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03.02.2009 Business & Finance

How Gateway Broadcasting Services went broke

By myjoyonline

Friday, 30th January marked the end of a revolution. Like most unsuccessful revolutions, this one lasted for only a short while, and was abruptly ended by a much more powerful force, the global credit crunch.

Gateway Broadcast Services Limited, providers of pay-TV service in Africa, GBS is bankrupt. Its service comprised a range of sport, movies, popular series, music, education, and religious content.

The company's pay-TV service addresses the popularity of European football in Africa.

Officials of the party announced late last month that the company could not telecast the live English soccer championship due to the global financial crisis which seems to have affected them badly.

Already, many Ghanaians have threatened to demonstrate against the seizure of service by the pay-TV channel with some threatening court action.

Gateway Broadcast Services is based in London, the United Kingdom.

Gateway Broadcast Services Limited operates as a subsidiary of Gateway Telecommunications Plc.

Julian McIntyre tried to make it as an investment banker, but fell in love with Africa instead. He worked at Deutsche Bank in his early twenties and, in his words, quickly came to hate it, leaving at 25 when “I got my first bonus”.

The Briton, who had developed a great affection for Africa while travelling, hooked up with a friend, Peter Gbedemah, to set up a telecoms business, providing infrastructure to mobile-phone companies south of the Sahara.

Eight years later, Mr McIntyre's company is now GTV, a pan-African pay-TV company. The telecoms business, Gateway Communications, was sold in the summer to Vodacom in South Africa for $700 million (£474.8 million). GTV is what is left - a pay-TV operator aimed at a continent where pay-TV has barely existed, a “test case for African business”, as Mr McIntyre, 33, puts it……….

=> A brief chronological account of the company, as published by Times Online.

The rise of GTV started a Pay-TV revolution in Africa, rekindling interest in Paid TV, as many an average person could now watch their favourite satellite TV programs at low costs. In June 2007 for instance, the company offered a one month's FREE subscription to “all who join the GTV revolution” – enabling access to programming every day in July without paying a cent.

The GTV Pay-TV revolution enjoyed widespread support from the populace, as it provided “premium international programming not just to a few people but to literally thousands of people who have never before been able to access to pay-TV.”

This perhaps led to the suggestions that MultiChoice DSTV's dominance on the continent had finally come to an end, more so when results from a study conducted by Balancing Act- a London-based consultancy and research firm, indicated that;

“consumer demand for GTV and its services has resulted in his company becoming Africa's fastest growing pay-television service.”

The study also reported that GTV took “five out of every seven new subscribers” who chose satellite TV in Africa over the past nine months.
Sadly, this was not to be the case. The GTV revolution, was abruptly ended by a force which attained global enormousness in 2008- as it succumbed to the global economic crisis. The company became the most recent casualty of the global recession.

According to a Press Statement issued by Gateway Broadcast Services- the suppliers of the GTV service to subscribers across Africa;

“The current financial and global crisis has severely interrupted the company's ability to secure further funding for the continued operation of the business.”

“Increased instability in global markets interrupted our ability to secure funding on an acceptable timescale and have left us no choice but to cease operations,”

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

The collapse of the company will no doubt have devastating effects on Pay-TV viewers across the African continent, many of whom relished the new opportunity GTV presented them, in terms of International TV programmes, not to mention staff of the company-

Permanent employees lost their jobs instantly, not to mention the hundreds of dealers and business partners, thousands of subscribers and the tens of thousands of English Premiership viewers who will miss their favourite weekend sit-outs.

This is indeed an unfortunate end for a company whose Africa-wide GTV service had “an estimated 100,000 subscribers across Africa and has over the last two years invested a total of $200 million and created jobs and competition in 22 markets”.

Compiled by Fiifi Koomson
Information from Business Week, D-Tech Technology