Naspers — that has internet subscriber platforms including a stake in M-Web — hopes the imminent regulatory framework will help introduce real competition in the local market that has thus far resulted in Telkom dominating most spheres of the telecommunications sector.
Naspers CE Koos Bekker on Wednesday derided Telkom’s tariffs as “insane”, and added that: “unless the market opens up, the country will fall behind in terms of internet density”.
In a bid to influence the new framework, the Cape Town-based media group that also owns MIH, is set to continue contributing towards hearings about the Convergence Bill. However, Bekker declined to outline what agenda the company is pushing for as the final converged framework is still being shaped.
“We have made our written submissions and are now ready for oral submission,” he said.
On other regulatory issues, Bekker noted that the M-Net open time window falls away with effect from April 2007. The closure of the two-hour open slot to non-M-Net subscribers is expected to have a negative impact in terms of advertising revenues.
“We are looking at dealing with issues coming from this [the closure of the open time slot] on the advertising side of things,” Bekker said.
Turning to print media business, Naspers said this segment was buoyed by robust advertising revenues.
This also includes South Africa where print businesses grew by 20% on the back of the country’s robust advertising growth. Coupled to satisfactory circulation levels and the growth of some new titles, this translated into operating profit before amortisation of R610-million.
Bekker, however, noted that the past buoancy partially driven by the advertising boom will not last forever and the group will continue looking for growth opportunities including expanding its footprint in Asia and Africa.
“What we do know is that business is cyclical and the boom does end at some point,” he pointed out.
Turning to Asia, MIH CEO Cobus Stofberg noted that ventures in countries such as China and India take some time to pay off, owing to certain dynamics and challenges these huge markets present. Naspers already owns a stake in China’s Beijing Media Corporation and Hong Kong-listed Tencent.
Stofberg said although it would be difficult to predict the size of China’s media market, the company would continue investing in that country and was not fazed by minority stakes in China given the huge size of the market.
Naspers N shares slid 3,51% or R3 to R82,50 at the JSE’s close on Wednesday. – I-Net Bridge