Yesterday, the Competition and Consumer Protection (CCPC) announced that it had granted the Zambian National Broadcasting Corporation (ZNBC) permission to merge with Hantex International, which is controlled by Star Times of China.
According to a CCPC statement signed by Fube, Top Star has been allowed to perform the functions of the public signal distributer while ZNBC shall perform the subscriber management services and content provision services.
“The Competition and Consumer Protection (CCPC) has granted a conditional authorization to the proposed merger between Zambia National Broadcasting Corporation (ZNBC) and Hantex International Corporation Limited (Hantex) which is controlled by Startimes International Holdings Limited (Star times International). This follows an application for the merger of the two entities, to the Competition by Top Star (VJ) on 20th June 2018,” Fube stated.
“In granting of the condition authorization of the merger, the Board of Commissions noted the following; (i) there is no law on digital migration; (ii) Top Star (JV) is amenable to the competition and Consumer Protection Act, the Zambian Government has obtained a loan towards the implementation of the Digital Migration, which loan has to be repaid; (iii) Top Star (JV) created between Zambia National Broadcasting Corporation (ZNBC) and Hantex International Corporation Limited which is currently operational.”
Fube further stated that the splitting of functions between Top Star and ZNBC was to prevent dominance.
“Further, in pursuant to the provisions of the Competition and Consumer Protection Act No. 24 of 2010, the Board also made the following directives; (i) that the operational functions of Top Star (JV) shall be split into two entities. Top star shall perform the functions of the public signal distributer while ZNBC shall perform the subscriber management services and content provision services. The two entities shall relate on commercial basis at arm’s length; (ii) Top Star in their operations of signal distribution shall ensure that it provides access to entities that require signal distribution services on the same terms as those that would apply for ZNBC and within a reasonable period of time as that accorded to ZNBC. For the avoidance of doubt, the reasonable period shall be a period within which an entity requesting the services of Top Star would be able to operate economically without losing revenue or suffering losses due to delays by Top Star,” Fube stated.
“[The Board also directed that] Top Star shall not abuse theri dominance in the signal distribution market pursuant to section 16 of the Act; Top Star shall ensure that all pricing decisions and tariffs charged to their customers of signal distribution are approved by ZICTA in accordance with Section 47 (3) of the Information and Communication Technology (Amendment) Act of 2010; Top Star should sign service level agreements with all their customers and abide by the provisions of those agreements and notify the said agreements with the commission; that Star Times shall divest all its shareholding to ZNBC or the nominee of the Zambian Government within one year from the date of full loan amortization and all the asserts to ZNBC; and that the commission will monitor the loan repayment.”
And at a media briefing later the same day, Fube clarified that the public broadcaster had not been sold.
“The board sat to make a decision and number one is that ZNBC hasn’t been sold. ZNBC is a statutory body established under Cap 154 of the laws of Zambia and it exists as an independent broadcaster but it’s a public broadcaster. Because of this, we looked at the proposed merger and as a commission we said we are going to give a conditional acceptance to this merger because of the many competition issues that were raised,” Fube said.
He said the decision was made in public interest.
“The first one was that when the signal and the content are controlled by one independent person, in this case the JV Top Star, we realized that there was going to be dominance of position on the market by Top Star. So as a board, we decided to split that the signal and distribution of the signal will be done by the JV Top Star. The content on the other hand will be controlled by ZNBC. This to us also raised public interest or security issues on the basis that ZNBC from inception has already enjoyed this monopoly of controlling as a public broadcaster. Top star cannot be involved in that. We have split that arrangement because we think it is not in the best interest of this nation,” Fube said.
“But what is important to note here is that there will be technological transfer and there will be some infrastructure which will be board out of the JV which will revert to Zambia National Broadcasting Corporation after the loan is repaid [and] not necessarily after 25 years.”
Meanwhile, Fube said it would take 13 years to clear the US$400 million loan.
“In the board decision that we have taken, we have said the 25 years that was given as a lifeline to the JV should not go to 25 years. Why? because we believe from the calculation given to us by our accountants and our auditors and the people who took time to analyze these things that this loan repayment can be given back before the 25 years. And we are saying the moment the loan is repaid, all the assets of the JV must revert to Zambian National Broadcasting Corporation and the corporation must control the signal and the content as intended by the Act. So to clarify the position, nobody is going to go for 25 years and once the loan is repaid, everything that the JV will own will dilute itself back to the corporation,” he said.
And Fube said failure to repay the loan within CCPC’s estimated time would force the institution to take the matter to court.
“As a commission, we want to put it on record that we have taken this decision in the best interest of this country and also to ensure that the content is not diluted nor interfered with by a private company although with the JV arrangement, and also that private televisions in Zambia are not denied content which they want to use. The biggest problem that we are going to have is that although content was going to be controlled by a private company, we cannot be sure what the private company will do with the content but from the competition perspective also, they will deny competitors that content as and when,” said Fube.
“So for us once the money is paid, that agreement (JV) must die. If they want to enter into other arrangements, then they can find other arrangements on different conditions. And this loan from our calculations can be paid not later than 13 years. So if it goes beyond 25 years, we will raise competition issues and that for us is then going to be a matter which we will have to go to court for to defend the sovereignty and the public interest for the Zambian people.”