The SABC has cut its long-term advertising rates by an average of 15
percent, citing high interest rates, power outages and soaring fuel
prices, writes Thabiso Mochiko in Business Report.

However, industry players and experts are sceptical, with some saying the reductions were motivated by a guilty conscience, others saying it was a ploy to lure back ad revenue that was lost to the print media, while yet others said the rates remained high.

The growth in advertising spend slowed to about 15 percent last year from 20 percent previously because of increases in interest rates, which have forced consumers to tighten their belts.

Media companies such as Avusa, Caxton and Naspers have cautioned recently that tough times lay ahead.

Gab Mampone, the SABC's group executive for commercial enterprises, said at the weekend that the reductions were also to support the firm's business partners and forge new relationships with others.

But analysts say the economic downturn is unlikely to have been the main reason, as last year the SABC proposed a rate hike of 39 percent.

Rajay Ambekar, a portfolio manger at Cadiz African Harvest, said the SABC's decision might have also been fuelled by customers shifting business to competitors or moving advertising to print or radio, as television remained the most expensive medium.

Click here to read the full report, posted on Business Report's website.