New age telco providers

With telecommunications rapidly evolving, there is a new trend for telecom providers
Africa, Consumers, Digital offer, IROKOtv, MTN Cote d’Ivore, Operators, Telcos, Telecommunications, Telecoms, VAD users, Vodacom South Africa, Packages

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The age on unified communications has been upon us for many years. This statement is very true when it comes to the corporate space, but the single communication platform concept did not extend to African homes until recently.

There is now an emerging trend from telecommunications providers to extend their voice and data services to include other digital terrestrial services such as video-on-demand (VOD) as part of the packages they offer and it has created another sub-sector in the telecoms space with its own revenue potential.

One could correctly state that the traditional telecoms provider is “dying”. A number of telecommunications companies on the continent are starting to include video streaming in their offerings and changing their traditional business models and the way consumers view them as service providers.

Last September, Altech, which together with Bytes Technology Group, forms part of the telecommunications, multi-media and IT division of Altron launched the Node, as a new video-on-demand service.

Altech’s Node is a subscription “push” video-on-demand service and home automation system, which was preceded by the launch of a similar service by South Africa’s Times Media Group called Vidi. They both have similar entertainment offerings.

Like Vidi, Node offers a subscription service which gives users access to TV shows and older movies, while newer movies can be rented for a prescribed fee.

Unlike services such as Netflix and Vidi, Node’s VOD offering does not require a broadband connection to stream the content over. Instead, it uses the same satellite as Africa’s Digital Satellite Television service DStv to push content to a decoder-like set-top box (or “Node”), which is then stored on a 1 terabyte hard drive.

New content is pushed down to the Node on a regular basis, with old shows and movies cycled out as the hard drive fills up. While subscribers watch content from the Node’s hard drive rather than streaming it via the Internet, the Node still requires Internet access to unlock movies or episodes from a series.

This does not appear to require a large amount of data, and the Node does include a built-in 3G modem for users who do not have an Internet connection at home.

The Node also offers web services which includes a web browser and YouTube app. In addition to entertainment services, Altech has also geared the Node be a home automation hub. Accessories include internal and external surveillance cameras, motion sensors, smart plugs, antennas, Wi-Fi boosters, and VoIP phones.

Not to be left behind, Africa’s mobile telecoms network providers have also stepped up to the VOD plate with offerings of their own, some in the pipeline and others already available to market.

MTN, one of the leading mobile telecommunications networks on the continent recently launched FrontRow its VOD service that has the capability to stream high bandwidth video content onto multiple mobile devices.

FrontRow is a network agnostic service that offers all subscribers access to thousands of movies and television series on up to five different devices (one device at a time).

Customers who have subscribed to MTN FrontRow Club can view content via their browser on the MTN website, or through their iOS or Android mobile devices.

Larry Annetts, chief marketing officer for MTN South Africa said: “With FrontRow, subscribers can link up to five different devices which ensures that streaming and viewing of content is not restricted to one device. FrontRow has compelling material as it sources content from six studios.”

He said that the substantial investment that MTN has made over the years in improving and optimising its network is paying off. “Value added services such as VOD require high performing networks to operate optimally. We are proud of the strides we have made to ensure that we provide our customers with the platform that enables them to optimally enjoy our products and solutions by providing them with technology that gives them a seamless and enhanced lifestyle experience.

“Another key differentiator is our competitive subscription pricing which comes inclusive with 10GB of data bundles. MTN has introduced special data streaming bundles to ensure that its customers can top up data at affordable rates when they have run out,” Annetts added.

He commented that FrontRow also leverages the ubiquity of mobile devices by giving subscribers the opportunity to stream and consume content whenever and wherever they are, unrestricted by broadcast schedules. “Consumers consume content anywhere and everywhere and therefore they demand access to content on their devices. At MTN we believe that this transformative evolution will redefine the world of broadcast and will give customers a world of options over and above what is currently available.”

One of MTN’s biggest competitors on the continent, Vodacom says it aims to launch a VOD service in South Africa this year, with its strategy closely aligned to its parent company, Vodafone.

Vodacom South Africa CEO, Shameel Joosub said that although the margins from VOD will initially not be great, the company will however get revenues from the data growth as well as from the content itself. The knock-on effect it can have in data growth is very large.

Meanwhile, Vodafone subsidiaries in Europe including Ono in Spain and Vodafone Deutschland are already seeing good returns from offering subscription to Netflix.

Although these services come with great excitement and promise, they have been met with some level of skepticism from industry analysts such research company Balancing Act CEO Russell Southwood who noted that local VOD providers will be hindered by lack of adequate content to compete with traditional satellite service providers and data costs for the consumer.

However, Annetts commented that MTN has circumvented this issue by structuring data bundles to download this content at subsidised prices.

South Africa’s leading fixed-line operator Telkom has also expressed its interest to offer VOD by extending an invitation to industry to bid for the provisioning of VOD this year. At the same time, in January, Netflix also confirmed that South Africa forms part of its international expansion plans, which it aims to complete by the end of 2016.

Meanwhile, on the east side of the continent, online television startup iROKOtv opened up its doors to Rwanda, Kenya, Tanzania and Uganda. The move came as part of the company’s transition to focus more on the local African audiences as opposed to its diaspora.

Originally based in UK and Nigeria, founder of iROKOtv Jason Njoku explained that there is massive market potential in East Africa adding that the active payment penetration as well as the Internet data are significantly cheaper than in other markets.

“Payment isn’t an issue in East Africa. Data is significantly cheaper. For Internet TV, these are the basic building blocks required to build a sizeable subscriber base. GOtv went from 2 000 subscribers in March 2012 to 817 000 in March 2014,” said Njoku.

iROKOtv was launched in 2011 and has raised in excess of $21m so far, the company is often referred to as the Netflix of Africa and considered one of the most well-funded tech companies on the continent.

According to the company, this move is in aid of increasing its popularity on the continent by attracting a bigger African audience. So far, iROKOtv has been extremely popular with the African diaspora with 50% of its viewers in the UK and the US.

In West Africa, MTN Côte d'Ivoire recently announced a strategic partnership with SUMMVIEW, which enables the launch of a new service called MTN TV accessible on mobile.

This enables MTN Côte d'Ivoire to allow its users the ability to access from their smartphones and tablets, a set of live TV channels as well as on-demand content.

The availability of video on smartphones and tablets relies on the platform developed by SUMMVIEW. With a few clicks, users access from the terminal, a catalog of live channels and on demand videos.

"With MTN TV, MTN Côte d'Ivoire has expanded its range of services and mobile applications and provides its subscribers an innovative offering of quality content, information as well as entertainment on mobile. The one-stop shop offer of SUMMVIEW allowed mastering the costs and securing the roll-out. By deploying this new service, MTN continues its actions to offer its customers a new digital world and contributes to the emergence of a digital Ivory Coast,” said Wim Vanhelleputte, MTN Côte d'Ivoire CEO.

Denis Pagnac, SUMMVIEW CEO commented that the SUMMVIEW Content Delivery Solution (S-CDS), a SaaS platform proposed in white label, is designed to meet the specific needs of each client, allowing MTN CI to propose its own mobile video service benefiting from the expertise of SUMMVIEW in the field of the distribution of video content on mobile phone.

With the VOD technology developers white-labelling their offerings, this is also creating a great revenue opportunities for resellers on the continent to re-package and resell solutions to end-users or service providers.

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