African pay culture may hamper IPTV growth

"African IPTV operators will face serious challenges because of the lack of desirability of people to pay, as they are already accustomed to getting normal TV for free," Sadiq Malik, BCT Global business development director said this week, speaking at the Africa Media and Broadcasting 2010 Congress in Johannesburg.

"But whoever breaks through this payment barrier will have succeeded in breaking through the IPTV market," Malik pointed out.

Digital explosion imminent

As the African continent prepares to triumphally embrace the broadband revolution, experts are predicting that more internet players and broadcasters are going to enter the market, paving the way to a digital explosion of cheap bandwidth and quality content.

IPTV, which is a technology that delivers TV or video broadcasts over the internet, has been earmarked as one of the services many operators are looking to bring into Africa, where the market is still largely untapped.

BCT Global director of technical operations Rajen Naidoo called IPTV a revolutionary technology and true interactive television. "People can see anything they want to see, at anytime, anywhere and on any device," he explained.

Inhibiting factors to IPTV growth

But, Malik warned operators to be aware of the African existing pay culture, which alongside the high number and quality of free TV channels and the high costs to implement high-speed infrastructure constitute what he called inhibiting factors to IPTV growth.

"There are already hundreds and hundreds of TV channels people out there are getting for free, and any attempt to offer them IPTV as a single shot will deem to fail," he said.

Therefore, he urged operators to start looking for other business models to attract customers to IPTV. "If a customer gets internet, TV and voice in one single package, he or she may play the IPTV game.

"In most markets, operators start very carefully with IPTV deployments," Malik said, adding that with a predicted revenue of approximately €5.3 billion (about R53 billion) in Europe for the year 2010, IPTV will compensate partially the decline in fixed retail revenues.

"Further value added services such as video on demand, gaming and home security, among others, are required when providing IPTV."

Morocco leads in Africa

Two-thirds of the world's IPTV subscribers are in Western Europe and the rest are in Asia, while North America, Eastern Europe, the Middle East and North Africa combined make up only 8% of the world's IPTV population, Connected Planet reports, citing statistics from Dittberner.

Currently, Morocco appears to be the leading country in Africa in terms of IPTV penetration.

Naidoo said: "IPTV is cheaper than most broadcasting services. You get an unlimited amount of channels and cost-wise it gives you internet and voice.

"IPTV signals are 100% digital, so the days of analogue TV are fast becoming a thing of the past. It works on your existing internet connection. Install your set-top box and power it on.

"It doesn't require wires to get its signal. The newest IPTV set-top boxes work on wireless signals and its programs can be stored on servers and are ready to view with the click of a button on your IPTV remote."