Star TV’s channels are highly likely to be withdrawn from Indonesia in the second week of December following a bitter clash between Rupert Murdoch’s satcaster and the country’s sole direct-to-home operator, Indovision.
Sources say Star has given Indovision 30 working days’ notice of its intention to terminate its management and programming agreement, which began in 1996.
The relationship has soured in recent months amid claims that the Star-appointed execs at Indovision were given little say in how the struggling feevee service should be run, and reports that Indovision has defaulted on payments owed to Star for some months.
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Another major cause of the rift is the Cakrawarta satellite launched by PT Datakom Asia, a holding company that owns 91% of Indovision. Datakom raised $250 million in U.S. bonds — including $10 million from billionaire George Soros — to fund the bird. Star TV execs reportedly have urged Indovision to ditch the satellite, which they believe has at least two flawed transponders and other technical glitches; this means its signal would be blacked out for about 20 minutes each day, but Indovision is wedded to it. Both Star and Indovision declined comment.
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Switching birds
If Star pulls the plug, as it’s threatening, complications loom for both parties. Indovision would have to move to another satellite and seek new channels to replace Star’s or run the risk of losing subscribers and lowering its fees. The problem with switching birds is that Indovision’s 27,000 DBS subscribers have their dishes pointing to the Palapa sat, so they would have to be re-oriented and given new decoders at considerable cost. An additional 12,000 homes get Indovision’s channels via cable.
Also, Indovision may have to look for alternative uplink facilities for all of its channels that are currently uplinked out of Star’s facility in Hong Kong.
For Star, the big problem would be how to reposition itself in Indonesia, where Indovision president-commissioner Peter Gontha wields enormous clout politically and with business groups.
Star reportedly issued its termination to quit Oct. 26 at a tense meeting between Gontha and Star CEO Gary Davey.