This could be one of the most frustrating moments for Zimbabwean richest man, Strive Masiyiwa’s Mauritius incorporated Econet Media Limited. The media company popular for its Kwese TV has come to the end of the road. The satellite broadcast company has put up for sale its shares in 13 countries, mostly African, after going insolvent, having reportedly racked up millions of dollars in liabilities.
“Offers are invited for the purchase of the company’s shares held in the above mentioned subsidiaries/associates or the business activities,” Econet Media said in an invitation to tender.
Here Is All You Need To Know
- The company said in a statement it was selling its shares in Econet Media or Kwese TV in South Africa, Botswana, Nigeria, Ghana, Dubai, Kenya, Malawi, Lesotho, Rwanda, Tanzania, Uganda, Zambia and Mauritius.
- The Mauritius-headquartered group, which mainly traded under the brands Kwese TV or Econet Media, is also selling its interest in free-to-air television and digital distribution of media content.
- Econet Media, a unit of Econet Wireless International, which operated as Kwese TV in Zimbabwe, but closed after finding the going tough, had racked up over US$130 million in external liabilities before being placed under voluntary administration after failing to pay suppliers.
- The business, controlled by the South Africa-based Zimbabwean businessman, then hired Ernst and Young’s Paul Gerald Lincoln, a licensed insolvency practitioner, in an effort to salvage the business.
- Kwesé was launched by Econet Media — which is owned by Zimbabwe’s richest man Strive Masiyiwa in 2015 and offers sports and entertainment services across a dozen African countries. It also offered a Roku-based VoD streaming service, Kwesé Play which was launched in 2017
Reasons For Closing Down
Group CEO Econet Media Douglas Mboweni blamed Zimbabwe’s economic downturn along with problems caused by the country’s decision to switch from a multi-currency system to a local currency that led to soaring inflation.
“We regret to announce the discontinuation of Kwesé TV Satellite Service with effect from 5 August,” Mboweni said in a statement on Sunday.
“The third-party content providers on whose content we rely require payment in foreign currency,” he added. “With the prevailing economic conditions in Zimbabwe, and the current business operating environment — characterised by an acute shortage of foreign currency — sustaining Kwesé and Kwesé Satellite Service was no longer viable.”
Bottom Line
Nothing remains to be said than that government policies kill businesses faster than any other factors.
Recall that international and regional currencies such as the rand, US Dollar, Botswana Pula, and British Pound were recently made acceptable in Zimbabwe as legal tender. Zimbabwean government, thereafter, went on to gazette mandatory and sole usage of the Zimbabwe Dollar for all local transactions.
However, government policies, alone, are not to blame. In November, 2018, Econet Media announced a major review of its business strategy and service offerings, to align them with the changes in the global digital and satellite broadcasting sector, and growth in access to mobile and fixed broadband on the continent.
The strategy review will see Africa’s leading multiplatform broadcast network focusing on three core services; Kwesé Free Sports (KFS), Kwesé iflix and Kwesé Play. KFS is Africa’s largest free-to-air TV service, Kwesé iflix is Africa’s leading mobile video-on-demand sports and entertainment platform while Kwesé Play is a leading-edge video streaming service with more than 200 sports, entertainment, kids and news channels including Red Bull TV, NBA, YouTube, TED and Bloomberg, the company said.
With increased focus on these three services, Econet Media will streamline its direct-to-home satellite television service. This will see the reduction of third-party channels available on the bouquet, as well as the removal of Kwesé branded sports (excluding KFS) and general entertainment channels. The broadcaster’s new bouquet will carry FTA, religious, and free news channels which will be available to viewers for a minimal fee, as the broadcaster will waive monthly subscription fees. Kwesé subscribers who have already paid their subscriptions for the month of November, or in advance, will receive a full refund.
It does however appear that these strategies did not work and that government policies were the final straws that broke the camel’s back.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.