While SA's mobile operators will still be able to remain sustainable on voice revenues for some time to come, they will have to embrace the evolution of data and start offering services that amount to far more than them being a pipe to access content.
This is according to analysts and comes as SA's two leading operators move to explore their options in terms of content provision as voice revenues dwindle.
According to a recent Bloomberg report, citing two individuals in the know, MTN is in talks with an Asia-based content provider to offer South Africans access to streaming movies and TV shows. In response to an ITWeb query, MTN neither denied nor confirmed the report, saying it could not comment on any specific deals at this stage. "MTN is always looking to improve the content we can offer our customers."
Vodacom tells ITWeb the company is exploring a number of options in terms of providing content. "We're seeing the move globally for more and more content to be delivered via mobile and we want to make sure we stay on top of this."
Driving data
In October, Phil Patel, chief officer of the consumer business unit at Vodacom, said "things like Spotify and video" were top of mind for the operator.
Africa Analysis analyst Dobek Pater says for the past few years already, operators have been encouraging customers to use more data. "This is the reason for trying to distribute as many handsets as possible into the sub base [and] introducing low-cost smartphones."
But it is video - including live streaming - says Pater, that operators are targeting as the mechanism to increase data consumption. "Video is expected to be the highest contributor to data consumption and consumers are expected to account for some 60% of all data consumption."
World Wide Worx MD Arthur Goldstuck says, however, that SA's operators have not yet begun an active, strategic approach to getting mobile customers to use more data-intensive services, as they are still too focused on traditional services like voice and SMS.
"While data has become a very significant element of their services, and the fastest-rising revenue contributor, it is happening almost by accident. We still don't see a user-oriented, service-directed approach to boosting data consumption."
He notes most operators are exploring various avenues for data exploitation - like Vodacom and MTN's cloud services and IPTV from Telkom - "but there is a vast gulf between saying you want to do something transformative and delivering a service that transforms the market".
At the end of the day, says Goldstuck, streaming services are among the main options open to operators that want to raise revenue from data, but the challenge comes down to a balancing act between reducing rates enough to make it feasible for consumers, while generating enough volume to make it viable for operators.
The other key consideration, notes Vodacom spokesperson Richard Boorman, is network capacity. "There's no point having a content play if you don't have the network to support it."
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