Sikonathi Mantshantsha
Naspers will expand its pay-TV service to Uganda next week, with a bouquet priced at about $7 (R49) a month, and roll out packages in other African countries to add subscribers in an underserved market.
“The low-price packages are really meant to give someone an opportunity to be a pay-TV subscriber and then hopefully to scale them up to the higher-price packages,” Eben Greyling, the chief executive for pay-TV at Naspers, said on Friday.
“If you look at our current penetration there is certainly much more room to grow.”
Naspers added 977 000 pay-TV subscribers in the year to March, taking its total to 4.9 million across the continent, including 3.5 million in South Africa.
The expansion of the African pay-TV market may be propelled by 221 million consumers who will advance from poverty to earn annual incomes of $1 000 to $5 000 by 2015, according to McKinsey estimates.
Last month Naspers introduced a $7 a month package in Zambia.
Naspers would use the low-priced package of 20 channels, including access to the Big Brother show and Africa Magic and Africa Magic+ film and music channels, to gain a mass market for pay-TV, Greyling said.
He said that among the channels were news stations including BBC World, CNN and Al Jazeera, as well as entertainment and religious channels.
“Our aim is to reduce the barriers to entry for customers and we may even subsidise the price of decoders.” Subscription prices would differ from country to country, but would be about $7 a month, he added.
Greyling said that the price of decoders would probably be about $50 or less. He declined to give budget details and subscriber targets.
In South Africa, Naspers has been offering an entry-level package for more than two years that costs R20 a month. Its pay-TV operations include MultiChoice and the Supersport sports channels. The price of Naspers decoders is R599, with installation costs included.
Telkom, On Digital Media, E-Sat and Walking on Water each won a licence in 2007 to operate pay-TV stations in South Africa, ending Naspers’s 12-year monopoly.
Only On Digital Media’s Top TV has rolled out services, and the cheapest package is R99 a month, according to its website.
Before Friday, Naspers had climbed 21 percent in the past 12 months, beating the 11 percent gain in the benchmark FTSE/JSE Africa all share index. The stock declined 0.97 percent to close at R366.79 on the JSE on Friday.
The company’s interests include a stake in Tencent Holdings, China’s biggest internet company. Naspers acquired 28.7 percent of Russian internet company Digital Sky Technologies last year, and in Latin America it purchased 68 percent of classifieds business OLX.com.
Greyling said that Naspers’s pay-TV services would target the parts of Africa where English and Portuguese were spoken, and not Francophone nations. “We’re hoping we’ll take the service to the rest of the continent.”
Across its markets, Naspers will use sport to lure users.
Greyling said that in the main markets of Nigeria, Kenya and South Africa, Supersport was among the largest funders of local soccer leagues and rugby.
Supersport was Africa’s largest sponsor of sport, Naspers chief executive Koos Bekker said in November last year.
In South Africa it owns premiership soccer side Supersport United, which has won the local top league three times.
“We’ll continue to produce as well as sponsor local sport when subscriber numbers make it affordable,” said Greyling.
Pay-TV accounted for R21 billion of Naspers’s sales in the financial year to March, out of total group revenue of R33bn. – Bloomberg