Telkom will have an agreement in place with a preferred video-on-demand (VOD) provider by early in the new year, according to group CEO Sipho Maseko.
“We are making good progress,” he said in an interview with TechCentral on Monday.
“We are still talking to different people around it and we are at a sensitive stage of discussions as well … [and] so we want to be respectful to the people we are talking to,” he said, declining to say which parties Telkom is engaging with.
The company has been keen to launch VOD and Internet protocol television services for several years, but has made slow progress with its plans.
And it’s not only Telkom that has apparently not been in any rush to launch a VOD service: the only big telecommunications operator in South Africa to have come to market with a VOD solution has been MTN, with FrontRow. That now looks set to change.
Maseko’s remarks come a week after Vodacom CEO Shameel Joosub said his company was looking to launch its own VOD platform sometime in the first half of next year, suggesting the intensity of competition for subscribers is set to increase dramatically.
The Vodacom boss said the operator is in talks with Netflix and other local and international VOD players with a view to them utilising the company’s billing infrastructure to provide consumers with flat-rate access to movies, series and other content.
At the same time, Vodacom is readying a comprehensive VOD offering of its own. It hasn’t come up with a name for the service yet, Joosub said, but the company will take time to ensure it has the right content to attract subscribers.
Operators are keen to avoid becoming “dumb pipes”, simple conduits over which third-party application and content providers profit. Most see value-added services as an important component of their offerings and a way of ensuring profit margins remain buoyant even as margins for basic connectivity come under increasing pressure.
However, the South African market is already served by a number of Internet-based streaming video providers, among them Times Media Group’s Vidi, Naspers’s ShowMax and PCCW Global’s ONTAPtv.com.
And it’s not easy going for these players. Times Media parent Tiso Blackstar Group in October admitted that Vidi had been “struggling to gain traction in the market”.
In notes alongside its financial results for the six months ended 30 June 2015, Tiso Blackstar said Vidi management was “working hard at re-engineering the business in light of weak market penetration and the slow pace of meaningful broadband growth in South Africa”. It did not say how many subscribers it had signed up.
Tiso Blackstar CEO Andrew Bonamour was quoted in the Times Media-owned newspaper Business Day as saying that the company would “exit [Vidi] over the next 12 months”.
The decision comes as Netflix, the world’s biggest VOD service provider, said it intends launching services in 200 markets around the world by the end of next year, with South Africa included in its roll-out map. – © 2015 NewsCentral Media
