Media ownership in SA will change as government seeks to increase investment opportunities in broadcasting and enable the industry to compete in the global market.
It is almost a given that government will deregulate the broadcasting sector by the end of the year or early next year. Analysts are already predicting a media feeding frenzy as players vie to consolidate their assets and new players stake their claims.
The inquiry into ownership and control of broadcasting services, hosted by the Independent Communications Authority of SA (Icasa) in February, is generally seen as a mere formality; government and industry players agree that the ownership laws need to be changed. They are seen as stifling competition, growth and diversity of ownership in the industry.
Sections of the Independent Broadcasting Authority (IBA) Act of 1993 restrict any single operator from owning more than two FM and two AM licences, and say the two may not overlap in terms of broadcast areas.
Foreign companies may own only 20% of a radio or television station and restrictions on ownership across media have precluded print media houses from buying into broadcasting. Icasa has also deemed unworkable the IBA provisions relating to satellite television.
Industry players charge that the current market structure has two negative effects. It has consolidated the SABC as an anticompetitive force in free-to-air television and commercial radio. And in the private sector there is fragmentation, with commercially unsustainable entities scrapping over shrinking advertising revenues.
One of the casualties of the restrictions has been Nail, whose planned acquisition of Kagiso Media was blocked by Icasa despite being approved by the competition commission. Nail has since announced the sale of its media assets.
Deutsche Securities media analyst Max Koep says he does not expect a flood of new players once the industry is deregulated. "There are only a few radio stations worth buying, so I think the big guns such as Primedia, Johnnic and Media24 will be vying for those [stations]."
Marcus Wendell Jacobs, former business development director of US-based Q Radio, says raising the limit on foreign ownership would "allow [empowerment groupings] access to foreign capital and enhance their capacity to compete against major players."
Media players, however, agree that ownership of the media should remain in local hands. The UK and Australia are also battling with the issue of relaxing foreign ownership restrictions.
