Mobile Operators Poised to Tap into OTT Gains in Africa

ADVERTISEMENT

Mobile operators are seen as key drivers for the nascent OTT market in Sub-Saharan Africa, which, while still small, is expected to see considerable gains through 2022.

OTT video revenues are forecast to reach $640 million from 35 countries across the region in 2022, according to Digital TV Research, up from $52 million last year. The Sub-Saharan Africa OTT TV & Video Forecasts report indicates that South Africa will generate about 40 percent of revenues by 2022, followed by Nigeria with 21 percent.

SVOD will remain the primary driver, reaching $475 million—74 percent of revenues—in 2022, followed by download-to-own, AVOD and then rentals. The SVOD base is forecast to hit 10.12 million, with South Africa (2.7 million) and Nigeria (2.64 million) again the largest markets.

“It is very important to stress the power that mobile operators have over the future of Sub-Saharan African OTT TV and video,” said Simon Murray, principal analyst at Digital TV Research. “Although the total will triple from 2016, we only expect 13 million fixed broadband households by 2022. Fixed broadband is clearly not big enough to sustain a viable OTT sector. However, there will be 486 million smartphone users by 2022. The mobile operators know that they are in a powerful position. Not only can they give OTT players access to their extensive subscriber pools, but they can also conduct the billing (thus foregoing the need for SVOD platforms to insist on credit card payments). Most importantly, many mobile operators currently charge high data prices for OTT access—which can add considerable costs to subscribers. However, a distribution deal with a mobile operator can substantially cut these costs.”