African pay-TV operator Econet Media has put its struggling satellite broadcasting business under administration, it says.
Econet, which operates under the “Kwese” brand name, will begin talks with creditors to rescue the business, CEO Joseph Hundah said on Wednesday.
In a market dominated by Africa’s largest pay TV operator, MultiChoice, Kwese TV mounted a good fight in more than 12 countries but could not catch up to DStv’s two-decade head start, abandoning the model for a free-to-air approach as of the end of 2018.
Hundah said the company has appointed accountants Ernst & Young to manage the process.
Hundah told Business Day Kwese’s free-to-air business was too small to sustain the financial burden of its satellite operations, which led to the decision to negotiate with creditors.
Econet Media is owned by Zimbabwe’s richest man, Strive Masiyiwa.
“The group’s inability to exit money out of Zimbabwe has had an impact” on the business, Hundah said. No other business in Masiyiwa’s Econet Global group is affected by the administration process, he said.
Zimbabwe stopped recognising the US dollar, SA rand and other foreign currencies as legal tender in June as it tries to curb black-market trading that has contributed to surging inflation.
Hundah said Kwese TV would continue to operate its free-to-air business in the rest of Africa as normal.
In March, the Independent Communications Authority of SA (Icasa) announced its decision to award the media consortium — 20% held by Econet Media, 45% by Royal Bafokeng and 35% by Mosong Capital — a licence to compete with broadcasters such as the SABC and e.tv after concluding an almost two-year process.
The service, called Kwese Free TV, which is yet to launch, is the first major player to enter the market since e.tv more than 20 years ago. /With Bloomberg