New platforms and emerging rivalry in the region’s pay-tv markets

Tatenda Zengeni

The pay-tv market in Africa has experienced growth in subscription revenue over the past few years largely accruing to a few large players. 1 However, there appears to be emerging competitive rivalry from non-traditional operators in this market which could introduce greater competition in the medium- to long-term. For example, Safaricom in Kenya launched its own internet TV service in 2015, MTN launched MTN TV in Nigeria in 2016 2 and more recently Econet Wireless in Zimbabwe launched Kwese TV in 2016. New entrants are using different platforms to challenge often dominant firms in traditional pay-tv, some of which have been alleged to have abused their positions of market power in the past. For example, Multichoice has been challenged regarding the use of exclusive contracts in the broadcasting of sport content. 3 More recently beIN Sports in Egypt was also shown to have violated competition law in Egypt’s pay-tv market. 4 The company was found to have forced subscribers to take up new subscription plans that limit their ability to choose the most appropriate channels or packages for them. 5 This article builds on those published in previous Reviews to assess the current developments in this market and the competition concerns that arise. 6 Since its launch in 2016, Econet’s Kwese TV acquired free to air exclusive rights to broadcast the English Premiership in fifty African countries for three seasons starting from the 2016/17 season. 7 This has occurred despite Multichoice having exclusive rights to broadcast English Premiership content in the continent. 8 The two agreements differ in that Kwese TV’s rights allow it to broadcast only one live match per week in fifty African countries, while Multichoice has rights to broadcast all live matches throughout the continent. 9 Kwese TV’s deal further allows them to sub-licence the English Premiership rights to other public broadcasters in the continent, thereby creating an opportunity for other players to provide content using their network. 10 Econet has also acquired exclusive rights to broadcast other content for the National Basketball Association (NBA), Extreme Fighting Championship (EFC) and most recently the National Football League (NFL). 11 Recently Multichoice announced that it will reduce its prices from the 1st of November 2016 and will also add more TV channels to lower-tiered bouquets in several countries including Botswana, Kenya, Tanzania, Ghana, Uganda, and Zimbabwe. 12 The price decrease follows a decline in profits from its video entertainment business in 2016 arising from a high cost of content due to increased competition to buy content for sale to viewers and weakening of many African countries’ currencies. 13 The decrease prices may thus reflect a combination of changes in other factors including local country dynamics in terms of ability to pay for pay-tv, or increased competitive pressures on the multinational player.

The entry of Mobile Network Operators (MNOs) into the pay-tv market comes at a time when subscribers in the region are increasingly taking up mobile broadband services, driven by network rollouts and mobile operator device and data strategies. 14 GSMA estimates that mobile broadband connections in Africa will almost triple over the next five years. 15 Strong growth in mobile data traffic is evidenced across the continent. For example, MTN Cameroon reported a 62% increase in data traffic in 2015, while MTN Nigeria and Vodafone Egypt recorded data traffic increases of 59% and 73% respectively in the first quarter of 2016. 16 As a result, data revenue as a share of total revenue of MNOs is rising rapidly across the region, reaching 15% on average and considerably higher for mobile operators in the more advanced markets such as South Africa and Egypt. 17 This is likely to create incentives for mobile operators to increase investments in new-er internet-based services such as pay-tv.

As MNOs seek to increase their revenue from data services we can expect new entrants in the pay-tv space, particularly from established operators in adjacent industries. There is of course a question as to whether mobile-based viewing can serve as an effective substitute for ‘traditional’ pay-tv, or if these services are complementary to those of the incumbent pay-tv providers.

Furthermore, there are potential competition concerns that arise from these developments. If high-value content is exclusively acquired by a dominant MNO, as in the case of Kenya and Zimbabwe where Safaricom and Econet have 65.2% 18 and 51.6% 19 market share, respectively, it can be leveraged to establish a position of market power in adjacent markets. 20 Customers are likely to find it attractive to switch to networks that provide a wide range of services, particularly broadcasting services that are competitively priced relative to pay-tv.

As this market develops further in the continent we expect that the degree of competitive overlap between pay-tv providers and MNOs to provide viewing content will intensify. This will be aided by the fact that MNOs such as Safaricom are continuously broadening their product offering to their sub-scribers to include even more services, such as ‘the big box’ decoder which is to include Wi-Fi hot spots and radio chan-nels among others. 21 Convergence in the provision of various services is likely to become an important consideration for competition authorities in defining relevant competition markets due to the over-lap of markets and services that has been created. Furthermore, as network operators extended their reach into sub-licensing of content provision as in the case of Kwese TV, there is a likelihood of the firms leveraging their existing market power into these markets, rather than enabling ‘wholesale’ access to different potential service providers.


1. WIPO (2015). ‘Current market and technology trends in the broadcasting sector’.
2. Ubabukoh, O. ‘MTN launches N59bn TV service’ (26 May 2016). The Punch.
3. Paelo, A. and Mondliwa, P. ‘Exclusive agreements in the pay-tv market’ (November 2014). CCRED Quarterly Competition Review.
4. Fakhry, A. M. ‘beIN Sports breaks competition protection, monopolistic practices law: ECA’ (07 September 2016). Egypt Daily News.
5. See note 4.
6. See Paelo, A. and Mondliwa, P. ‘Exclusive agreements in the pay-tv market’ (November 2014). CCRED Quarterly Competi-tion Review; and, Zengeni, T. and Robb, G. ‘Emerging competition dynamics in regional pay-tv markets’ (August 2015). CCRED Quarterly Review.
7. Sports reporter. ‘Econet clinches EPL deal’ (24 March 2016). Zimbabwe Independent.
8. See note 3.
9. Jefwa, B. ‘Does Econet’s acquisition of Premier League free-to-air rights in Africa affect DSTv?’ (23 March 2016). CIO East Africa.
10. See note 7.
11. Kwese website.
12. Ferreira, T. ‘DStv: We've got some good news and some bad news’ (19 October 2016). Channel24.
13. Naspers. ‘Summarised consolidated financial results 2016’.
14. GSMA (2016). ’The mobile economy Africa’.
15. See note 14.
16. See note 14.
17. See note 14.
18. Competition Authority of Kenya (CAK). Quarterly Sector Statistics report, Fourth quarter for financial year 2015-2016.
19. POTRAZ. Postal and Telecommunications Sector Performance Report, Second Quarter 2016.
20. Oxera (2015). ‘Competition policy and regulation in converging telecoms and media markets: how can they work together?’.
21. Safaricom website.