TOP STORY:GTV closes shop amidst the global financial crisis

Rwanda’s PSF calls for client’s compensation Gateway Broadcast Services (GBS), the fledgling broadcaster that threatened to challenge the dominance of Multichoice in the African market, has closed its operations blaming economic conditions.

Rwanda’s PSF calls for client’s compensation

Gateway Broadcast Services (GBS), the fledgling broadcaster that threatened to challenge the dominance of Multichoice in the African market, has closed its operations blaming economic conditions.

In a statement released over the weekend GBS the company that operates the GTV brand, said that the current financial and global crisis had “severely interrupted the company’s abilities to secure further funding”.

“We have tried every possible step to keep the company going but we are all unfortunate victims of the current global economic crisis,” the statement read.

Subscribers to GTV received the briefest of on-air warnings that the service was about to close.

Back home in Kigali Faustine Mbundu, the Vice President of the Private Sector Federation (PSF) said the impromptu closure was unfortunate for Rwandans who relied on the Pay TV for the English Premiership soccer games.

“It was not a problem with the Rwandan office and we have now to look at the subscription agreement to establish whether the subscribers will be protected with compensation,” Mbundu said.

GTV’s Steven Kinuka who oversees operations in Kigali told Business Times, that it was quite early to talk about compensation for Rwanda’s subscribers because of the fact that the termination is not at the Kigali level.

”It is a general problem and we are also waiting for communication from the head office in the UK,” Kinuka said.

“True that the owner of the franchise had invested a lot of money and the loss is eminent. No one anticipated the cessation of the business which had become a potential competitor not only in the region but the world in general,” he added.

GTV launched in 2007 broadcasting from the Eutelsat W3 satellite, up linked from Arqiva’s Chalfont Grove facility into 12 French-speaking countries including the Democratic Republic of Congo (DRC), Cameroon and Cote d’Ivoire.

GBS has supplied GTV service to subscribers across Africa including Rwanda, for the last two years. The company had created jobs and competition in the 22 markets.

The economic crisis that has emerged globally over the last few months has caused excessive demands on the business. 

An aggressive pricing policy, and PR campaign, had led Multichoice the only competitor, to reposition itself with new low cost packages.

GTV said it had invested $200 million into the business, only last September raising a further $35 million.

Much of the investment went into football with a $500,000 contract with Uganda’s Federation for Uganda Football Association (FUFA), a sponsorship package for the East and Central African tournament, the CECAFA Cup, and domestic leagues in Ghana, Tanzania and Uganda.

GTV had also secured the coverage of the English Premier League for all it’s viewership.

According to press statements last month Scandinavian media group Kinnevik pulled out of the platform, selling its stake for $23.6 million, a return 1.8 times the amount invested in May 2007.

Although the company didn’t indicate what it would do with its assets, newswire reports said GTV had in fact sold to Canal Plus, a subsidiary of the French media behemoth, Vivendi for $23.6 million.

The coming of GTV to Rwanda broke the monopoly that had been enjoyed by DSTV for years and also forced DSTV to cut drastically on their pricing and increase on the channels.

The GTV liquidation statement also said that, “We realise the negative impact this has had on our loyal customers, creditors and staff, all of who have believed in GTV and the revolution in pay TV it had created.”

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