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African telcos in OTT push amid stiff competition

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Telco operators in the Sub-Saharan Africa region are upping the ante in offering over-the-top (OTT) services, as competition in the market heats up.

Vodacom, MTN, Airtel, Globacom, Orange and Safaricom are all examples of telecommunication companies deciding to become full players in the video-streaming market in Sub-Saharan Africa, according to a report by market research firm Dataxis.

The telcos’ forays into the OTT market come amid fierce competition from international players, such as Netflix, Prime Video from Amazon, Apple TV and BritBox, among others.

This, as the telecommunication companies are diversifying their revenue from the traditional voice and data services.

Non-telco local players in the OTT space include MultiChoice-owned Showmax.

A recent report by Digital TV Research says the OTT market in Africa is set for an explosion of growth over the coming years, with revenue increasing by well over $1 billion from 2020.

The continent’s collective OTT revenue was only $392 million at the end of 2020, indicating there is significant room for growth in the coming years, says the report.

Capturing growing demand

According to Dataxis, the OTT streaming market in the region continues to grow rapidly, with around 30% more subscribers between 2020 and 2021, and mobile operators are, in turn, offering their own mobile platforms to capture the growing demand.

It notes that Video Play, the third-largest streaming platform in Sub-Saharan Africa in terms of subscribers behind Netflix and Showmax, with a 17% market share, is a service launched by South African mobile operator Vodacom.

In 2021, Dataxis says, mobile operators’ streaming platforms accounted for 26% of OTT and subscription video-on-demand subscribers in Sub-Saharan Africa.

It adds that in May 2021, Kenyan mobile operator Safaricom launched its own mobile streaming website BAZE with local and regional short videos.

In the same year, Nigerian multinational telecoms company Globacom introduced its Glo TV mobile app, offering TV channels and streaming content.

“Indeed, in this region where mobile internet subscriptions are more accessible and affordable than fixed internet, OTT platforms have had to adapt their model to make their content easily consumable on mobile,” says Léa Zouein, analyst at Dataxis.

“In the coming years, OTT video consumption will be driven by the number of mobile internet subscribers, which grew by about 8% between 2020 and 2021, and is expected to grow by another 50% by 2026 to reach just around 709 million,” she adds.

However, the market analyst firm points out that among the hurdles that could still prevent streaming platforms from becoming widely used, unstable internet connections, high prices and lack of payment options are expected to be the most difficult to overcome for content providers.

OTT and SVOD subscribers in Sub-Saharan Africa.
OTT and SVOD subscribers in Sub-Saharan Africa.

“In this sense, mobile operators that have been partners of streaming platforms for many years are now becoming players in their own right by offering all-in-one services, including voice and data phone packages, TV access and streaming content,” notes Zouein.

“Their mobile applications have been designed to adapt to the internet bandwidth available, to consume less data and overall facilitate a flexible use of streaming applications.”

Dataxis adds that the leader in Ivory Coast, Orange Group, offers its TV pass subscribers the opportunity to watch the content offered on its mobile application without being charged for internet data.

Indian operator Airtel also proposes a free mobile TV application, but it is accessible only via the internet data of the Airtel package, it notes.

MTN branches out

The market research firm points out that since 2017, MTN has been increasing the number of offers in several countries in Sub-Saharan Africa through the launch of various mobile applications.

MTN TV Congo, MTN Télé Na Ngai, MTN TV Ivory Coast and MTN TV Zambia are the first four OTT mobile applications launched by the group, offering access to TV channels and streaming content.

At the end of 2021 and beginning of 2022, the company continued its development by launching two new platforms − Y’ello TV Guinea and Y’ello TV Rwanda, named after the brand’s new slogan.

For all these mobile applications, the company offers subscriptions that either provide access to content only, or combine access to content and internet data, Dataxis says.

According to the firm, in addition to offering their own streaming services, mobile operators continue to partner with other streaming platforms to offer customers easy payment methods and enough internet data to view the content offered.

For instance, it says, for several years and in various African countries, MTN has been a partner for multiple streaming platforms, such as Wi-Flix, Showmax and StarNews, and more recently for the KIWI platform launched in early 2022 by the group Cote Ouest Audiovisuel.

Vodafone and Safaricom both work with Wi-Flix. Vodafone also works with StarNews alongside Moov and Orange, and Vodacom is partnered with Netflix, Showmax and Amazon Prime Video, it adds.

“Mobile operators, therefore, continue to aggregate streaming platforms while launching their own services,” Zouein says.

“Thus, with a strong mobile subscriber base in Sub-Saharan Africa, mobile operators’ new strategy focused on streaming and value-added applications should pay off in the long-term, as long as mobile connectivity remains prevalent and mobile operators strengthen their role as gateways for content.”

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