South Africa: Wireless broadband providers starting to offer VOD services

Technology & Convergence

Wireless broadband providers in South Africa are offering video on demand (VOD) services with zero rated bandwidth charges.In November Internet Service Provider (ISP) Axxess launched their DSL Digital Delivery of Media, offering subscribers a service to download and watch movies or programs on their PC or Mac. The service makes use of OttoVod movie playback which is powered by DivX.

Movie rentals from OttoVod range between R10 and R35, while purchasing a movie costs between R75 and R150 per title. The typical size of a movie or program is between 300MB and 1GB, something which can add significant additional costs to the purchase or download due to bandwidth charges. This is something which Axxess plans to address in future.

Wireless technology solutions provider WiFi Direct has recently announced that it has also launched an OttoVod based Video on Demand service, but is offering its wireless subscribers zero rated bandwidth to access the service.

The video on demand service is currently a pre-paid service for customers on the WiFi Direct Wireless Network with a fixed monthly wireless network access charge of R35 per wireless subscriber. Movies will cost between R10 and R35 to rent and R50 and R225 to purchase.

WiFi Direct’s VoD service is currently only offered to their residential wireless customers, but the company said that they are working hard on making this service available to non-wireless customers by means of an ADSL dial-up into their movie server.

Zero rated bandwidth (or at least flat rated) is an important component to ensure that video on demand gains traction in the local broadband market. With typical ADSL data prices ranging between R30 per GB and R70 per GB, the bandwidth costs associated with a 1 GB movie download can far exceed the rental cost of the movie. In bandwidth-starved environments a VoD service is clearly doomed to fail.

Internationally VoD and IPTV services are however showing strong growth on the back of fast, affordable and flat-rated broadband offerings. North America showed an IPTV growth of more than 15 percent over the last quarter and a huge 94.2 percent year-on-year improvement. There are now nearly 4.5 million IPTV lines across North America.