Embattled Econet announces it will be shutting down its struggling Kwesé TV entirely on Monday 5 August 2019 after owing R1.9 billion to third-party content providers.

The embattled Econet Media has announced that it is shutting down its struggling Kwesé TV entirely on Monday 5 August 2019 after owing more than $130 million (R1.9 billion) in external liabilities to third-party TV content providers and international content suppliers.

The implosion and complete shutdown of Kwesé TV under a barrage of debt explains why its Kwesé Free Sports channel carried on eMedia Investments' Openview free-to-air satellite TV service abruptly went off the air on Sunday a week ago.

Econet Media CEO Joseph Hundah was also forced to abruptly shutter its Kwese Play video streaming service that was housed under its Kwesé TV division.

With Kwesé Play being liquidated, customers in South Africa and across Southern Africa are left with useless Roku streaming devices that will never work again and having paid for a service they're suddenly no longer getting.

The shocking Kwesé TV shutdown is also raising serious questions about the "Kwesé Free TV" TV station that Econet and Kwesé TV wanted to start in South Africa after being granted a commercial free-to-air TV licence by the broadcasting regulator, the Independent Communications Authority of South Africa (Icasa) with Econet Media that holds a 20% stake in this venture.

"How will they broadcast when they have no staff or broadcasting facilities?" South African Kwesé TV staffers are asking who told TVwithThinus that Kwesé TV's South African office in Bryanston, Johannesburg in shutting down.

Econet said in July that its beleaguered pay-TV and TV business struggled to compete with China's StarTimes and MultiChoice's DStv.

Meanwhile current and former South African workers of Econet who are enduring living hell but who were once "promised heaven" if they join Kwesé TV, alleges that they have not been paid, are not getting paid, and are demanding answers about their future and what's going on after a process of retrenchments started as the TV empire of the Zimbabwean billionaire Strive Masiyiwa continues to crumble and implode.

In a statement Econet now says its Kwesé TV's pay-TV service is completely shutting down on 5 August 2019.

"We regret to announce the discontinuation of the Kwesé TV satellite service with effect from 5 August 2019," says Douglas Mboweni, group CEO.

"The service was offered to our customers by our sister company Econet Media. We regret to end this service, which thousands had embraced and welcomed into their homes and offices as a viable, alternative source of news, sport and entertainment."

"The third-party content providers, on whose content we rely, require payment in foreign currency. With the prevailing economic conditions in Zimbabwe, and the current business operating environment – characterized by an acute shortage of foreign currency – sustaining Kwesé and the Kwesé satellite service service was no longer viable."

"Once again we apologise for ending this service and take this opportunity to thank our customers for their valued support," says Douglas Mboweni.


ALSO READ: Living hell after Kwesé implosion: Massive problems, fear, secrecy, non-payment and scared staffers at Econet Kwesé TV in South Africa where workers were once "promised heaven".

Kwesé Play abruptly shuttered as pay-TV subscribers lose access after Econet Media's struggling Kwesé pay-TV business is placed under administration.

Econet's Kwesé has been placed into administration with the African pay-TV operator's Kwesé Play streaming service that abruptly shut down and stopped working, with no word how its growing financial troubles will affect South Africa's just awarded Kwesé Free TV licence that is supposed to be the country's new free-to-air TV channel and in which Econet Media has a 20% stake.

Kwesé CEO Joseph Hundah confirmed to Business Day that its beleaguered pay-TV business that struggled to compete with China's StarTimes and MultiChoice's DStv has been placed under administration and that Econet has appointed Ernst & Young to manage the process.

The Kwesé Play streaming service offered through Roku devices in South African since September 2017 suddenly shut down without any warning to customers on 3 July for users in South Africa and across Southern Africa, simply saying "Econet no longer offers Kwesé Play. For more information contact Econet".

Emailed media enquiries on Thursday to Econet's PRs from TVwithThinus bounced saying their email addresses no longer exist.

On social media Kwesé Play lied to customers, saying that although it was effectively shut down it was "experiencing a challenge on the platform".

Roku in a statement said "Econet is shutting down the Kwesé Play service and is no longer working with Roku".

According to Joseph Hundah Econet, owned by Zimbabwe's richest man, Strive Masiyiwa, will start negotiations with creditors to rescue the Kwesé business.

"The group's inability to exit money out of Zimbabwe has had an impact on the business. No other business in Masiyiwa’s Econet Global group is affected by the administration process," Joseph Hundah told Business Day.

In late-June Zimbabwe abruptly announced that the American dollar, South African rand and other currencies are no longer accepted as legal tender in the country struggling with hyper-inflation and a deteriorating economy.

In March South Africa's broadcasting regulator, the Independent Communications Authority of South Africa (Icasa) awarded the country's first free-to-air TV licence in more than 2 decades to Kwesé Free TV  and a consortium in which Econet Media has a 20% stake.

The consortium consists of Econet Media (20%), Royal Bafokeng (45%) and Mosong Capital (35%). It's not clear what impact placing the Kwesé pay-TV division under administration will have on the Kwesé Free TV plan which is yet to launch and in its proposal told Icasa it would consist out of several Kwesé branded and packaged channels.

In November 2018 the strugglin Kwesé TV abrptly decided to get out of its satellite pay-TV business to concentrate on streaming and delivering free-to-air TV channels.

BREAKING. Kwesé Free TV licensed as South Africa's first new, commercial, free-to-air TV service in 21 years by the broadcasting regulator with a big 5 TV channels plan to compete against the SABC and e.tv.

South African TV viewers will finally get more choice and the country's lethargic free-to-air TV industry massive new competition and content for the first time in 21 years, with South Africa's broadcasting regulator that approved a TV licence for Kwesé Free TV to start 5 freely-available TV channels.

Kwesé Free TV will bring much-needed competition and a new TV destination option besides the SABC and e.tv, after the Independent Communications Authority of South Africa (Icasa) decided to grant it a licence.

This is the first new, individual, commercial free-to-air TV licence awarded since e.tv launched in 1998.

As a new digital terrestrial television (DTT) commercial TV station, Kwesé Free TV was granted capacity to start one high definition (HD) TV channel and another 4 standard definition channels as part of a "multi-channel" service, somewhat similar to what eMedia Investments is doing with its Openview service.

Kwesé Free TV plans to launch a so-called "multi-channel" offering that is dramatic and that could steal viewers away from the struggling SABC and e.tv, with the broadcaster that plans to grab 2.1 million weekly viewers by its first year after launch.

Kwesé Free TV plans to broadcast Kwesé Free Sports as its HD channel, in addition to Kwesé Brave, Kwesé Focus, Kwesé Stories and Kwesé Vibes as 4 SD channels for a bouquet that will span across sports content, general entertainment, lifestyle, music and drama including soaps, telenovelas and talk shows.

Each of the 5 TV channels from Kwesé Free TV will broadcast for 24 hours per day.

Kwesé Free Sports will offer sports programming and new sports competitions and will broadcast soccer, rugby, cricket and athletics, giving viewers more and a better free-to-see sports offering targeting those who don't have access to SuperSport and who are not getting much from the SABC and e.tv in terms of sports coverage and content.

Kwesé Free Sports promises to introduce and highlight new local and community sports such as street basketball, running, skate-boarding, and car races in South Africa. The channel will carry sports bulletins. At launch 10% of programming during prime time will be local.

The Kwesé Brave channel will be dedicated to action, adventure and adrenalin targeting male viewers between 15 and 45. Most of the content on this channel will be from international acquisitions, in particular movies and series. The channel will carry entertainment news. At launch 5% of prime time programming will be local.

Kwesé Focus that could also be branded Kwesé Now, will be a type of documentary channel, providing education and information through entertaining yet "smart content", and cover technology, nature and wildlife, current affairs, history, science and business. At launch 5% of prime time programming will be local.

The Kwesé Stories channel that could also be branded Kwesé Drama, will have telenovelas, talk shows, soaps and reality shows and will promote the diversity of the South African audience. The channel will also carry entertainment news. At launch 5% of prime time programming will be locally sourced or commissioned and will include a drama series, a telenovela, talk shows and daily personality-driven stories.

Kwesé Vibes will be a lifestyle channel targeting predominantly female viewers with programming around food, art and music - a so-called "trendy channel which promotes the diversity of the young generation". This channel will have a balance between international and local content. At launch 5% of prime time programming will be locally sourced or commissioned.

Kwesé Free TV must start within two years meaning that its TV service must launch and be up and running by early-2021.

It would be able to apply for one extension, and will also have the option to apply for a delay due to special circumstances, such as further delays with South Africa's already extremely delayed switch to digital terrestrial television (DTT).

"New technologies are deeply transforming the television broadcasting industry and consumers require content that is appealing to their needs," Adv. Dimakatso Qocha of the Icasa council said when the regulator decided to open applications again.

Icasa said it was necessary to introduce more competition in South Africa's television broadcasting market.

Kwesé Free TV will have to put its own branded DTT set-top box (STB) in the market for South African viewers to get the free signals - a decoder that's able to receive the signals - or piggyback on existing STBs for TV viewers who don't have new TV sets that have built-in digital receivers and tuners.

Out of the four applications, Kwesé Free TV is the only one deemed to have a realistic expectation of actually starting a real commercial TV service that would be able to compete with e.tv and the SABC, with the others applications who were rejected for various reasons.

Icasa rejected the applications of Free to Air TV, as well as Mzwanele Manyi's Infinity Media Networks that used to run the controversial ANN7 and later rebranded Afro Worldview on DStv that was shut down.

Icasa also rejected the application of Tshwaranang Media from Sekunjalo Independent Media (SIM) that is controlled by Iqbal Survé who owns 55% of the Independent Media Group.

Icasa last looked at licensing a new free-to-air commercial TV station for South Africa in 2016 but rejected all 5 applications.

The stakeholder breakdown in Kwesé Free TV is Royal Bafokeng Holdings (through Royal Bafokeng Metix) 45%, Mosong Capital 35% and Econet 20%. The Econet Group already runs a Kwesé pay-TV and video streaming business across several countries in Sub-Saharan Africa with existing infrastructure and content licensing deals.

Kwesé Free TV in response to a media enquiry from TVwithThinus responded with a statement.

"On behalf of its shareholders Royal Bafokeng Metix, Mosong Capital and Econet Media Limited, Kwesé Free TV is proud to have been awarded the FTA broadcasting license in South Africa," says Zolile Ntukwana, the group executive for regulatory affairs for Econet Media.

"The introduction of Kwesé Free TV into the South African market will significantly contribute towards growing the production industry, providing an additional platform to showcase local content as well as create a new avenue for local production houses to tell South African stories."

"The ultimate winner, in the end, is of course the South African viewer who will soon enjoy more choice and access to a wider variety of programming for the entire household to enjoy."

'We also wish to thank Icasa for affording us the opportunity to apply, the thorough process through which applications were handled and of course for awarding us with the licence."

Kwesé Free TV will be different from Econet's Kwesé TV (it's failed satellite pay-TV service that shut down in November 2018), as well as its Kwesé Play Roku and its Kwesé iflix  (subscription video-on-demand services).

Econet and Kwesé already built some experience within the South African TV market through content deals like sub-licensing some of its sports rights - for instance the NBA to community TV channels like SowetoTV and 1KZN - as well as the carriage agreement of Kwesé Free Sports, a TV channel that is carried on eMedia Investments' Openview free-to-air satellite-TV service.

It's also Econet and Kwesé that again sub-licensed international soccer rights with the SABC in August 2018, making the live broadcast of some English Premier League (EPL) matches on SABC3 possible.


Kwese Free TV plans
Kwesé said that by entering the South African market at this point, it can exploit its broadcasting expertise in a market where the audiences are increasingly becoming discerning in their television content choices" and that with the shareholders' "combined knowledge, experience and expertise, will be able to offer a credible and sustainable free-to-air service to the South African audience".

"By way of a free-to-air premium sports channel, broadcast in high definition, after intensive market analysis [we] believe that it will attract a desirable market share in the relevant market. Supplementing this with carefully-selected thematic-based channels, the overall offering will be attractive to all members of any households," Kwesé Free TV says.

"Pay-TV services in South Africa are still by and large not accessible to the average TV viewer, whilst terrestrial free-to-air (FTA) platforms on offer provide a limited range of content. There is, therefore, a definite need for South Africans to have access to a rich base of free quality programming, historically only available on pay-TV platforms."

Kwesé Free TV wants to grab 10% of South Africa's free-to-view TV market, estimated at a total audience of 21 million viewers within its first year of operation - a weekly audience of 2.1 million viewers, driven primarily by the Kwesé Free Sports channel.


Local content and language plans
To make and adhere to the strict local content quotas Kwesé Free TV will initially source TV content from existing suppliers to ensure that it makes launch dates, through licensing and commissioning agreements.

Kwesé Free TV says each of its 5 channels will "progressively produce and commission original content over time to meet the required local content quotas by its second year of operation".

At launch Kwesé Free TV's programming will be 100% English, but it says that over time its intention is to commission programming content in various of the official South African languages besides English, and to meet the required local content quotas by its second year of operation.

Kwesé Free TV says its "committed to the development of local content" but that "this is not possible to achieve over 5 channels at launch. Local content will be increased over time to ensure compliance".


Not a TV licence to print money
The licence to Kwesé Free TV is not one to make money - at least not for the first number of years.

Starting a TV station, especially a free-to-air one is extremely capital intensive - requiring both physical and technological infrastructure besides content costs - both in terms of licensing and creating original TV content, as well as human resources. Also, add signal distribution costs.

For several years after it launched as a startup e.tv that kept sucking up millions from investors, was dogged by reports of imminent collapse and shutdown with the terrestrial TV station that was eventually able to move out of the red but only scraped by for quite a number of years despite luring some top talent at the time from the SABC to help run it.