Reg Rumney
LOOK skywards at the Cairo skyline to get a glimpse of where newly established MultiChoice Egypt, launched in Cairo at the weekend, sees future growth.
The buildings bristle with costly satellite dishes, testimony to the desire of Egyptians for alternatives to the output of state-owned Egyptian Radio and Television Union, the Egyptian equivalent of the SABC. It is also proof of the ability of some to pay for those alternatives. The estimated 380 000 dishes, unlike the KU-Band dishes which will open up satellite services for South Africans, cost tens of thousands of rands.
While MultiChoice CE Hans Hawinkels sees great opportunity in providing a cheaper alternative — and the possibility of providing a “direct-to-home” service through satellite dishes — he notes that MultiChoice is not in the same convenient position as M-Net was when it started eight years ago. Those same dishes and the existence of a pay-TV service, Cable Network Egypt, mean the market is not as wide open as it was in South Africa.
Nonetheless, the service has taken off, and Hawinkels believes the company can break even within two years. MultiChoice’s initial investment to start up MCE was around R4-million. MultiChoice also bought a 10 percent stake in CNE, while this must have been offset by the undisclosed amount CNE paid for its 20 percent stake in MCE. MultiChoice’s total investment in MCE comes to R15-million.
Although, MultiChoice is a separate company from M-Net, MCE has arranged to get, for a fee, Supersport and M-Net’s movies and KTV, sent by satellite from South Africa.
Egyptian subscribers to the new pay-TV service get a good deal more than M-Net subscribers do. For around the equivalent of R800 a year, using the same M-Net decoders as in South Africa, Egyptian subscribers get a choice of five services on three channels. This includes the essence of what MultiChoice believes pay-TV is all about: M-Net’s sport and movies, plus CNN, M-Net’s KTV, the European M-TV music channel, and Kuwaiti TV.
Already, Hawinkels says, 3 664 Egyptian subscribers have signed up and the service only got under way last month.
MultiChoice Egypt is a joint venture between South Africa’s MultiChoice, one of the two companies into which M-Net was split 18 months ago, and CNE, in turn a subsidiary of ERTU. This is another shrewd move, and a strategy followed generally by MultiChoice in Africa. A joint venture with the local government-owned media gives an edge in fighting off competitors.
The Egyptian venture is another step in tying up the continent for MultiChoice — and a toe in the waters of the Arabic world, another big potential market.
It expects to begin operating in Zimbabwe this year, possibly also in a joint venture with the public broadcaster there.
Aside from operating the subscriber management services of Filmnet in Europe, already it has terrestrial “rebroadcast” — as in South Africa through towers rather than satellites — operations in Ghana, Nigeria, Botswana, Namibia and Lesotho.
The recent merger of the pay-TV interests of M- Net/Multichoice, still listed as one company, with those of Richemont’s pay-TV interests will among other things put $300-million, or a little over a R1-billion, in the hands of the new company, Payco, for expansion.
The merger makes Payco the third biggest subscription TV company outside the United States. Today Egypt, tomorrow the world?