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Why MTN is pushing to buy over MultiChoice Pay TV platforms

Analysts have been weighing the MTN’s option of buying over a fully fledged Pay TV company, MultiChoice, than setting up a new one to drive its planned Africa wide investment in Pay TV especially in Nigeria.

Business Hilights recalls that MTN had acquired N34bn Broadcast Frequency licence from the management of the National Broadcasting Commission (NBC) to provide digital pay television broadcasting services in Nigeria.

The deal was part of the country’s 700MHz broadcasting spectrum solely for the purpose. Though it was not clear if the sudden move to buy over MultiChioce was to meet up time in the use of the frequency which had been lying waste for two years now, some top management employees at the MTN Group head office in Johannesburg, South Africa, recently hinted that the company will take a stand by the end of June on its plans to acquire MultiChoice Africa.

Some experts have before now been querying why NBC had not introduced the policy of ‘use it or lose it’ as recently introduced by the Nigerian Communications Commission (NCC) in the administration of telecoms spectrum which is under its control.

This is based on the fact that MTN had done nothing since it bought the broadcast frequency about two year ago.

However, a digital TV expert in Lagos who preferred anonymity said “I think the main reason why MTN did not follow up the purchase of the frequency with immediate use in investing in broadcast technology which the stuff is meant for was because it has noticed that the country may not meet the DSO, hence there is no need to spend money that will not be immediately recouped”.

“Let me tell you, it is because NBC knew it cannot meet the DSO deadline that it did not threaten MTN of sanctions if it fails to use the to700MHz broadcasting spectrum.

“Remember, with that singular purchase of that broadcast frequency, it means that the company holds the future of broadcast investment, expansion and whatever in Nigeria pending the expiration of that license.

According to officials of the company in South Africa, “Should we (the MTN Group) finally come to agree to terms with MultiChoice, which is expected to happen before June ending, then the pronouncement will be made in July”.

“Well, the whole gambit depends on the outcome we get from MultiChoice Nigeria, which is the cash cow for the pay television company.

“MultiChoice realises that in whatever acquisition plan it wants to get into, the Nigerian market must be strongly considered, given its peculiarities and the dynamics from rival companies.”

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