rise in the annual price increase for most categories of goods and services: Alcoholic Beverages and Tobacco (from 6.2 to 6.6 percent); Clothing and Footwear (from 2.5 to 2.7 percent); Communications (from 0.6 to 0.9 percent); Housing, Water, Electricity, Gas and Other Fuels (from 6.4 to 6.6 percent); Recreation and Culture (from 0 to 0.2 percent); Miscellaneous Goods and Services (from 0.7 to 0.9 percent); Food & Non-Alcoholic Beverages (from 4.2 to 4.3 percent); and Furnishing, Household Equipment and Routine Maintenance (from 2 to 2.1 percent). Inflation remained stable for: Education (4.7 percent); Restaurants and Hotels (3 percent); and Health (1.5 percent). Similarly, the 16 percent trimmed mean inflation and inflation excluding administered prices rose from 1.8 percent and 3.1 percent to 2.2 percent and 3.4 percent, respectively, in the same period.”

[Source: Bank of Botswana]

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BDC injects further P64 million into Kromberg & Schubert

22nd November 2020
BDC

Botswana Development Corporation (BDC) has to date pumped a total of P100 million into the expansion of Kromberg and Schubert, a car harnessing manufacturing company, operating from Gaborone Old Naledi.

At the official ground breaking ceremony of the company‘s new warehouse today, BDC Managing Director, Cross Kgosidiile revealed the wholly state owned investment corporation has pumped P64 million into the expansion which entailed building of the new warehouse.

Kgosidiile explained that this follows another expansion project which was successfully launched in 2017, in which BDC invested P36 million, bringing the total investment into Kromberg at P100 million. The MD also acknowledged Botswana Investment and Trade Centre (BITC) as a partner in the project and for having facilitated the acquisition of the land.

 

Giving a keynote address, Minister of Investment, Trade & Industry, Peggy Serame highlighted the importance of infrastructural development in growing the local manufacturing sector and transforming the economy of Botswana.

Serame underscored the value of strategic partnerships between Government and the private sector, noting that when the two work together and pull together in one direction results will be evident and jobs will be created.

“With the prevailing conditions of depressed economy occasioned by COVID-19 pandemic, government is reliant on entities like BDC to bring in revenue and acceleration of private sector development in line with its mandate and strategic plan. This plan is supported by the need to invest in growth sectors and accelerate the implementation of the Economic Diversification Drive,” Serame said.

Minister Serame noted that the partnership between BDC and Kromberg & Schubert begun in 2017 when the P36 million, 4100 square metres factory expansion for the company was launched.

 

She said the launch of the 7320 square meters factory expansion, to be built at the tune of P64 million signals the continuation of the good partnership between the two companies.

 

“I must commend BDC for their continuous efforts to build partnerships with the private sector geared towards contributing to economic development of this country.”

 

Minister Serame also added that BITC through its robust investor aftercare programme continues to provide value added and red carpet to Kromberg and Schubert under their One Stop Service Centre.

 

“In this regard BITC facilitated acquisition of land to enable this expansion. I therefore would like to commend BITC for their timely facilitation to make this expansion possible,” the minister said.

 

Kromberg & Schubert was incorporated in Botswana in 2009; The Company has grown to asset its position as a significant player in the regional automotive industry value chain.

 

The company is also a critical player in the economic development of Botswana, it currently employs 2100 Batswana across its operations. Kromberg exports on average P2.0 billion worth of goods annually, contributing significantly to foreign exchange.

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