South African fixed-line telephone operator Telkom announced the creation of Telkom Media in August 2006, when it also applied for commercial satellite and cable-subscription broadcast licenses from the Independent Communications Authority of South Africa.[1] Shareholders in the company included Telkom, Videovision Entertainment, MSG Afrika Media and WDB Investment Holdings.[2]
In April 2007 the company said it was conducting an internal IPTV trial.[3]
The total investment in startup was to amount to R7-billion, with R3.5-billion due to be sourced from Telkom.[4]
Telkom Media received its licence in September 2007 in a process that included the award of three other new pay-TV licences.[5]
In March 2008 Telkom said it would reduce its funding by R2.2-billion as other investments, such as a mobile wireless network, provided a shorter period for return.[6]
In June 2008 Telkom said it intended to sell its (then 66 percent) stake in Telkom Media. By June it was said to have identified a buyer from among several interested parties[7] and in November 2008 Telkom confirmed that negotiations were at an advanced stage.[8] The interested party was rumoured to be a South African consortium funded out of China.[9]
In March 2009 the interested Chinese party was identified as the Shenzhen Media Group amid reports that negotiations had failed because Telkom sought compensation for its sunk investment in the business.[10]
In late March 2009 Telkom said it had failed to find a buyer and intended closing down the company, having written down a R430-million shareholder loan to it.[11] The total costs of the company were estimated to be R700-million.[12] A shareholder meeting to approve the shut down was due to be held before the end of April 2009.[13]
However, in early May 2009 Telkom announced that it had sold its stake to Shenzhen Media, without immediately releasing further details.[14]