Former SABC group CEO Lulama Mokhobo has told the Zondo Commission that the SABC was effectively robbed of potential billions in digital revenue thanks to the support pay-TV giant MultiChoice received in protecting its commercial territory.

Testifying before the State Capture inquiry for the second time, Mokhobo said she had “raised very sharply her discomfort” with the tabling by former COO Hlaudi Motsoeneng and former SABC board chair Ellen Tshabalala of a non-encryption stance as the official position of the SABC.

If the state broadcaster had acted in accordance with government policy on digital migration, the SABC would have been able to provide subscription-based programming via encrypted set-top boxes to South African consumers. But Motsoeneng, in particular, bullied SABC executives into adopting a position against encryption – ensuring that MultiChoice’s dominance of the pay-TV market would remain unchallenged.

Mokhobo said that Motsoeneng and Tshabalala had meetings on the encryption issue which were “held entirely in secret”.

She said: “We were all taken aback when they came with a position which was contrary [to government policy on the matter]”.

The former SABC CEO said that one of the ways in which Motsoeneng exerted pressure on co-workers was by bragging about his powerful connections: “He boasted how he had been at the president’s house till 2am,” she recalled.

Mokhobo told the commission that her view was that given the fact that the SABC commanded 60 to 70% of the total South African viewership, the state broadcaster could have entered the pay-TV sector “very successfully”.

She pointed out that through MultiChoice’s active subscriber base of 7.4 million households, the company enjoyed total revenue of R40.4-billion in 2019, with a “base average” of R342 per month per subscriber.

“MultiChoice without the SABC bouquet running on it would probably not have those kinds of audiences,” Mokhobo suggested.

She proposed that if the SABC used its “vast footprint” to go head to head with MultiChoice, but offered a R40 monthly subscription fee, it could raise annual revenue of R1.9-billion through only four million subscribers.

“Those figures are obviously very, very conservative,” Mokhobo said.

“It didn’t make sense to me when people said, ‘No, [SABC] can’t go into that [pay-TV] space’.”

As things stood, Motsoeneng ensured that the SABC agreed to adopt a non-encryption stance as part of a 2013 agreement with MultiChoice – signed while Mokhobo was on leave – in exchange for the supply of two DSTV channels for R553-million over five years.

In Mokhobo’s view, this was a nonsensical deal given the revenues that could have been generated from the SABC going digital.

Mokhobo’s testimony followed that of former communications minister Yunus Carrim, who told the inquiry on Tuesday that he was particularly horrified to discover that the 2013 deal also gave MultiChoice exclusive access to the SABC’s entire archive. Carrim said that the archive contained priceless historical footage.

The #GuptaLeaks emails have already revealed how MultiChoice paid off the Gupta family and drafted government broadcasting policy for Carrim’s successor as communications minister, Faith Muthambi.

Following Carrim’s Tuesday testimony, MultiChoice’s share price at one point dropped 7.88% from its closing price on Monday.

In a letter to staff, MultiChoice’s CEO, Calvo Mawela, “noted with disappointment the baseless allegations” made by Carrim and Mokhobo.

“We emphatically deny these allegations,” Mawela wrote, adding that MultiChoice “conducts its business in a lawful and ethical manner”.

He urged staff “not to be distracted by the reports on these allegations and any associated commentary, and instead continue to deliver world-class service in order to delight our customers”.

On Wednesday, a spokesperson for Naspers – from which MultiChoice unbundled in 2019 – told IOL that after examining Carrim’s allegations, the company had concluded that it did not have a case to answer at the Zondo Commission because it had not been accused of any illegal behaviour.

“We accordingly notified the commission that Naspers did not intend to exercise its rights to give evidence, to call witnesses or to cross-examine witnesses in response to the notice received from the commission,” Naspers spokesperson Shamiela Letsoalo was quoted as saying.

In his appearance before the Zondo Commission, Carrim acknowledged that the private sector lobbying government for or against policies was “perfectly normal in a democracy”, and standard practice in South Africa.

But, asked Carrim: “The question is where do the boundaries begin and end?”

He described the fact that MultiChoice could contribute to drafting a Cabinet memo on broadcasting policy as “astonishing”.

Carrim suggested that the media giant’s behaviour was an example of “regulatory capture”, which he defined as occurring “where by irregular means you shape government policy”. DM