Naspers's Multichoice to Offer Mobile TV Service `as Cheaply as Possible'

Naspers Ltd.’s MultiChoice South Africa, Africa’s largest pay-television operator, says it won’t charge more than 100 rand ($13.94) a month for a subscription to its mobile-phone TV service to lure clients.

“Initially we will have to make this available as cheaply as possible, to encourage take up,” Nolo Letele, executive chairman of Multichoice South Africa, said in an interview in Johannesburg today.

Multichoice is one of two broadcasters awarded a mobile TV license today. The other licensee is e.tv, the free-to air broadcaster controlled by Hosken Consolidated Investments Ltd. The Independent Communications Authority of South Africa said the companies must begin offering services within 12 months of receiving a license.

MultiChoice, which sells pay-TV services to 2.85 million homes in South Africa, is in negotiations with South Africa’s mobile-phone operators including MTN Group Ltd., Africa’s largest mobile-phone operator, and Vodafone Group Plc.’s Vodacom Group Ltd, about importing handsets.

“There is a lot still to be done. We have to worry about handsets, and getting them in the country, via the mobile operators, that sort of thing,” Letele said. The operators “are keen to do it, it’s a new concept, new devices.” Operators will be paid a percentage of the subscription fee, he said.

Letele said that the cost of TV-enabled mobile phones is a concern for MultiChoice.

“We are more interested to see that handset prices come down so they can be accessible to the masses,” he said, adding that MultiChoice will “definitely” have to subsidize handsets. “We hope to with work suppliers and mobile operators because ultimately they are the ones who sell these handsets to consumers,” he said.

It may take five to seven years for the mobile venture to become profitable, and MultiChoice will be targeting “a couple of million” South Africans for the offering, Letele said. The company has been running trials in the country for the past five years and will limit its offer to about eight channels, he said.

To contact the reporter on this story: Nicky Smith in Johannesburg at nsmith38@bloomberg.net

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