February 24, 2009
Right now, pay-TV in Africa & the Middle East (AME) certainly isn’t one of the region’s most dynamic sectors: Total revenue was only US$4.5bn in 2008, most of which was earned by a handful of DTH operators. But in the near future, we expect not only that the sector will expand rapidly (we’re predicting a 13% CAGR for subscriptions from 2008 to 2013 — the fastest growth rate in the world) but also that many more operators will have a chance to get into the game. In our recent Insider, Pay-TV in Africa & the Middle East, we found that this expansion in the market will result in regional pay-TV revenue almost doubling over the forecast period, reaching $8bn by 2013.
One of the most interesting aspects of this growth is that we expect much of it to come from mobile operators. The trend will follow those established first in the voice sector, and now increasingly in the broadband and even the banking sectors: In one field after another, the limitations of the fixed networks in most of AME has given mobile operators an opportunity to establish mobile networks as the region’s platform of choice. Now that increasing numbers of regulators in AME are offering “universal” licenses, which allow operators to offer services across the whole telecom spectrum, mobile operators will be able to set themselves up in competition with the DTH-based pay-TV incumbents.
Mobile operators’ share of total pay-TV market, 2008-2013
Source: Pyramid Research; South Africa Media Forecast, Q4 2008.
Obstacles won’t disappear overnight, and the lack of an affordable mobile TV offering will continue to slow the sector’s growth in the immediate future. But now that operators such as MTN, Zain and Etisalat have subsidiaries across tens of countries within the region that often share a common language, it will become possible for them to capitalize on their cross-regional presence to make content purchases more cost-effective. We’ve seen some pan-African operators, such as Millicom, expand from mobile services to pay-TV in other geographies covered (such as Central America), and we would expect a similar evolution in Africa as growth in mobile subscribers begins to taper. In South Africa, for example, where DVB-H will be introduced in 2010, we believe that mobile operators will take as much as 10-15% of the pay-TV opportunity in South Africa by 2013 (see Exhibit).
— Dearbhla McHenry, Senior Analyst
Pay-TV in Africa and the Middle East: Early-Stage Market Prepares for Expansion
Telecom Insider published February 2009
This report analyzes the growth potential for pay-TV services in the region, highlighting the main obstacles to pay-TV adoption, and points out the key market developments that would enable more aggressive growth. It looks in detail at three key pay-TV markets and efforts in them to overcome the obstacles: Nigeria, Saudi Arabia and South Africa.
Saudi Arabia’s Pay-TV Market
Regional Perspective published January 2009
With 25m people and total telecom revenue of US$11.5bn, the Saudi telecom market is by far the largest in the Arab world. As competition heats up, both new and existing operators are looking into pay-TV to differentiate themselves from competitors and to increase their total ARPS. This Perspective examines whether basic pay-TV services present an attractive opportunity in Saudi Arabia and operators are likely to find the sector profitable.
Africa and Middle East Fixed Communications Forecasts, Q4 2008
Forecasts published December 2008
Updated on a quarterly basis, our Fixed Communications Forecast products provide a complete picture of wireline voice and data communications in each of 8 Africa and Middle East markets. The Excel output includes five years of historical data and five years of market projections for metrics such as demographics and economic trends, penetration of broadband and narrowband lines, Internet users, business users, voice telephony lines, VoIP, PCs, IPTV and revenue. We believe our Fixed Communications Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets.