SABC WANTS R3 BILLION BAILOUT

Thursday, September 17, 2015

BREAKING. StarTimes South Africa running StarSat set to retrench staff; must take 'drastic measures' due to financial 'predicament' the pay-TV operator is facing.

StarTimes South Africa and On Digital Media (ODM) is set to retrench staff as part of "drastic measures" to help with the financial "predicament" of the beleaguered Woodmead based pay-TV company which runs the StarSat satellite pay-TV service in South Africa.

Following its commercial launch in May 2010, after a string of bad decisions, technical mistakes, poor customer service and subscriber uptake, the TopTV brand flamed out and was relaunched under the StarSat brand.

Meanwhile ODM, still mired in a business rescue process since April 2013, got a lifeline in the form of China's StarTimes operating elsewhere on the African continent since 2007, that took a 20% equity stake in ODM but gets 65% of the profits.

While the latest research shows that the pay-TV market on the African continent is set for a boom time, StarTimes South Africa is struggling and now retrenchments are looming. Rounds of retrenchments and a process of voluntary severance packages happened at ODM before.

Now CIO reports that StarTimes South Africa is telling workers that the company is facing a predicament due to increased pressure on the financial position of the company.

In an internal letter send to StarTimes South Africa staff on 10 September, StarTimes South Africa CEO Mike Dearham says that "difficult economic circumstances being experienced in the broadcasting industry have had an adverse effect on the operations of StarTimes".

"This has resulted I some increased pressure on the financial position of the company. Most of the employees are already aware of the situation," according to Mike Dearham.

"This situation has led to a decision being taken by the Board of the company to investigate possible solutions to the predicament the company is facing. Unfortunately, StarTimes cannot carry on indefinitely in this manner and in order to stabilize the financial position of the company, certain measures will have to be taken as soon as possible".

"Various methods to increase revenue and to cut costs have already been considered, but the stage has now been reached where other, more drastic measures have to be considered and which will mean that some positions may be affected."

StarTimes South Africa is going to have a meeting with workers to discuss how many workers in what departments could be retrenched and the timetable and what the severance pay will be.

It's not clear how many StarTimes South Africa workers are affected by the news of possible looming retrenchments.

Times have been tough for sectors of the South African broadcasting and telecommunications industry this year.

Sabido's TV news channel eNCA (DStv 403) for instance gutted and shuttered its entire African news division this year which saw an exodus of on-air talent and executive leave for rivals broadcasters, while several current affairs programmes continue to be cancelled.

Altron is shutting down its disastrous Altech Node video-on-demand (VOD) service at the end of October after a year, and Telkom is shedding thousands of jobs.