SABC collapse threatens survival of another SOE

The South African Broadcasting Corporation’s (SABC) deteriorating financial health threatens the survival of Sentech, to which the state broadcaster owes over R700 million – more than half of the company’s annual revenue. 

This was revealed by the Deputy Minister of Communications, Philly Mapulane, in a presentation to Parliament’s Portfolio Committee on Communications. 

Mapulane told the committee that the SABC owes Sentech, also housed under the Ministry of Communications, over R700 million, threatening the survival of the state-owned enterprise (SOE). 

Sentech is responsible for providing broadcasting signals to the SABC and other broadcasters with shows on television or radio. 

“We made an appeal to the leadership of the SABC to invest more time and effort in settling this bill or at least paying a portion of this debt,” Mapulane told Newzroom Afrika. 

“If the debt is allowed to grow further, then it is going to have dire consequences for Sentech.”

The stakes are very high, with the existence of both businesses at risk from the non-payment of this bill. 

“If Sentech is unable to operate, the SABC will be off air as well as other broadcasters,” said Mapulane. 

Thus, it is in the interest of both companies to resolve this debt, and the companies’ boards have been instructed by the Minister to engage with each other to find a solution. 

Mapulane said yet another turnaround plan for the SABC will be presented to Minister Mondli Gungubele by the end of November. 

The Deputy Minister said the SABC is severely constrained by the Broadcasting Act of 1999, which set out the company’s revenue model. 

This Act made the SABC heavily reliant on TV licences for funding. It ensured that it could not adapt to changing content consumption and revenue streams in the 21st century. 

“Please, let us not lose sight of the macro environment under which the SABC is operating. It is quite an untenable situation as it is. The SABC needs to be properly funded,” Mapulane said. 

“The TV licence as a mechanism was initially thought to be able to fund the public service mandate of the SABC. It has proven to be unsustainable as more and more people are not paying for their licences.”

The state broadcaster’s TV licence revenue declined from R968 million in 2019 to R741 million in 2023.

The SABC billed R4.5 billion in TV licence fees in the last financial year, but, like in previous years, it collected far less.

This translates into a TV licence evasion rate of 84% as debt collection agencies failed to convince people to pay. It is up from 69% four years ago.

To address this, Mapulane said the department had presented the SABC Bill to Parliament, which outlines new mechanisms for funding and revenue.