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Issue Date: June 2007

Gateway subsidiary raises $40 million for pan-African pay-TV service

7 June 2007

Gateway Broadcast Services, an unrestricted subsidiary of Gateway Telecommunications, has raised an additional $40 million to finance the roll out of its new pan African pay-TV service, GTV.
GTV will be Africa’s first widely accessible pay-TV service, providing a choice of television programming at a subscription. The service will address the growing popularity of European football in Africa and will include exclusive live broadcasts of 80% of the UK’s Barclays’ Premiership football games to 48 sub-Saharan African countries. The service will be available across the continent but will launch initially in East Africa later this month.
The additional $40 million was invested directly into the Gateway Broadcast Services, a separately managed subsidiary of Gateway Telecommunications, a leading provider of pan-African communications services. This is the third significant fund raising programme completed by Gateway Telecommunications in the last seven months.
The Group raised $115 million from the European high yield bond market in November 2006 and a further $32,5 million in May 2007 to finance the acquisition of GS Telecom, a leading African provider of data connectivity services to corporate customers and telecommunications operators.
Among the new group of investors in Gateway Broadcast Services is Kinnevik, the Swedish investment company. Over half of Kinnevik’s investments are in companies successfully pioneering telecoms and media services in emerging markets. The company supported the growth of pay TV in Eastern Europe and is also a major shareholder in Millicom International Cellular, a successful emerging markets mobile telephony company with significant presence on the African continent. The total value of Kinnevik’s investments is $8 billion. Additionally, the new strategic investors included Citigroup, Noonday Global Management and Avenue Investment Management.
Africa represents the least penetrated pay-TV region in the world with less than 1% of television-owning households in sub-Saharan Africa currently subscribing to pay-TV services, compared to 15% in Eastern Europe, 36% in Western Europe and 93% in North America, However, with over 46 million TV sets and growing at well over 10% per annum, Africa represents a large and rapidly growing market for subscription television which Gateway’s own independently commissioned research estimates will grow to over $3bn by 2015.
GTV will comprise a wide range of sport, movies, popular series, music, education and religious content. The service will carry both major international channels as well as a number of in-house channels, including 'G Prime', a general entertainment and movie channel, and 'G Sports 1' and 'G Sports 2'. The latter will focus on live sports events, including the major European football leagues. The service will also focus heavily on promoting African content.


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