SABC’s massive TV Licence mess in numbers

The SABC has published its full financial report for the 2017/18 financial year, showing the extent to which people have stopped paying their TV licence, costing the public broadcaster billions.

The group has experienced declines in TV Licence revenue over the years, despite more South African households taking ownership of TVs.

In the latest financial year, the group billed R3.378 billion in TV Licences, but only pulled in revenues to the tune of R941 million – a 27.8% compliance level. The SABC points to a sum of R2.43 billion as failing to meet its ‘recognition criteria’ – that is, monies that cannot be recognised and included as revenue.

“At each annual renewal date, a licence holder is billed their prescribed annual licence fee in terms of legislation,” the group said.

“Due to the high levels of fee payment evasion by licence holders, the group assesses the probability of receiving the licence fees on an individual account basis. Where the timing and amount of receipt cannot be reliably measured, and receipt is not considered probable, the revenue is not recognised,” it said.

Further down the report, the SABC lists a figure of R2.125 billion as part of its “doubtful debt allowance” related to TV Licences, meaning there is only about R300 million in fees (the amount not recognised, less the amount identified as doubtful) that it ever expects to conceivably collect.

Earlier this year, the SABC reported that it had about 9 million TV Licence holders on its books, of which only a third were paying. The group is owed over R25 billion in unpaid fees, and has previously written off R4.5 billion tied to over 1 million invalid accounts.

Changes are coming

The broadcaster is fully aware of its TV Licence problem, and in a public broadcasting colloquium document published on Thursday (6 September), SABC board chairperson Bongumusa Makhithini, noted that while TV licence fees still remain the second largest source of revenue for the SABC, the broadcaster needed to rebase the fee and strengthen the collection of this revenue.

This would include greater compliance at the point of sale and with other transactions relating to television sets, and possibly extending reporting obligations to include insurance companies and Pay TV operators.

Aside from hiking the current TV Licence fee, which hasn’t changed since 2013, the group is also looking at expanding the definition of a TV in South Africa.

The proposal is to broaden the net to include all receiving devices and apparatus that are capable of receiving television broadcasts over the broadcasting radio frequency spectrum.

However, this should not be so broad as to include “all” mobile phones and computing devices.

“A broadened definition will require all those entities with reporting obligations to enforce the regulations in relation to a defined type of devices or apparatus,” The SABC said.

Source: Business Tech