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Africa & Middle East Telecom Insider / Vol. 2, No 10, Edition 12 - New Market Dynamics Bode Well for Spike in Pay-TV Adoption
Pyramid Research, Inc, Dec 2010, Pages: 16
As operators find ways to circumvent current barriers in AME’s pay-TV market, subscriptions are expected to triple over the next five years, reaching 4 million. This represents an 11 percent CAGR in pay-TV subscriptions through 2015, the highest in the world, according to a new report.
New Market Dynamics Bode Well for Spike in Pay-TV Adoption analyzes the growth potential for pay-TV services in AME, highlighting the main obstacles to pay-TV adoption in the region and pointing out the key market developments that would enable more aggressive growth than Pyramid is currently projecting. The report then looks in detail at pay-TV markets in Nigeria, Saudi Arabia, and South Africa, each representing different stages of pay-TV market development, and at efforts in each market to overcome obstacles.
AME's market dynamics are changing and the picture of pay-TV in the region in the coming years leaves room for optimism. 'Over the next five years, as regulatory changes introduce more competition into the sector and technology platforms advance, Pyramid expects the region to begin to overcome the many obstacles that have inhibited its growth in the past, specifically the high cost and limited reach of pay-TV platforms,' says Mehdi Ben Said, Senior Analyst at Pyramid.
Currently, there are several barriers preventing even greater growth than Pyramid projects. 'These include limited competition, lack of content, and a weak platform on which to provide pay-TV services over existing last-mile infrastructure. The adoption of new alternatives in certain countries is a sign that the market is trying follow new paths for growth,' notes Ben Said. The rise in per-capita GDP will have an immediate and positive impact on the pay-TV market in the region, helped along by the success and pan-regional expansion of the AME's largest mobile operators.
Furthermore, with strong growth in mobile subscriptions, many mobile operators will enter the market through alliances with DTH providers, marking a significant and positive change in the pay-TV landscape. 'The lack of fixed infrastructure and the dominance of mobile access in most African countries constitute a huge opportunity for mobile operators to become the main pay-TV providers in Africa in the long term,' he indicates. 'Although mobile networks in many countries may not be video-ready, Pyramid recommends that mobile operators look carefully at launching packages in conjunction with DTH operators in the near term in order to develop brand recognition in the segment.'
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