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Analysts Predict Uncertain Times For MultiChoice Following JSE Listing Announcement

The internet giant Naspers announced this week that its video entertainment business MultiChoice Group would list on the Johannesburg Stock Exchange (JSE) on 27 February.

Last year, Naspers had said that it was planning to list MultiChoice separately on the JSE and at the same time unbundle the shares in the business to its shareholders.
This is happening as the pay-TV operator is facing competition from the like of Netflix and other over-the-top (OTT) providers.

Industry analysts have speculated that perhaps Naspers no longer needs money from MultiChoice, which has admitted to facing multiple risks and uncertainties in its business.

Independent ICT analyst Charley Lewis points out that Naspers will put a positive spin on what it is doing, and that the listing might provide great value for investors, and also offer MultiChoice greater swiftness to respond to the challenges of the local market, including entering directly as DStv into the streaming market itself.
According to Lewis, MultiChoice is under immense pressure on a number of fronts in SA. He speculates that the increase in FTTH [fibre-to-the-home] penetration is making major inroads into the DStv market.

Lewis also notes that Netflix's subscriber numbers in South Africa are reportedly booming at an estimated half a million, and enabling to Netflix now commissioning its own local content in the country.

In its pre-listing statement this week, MultiChoice highlighted several risks that it is currently facing as a business.
The company said that it now competes directly with the other video entertainment licensees and services including private and state-owned free-to-air broadcast networks and international OTT services for content, customers, advertising revenue and audience share.

The group also mentioned that it competes with mobile network operators, motion picture theatres, entertainment and gaming and other leisure activities for general leisure spending.

MultiChoice said that it is also concerned by the rapid rate of technological change and the adoption of new technologies currently affecting the video entertainment sector.

Trends, such as the internet, the convergence of television, mobile telephones and other media, have created an unpredictable environment, according to the company.

MultiChoice said that it fears that new technologies or industry standards have the potential to completely replace or offer lower-cost alternatives to products and services that it currently sells.

Credit: This article originated from www.itwebafrica.com

 





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