OTT in Africa: can mobile operators transform their 550M internet users into streamers?

On August 3 2023, the American streaming platform Disney+ launched a mobile plan in partnership with MTN in Africa, giving access to the entire Mickey Mouse catalog on top of data plans. Internet connectivity remains one of the main obstacles to the full adoption of OTT in Sub-Saharan Africa. By partnering with mobile operators, platforms can offer packages that include both a subscription plan and data at low cost and with a simplified payment method, since everything is reconciled on the mobile bill. While a year ago, Vodacom’s platform Video play appeared to be a great success , its closure at the end of 2022 has called into question the ability of mobile operators to sustain competitive and profitable platforms. Then, how far can telecom operators be involved in the OTT market? The paying OTT market is growing steadily in the region. The number of OTT services subscribers grew by 22% between 2021 and 2022, and is expected to increase by 62% by 2028. And yet, while in 2022, less than 5% of households were connected to fixed broadband and only 1% to fiber, mobile internet had a population penetration rate of about 45%. Not only is mobile internet more accessible, but owning a smartphone is also becoming more common, as shown by the population penetration rates in a range of countries including: South Africa (65,73%) in 2022, Kenya (51%) and Burkina Faso (46%). Mobile operators: direct-to-consumer content providers? Thus, several telecom operators have chosen to launch their own OTT platforms to tackle the connectivity issue faced by streamers while getting hold of the digital video eyeballs. For instance, at the end of 2022, the Nigerian 9mobile launched 9TV. The Kenyan Safaricom launched BAZE in 2021. Although the number of mobile operator’s platforms is multiplying in the region, the number of subscribers hardly follows the same trend. In the first quarter of 2023, only 12% of total paying OTT subscribers chose standalone mobile operator video services. The low market share penetration of telecom operators’ platforms reflect the limits of such projects. The shutdown of Telkom One in November 2020, just after the company announced growth that exceeded expectations, is evidence of the difficulty of penetrating the OTT market, still largely controlled by clear leaders: the American Netflix and the South African Showmax (Multichoice). Mobile operators: distribution partners for OTT platforms? Let’s not forget that content is king and drives subscriptions. But creating the most attractive catalog is very expensive and time-consuming. Many platforms are launched but do not survive the market and its challenges: offering essentially local content, adapting to the different languages spoken and offering the most relevant and accessible subscription plans while still being profitable on the subscription-based...

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