African communications provider Gateway Communications this week announced that it would launch GTV, a pan-African pay-TV delivered service, writes Russell Southwood on the Balancing Act website.

By lowering the price of its service it will create some competition in
what thus far has been a largely uncompetitive area. But whilst there
has been much talk about convergence, this move is the first major
scale, pan-African investment in broadcast content by a telecoms
connectivity provider. Russell Southwood talks to Gateway’s President
Julian McIntyre about what prompted this move.

GTV will provide
a variety of content at a more affordable subscription to its main
rival DSTV, including sport, movies, popular series, music, education
and religious content. The service will carry both major international
channels as well as a number of “in-house” channels. The service will
also focus heavily on promoting African content.

The GTV service
will be available from the middle of 2007, with a phased roll-out
across sub-Saharan Africa. GTV will be targeting customers who have
previously been unable to afford subscription-based services and have
been limited to a small number of national free-to-air television

Q: Why did Gateway choose to go into pay-TV? At first glance, it’s not an obvious move.

start with the basics. It’s a market-driven opportunity and the
greatest opportunity in pay-TV globally is in sub-Saharan Africa. There
are currently 4 million colour TV sets in the region but only a 1-2%
take-up of pay-TV. What is happening is that penetration rates are
converging globally. Africa may have different routes to market but it
will not be exempt from this trend. So for example, pay-TV penetration
rates in eastern Europe are currently 15-20% but will reach Western
European rates of 30-40% before too long. Indeed these kinds of growth
rates have been happening everywhere but Africa. There may be different
cultural elements in terms of content but Africans like everyone want
information, education and entertainment.

Q: I can see the opportunity buy why Gateway?

have played a substantial role in facilitating communications
penetration in Africa. We have a strong growing market in that sector
that gives us a great cash flow. We see a number of opportunities to
diversify into new areas. We already have a proven track record in
building a successful business and we feel pay-TV is comparable to the
beginning of mobile phones in the late 1990s.

Q: Are you worried that DSTV has a “a lock” on many markets at the moment?

1% of households taking its service, we’re not really talking about a
lock on the market. If it is, it’s the kind of lock I’d like to unlock.
It’s going to be about offering the right content and we’ll be making
announcements on that in the near future. The content proposition will
be better than DSTV. We’re making the service affordable. The current
incumbents have kept pay-TV an elite product. We want a service for the

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