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Data costs hold up internet television

By Reuters | Apr 11th 2018 | 2 min read
By Reuters | April 11th 2018
Besides South Africa, internet TV is still in its fledgling stage in most African countries. [Courtesy]

Global entertainment group Naspers is trying to persuade telecom operators in Africa to offer customers unlimited data to help boost the growth of internet television.

The high cost of data in Africa has hampered the uptake of internet TV, even though the number of internet users in the region has grown rapidly.

While Showmax is seeing ‘healthy usage’ in South Africa, the internet TV business elsewhere in the region is at a nascent stage,” said Naspers’ Showmax spokesman Richard Boorman, citing data costs that are among the world’s highest.

“The catalyst will be the provision of uncapped mobile data,” he said in a phone interview on Monday.

The high data costs are limiting customer growth for Showmax, which launched in South Africa in 2015 and has since expanded to 40 countries on the continent.

Internet users

The number of internet users in Africa rose from 15 million in 2005 to 213 million in 2017, according to the United Nation’s International Telecommunication Union. But affordability is still catching up.

Mobile ownership — encompassing both the cost of the phone and data, voice and messaging services — as a share of monthly income is at 11 per cent in Africa, far higher than other regions, according to a 2016 GMSA report, the global mobile operators association.

Nanjira Sambuli, who leads the World Wide Web Foundation’s advocacy efforts to promote digital equality in access to and use of the web, said internet costs were quite prohibitive for unlocking meaningful use of the web in Africa.

The foundation’s definition of affordable internet is 1GB of data not costing more than two per cent of monthly income, which it found only five countries studied met that target.

“1GB costs an average of 18 per cent of monthly income,” Sambuli said. “So you can imagine that prioritising video-on-demand might not be on the list of things to do with limited affordability.”

To bridge this gap Showmax is lobbying telecom companies operating in Africa to start offering unlimited data to users, Boorman said, adding that the company was using data from other regions to make the case.

Showmax’s partnership in Poland with T-mobile, which offers subscribers Showmax content without deducting data from their accounts, shows that the economics of uncapped data can work in other countries, he said.

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