Johannesburg - Deezer, the main global competitor of music-streaming service Spotify, agreed to a partnership with Vodacom as it seeks to expand in Africa faster than its rival, a person familiar with the matter said.
Vodacom, a unit of Newbury, England-based Vodafone, will offer wireless customers access to the service in a year-long exclusivity deal, said the person, who asked not to be identified because the agreement hasn’t been announced yet.
Conor Maples, a spokesman for Paris-based Deezer, said he isn’t able to comment.
Vodacom declined to comment.
The deal gives closely held Deezer access to more than 32 million Vodacom customers in South Africa, a boon to the Paris-based company as it competes with streaming services such as Spotify and Pandora Media.
Sweden’s Spotify, which had been in talks with Vodacom, and Pandora of the US have yet to announce any significant presence in Africa.
Deezer, which can already be accessed in South Africa, will compete against Spinlet and London-based Rara Media Group in Africa’s second-largest economy.
The company also has users in other parts of the continent, including Nigeria, Kenya and Egypt.
Broadband Speeds
In a market with below-average broadband speeds, South Africans spent 90 million rand on digital music in 2012, about 7.3 percent of the country’s recorded-music market, according to a report by PricewaterhouseCoopers.
While the figure is set to rise to 132 million rand by 2017, or 14 percent of the market, that’s still a fraction of what Americans and western Europeans pay to download songs.
Phone companies in Africa are seeking to boost data usage with music and movie downloads as sales from traditional voice revenue decline.
MTN Group, the continent’s largest wireless operator and Vodacom’s biggest competitor in South Africa, is offering its subscribers access to music-streaming service Simfy Africa.
Vodacom shares gained 1.4 percent to 130.29 rand as of 1:54 p.m. in Johannesburg.
The stock has declined 2.1 percent this year, compared with a 13 percent increase at MTN.
French company Odyssey Music Group is Deezer’s controlling shareholder while a $130 million investment by billionaire Len Blavatnik in 2012 helped fuel a push into markets including Brazil, Africa and the Middle East.
The company also has a deal to supply Vodafone’s 32 million wireless customers in Germany.
Vodacom had 32.5 million active customers in South Africa as of end June, while Deezer has 5 million paying users around the world and a further 16 million active users a month who listen for free through ad-supported services, according to its website.
Oakland, California-based Pandora is only available in the US, Australia and New Zealand. - Bloomberg News