Digital TV Penetration Accelerates in Sub-Saharan Africa

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A new market research report, "Digital TV Sub-Saharan Africa" by Digital TV Research highlights the following.

About 35.3% of TV homes (14 million) in the sub-Saharan region of Africa took digital signals by year end 2012. According to the report, digital TV penetration will jump to 95.5% by 2018 with household numbers quadrupling to 49 million. Full digital transition is expected to be completed in Kenya, Tanzania, Uganda and Zambia by the end of 2015.

"Even we have been surprised by the pace of change and progress in the regions television market in the year since the last edition of this report. These are exciting times for Sub-Saharan Africa," says author of the report Simon Murray.

Two-thirds of Sub-Saharan Africas TV households still received analog terrestrial signal at the end of 2012; however, this proportion will drop to 4.5% in 2018. Two-thirds of television homes will take DTT (pay and free-to-air combined) in 2018, up from only 11.7% at the end of 2012. Sub-Saharan Africa will have 33.8 million DTT homes by 2018 (25.7 million FTA and 8 million pay) - up from 4.6 million in total at end-2012.

The most prominent DTT players are China-based StarTimes (active in 10 countries with about 1.5 million Sub-Saharan Africa subs) and Multichoices GOtv (operational in five countries). South Africas Multichoice also owns DStv, its long-established pay DTH platform that controls valuable exclusive rights deals (such as live English Premier League soccer). Greater competition (especially from cheaper DTT players) led to DStv lowering prices to some of its packages. However, the launch of sister service GOtv gives Multichoice the ability to target all demographics in the pay TV market.

Frances CanalSat/Canal Plus Afrique is the other major regional pay DTH player, although it does not compete too much with DStv as they separately target countries with their respective languages. However, DStv faces more direct rivalry in East Africa from Kenya-based Wananchi Group. Wananchi is targeting the 15 million TV households that it forecasts for East Africa by 2015. With cable operations established in Kenya, Wananchi launched its Zuku DTH platform in 10 East African countries in July 2011.

Only a small proportion of African homes can afford premium DTH packages.

There were 7.36 million pay DTH subscribers by end-2012, with the total expected to rise to 11.27 million in 2018. Excluding South Africa, the number of pay DTH households will double between 2012 and 2018 to 6 million.

Of the 9.26 million pay TV subscribers at end-2012, 79% were for pay DTH. The pay total will double to 20.39 million by 2018. Pay TV penetration of television households will grow from 23.3% in 2012 to 39.8% in 2018.

Sub-Saharan pay TV revenues will reach $4.62 billion in 2018, up from $2.88 billion in 2012. DTH accounted for nearly all of the 2012 total, though pay DTT will make inroads (contributing $744 million in 2018). South Africa will remain the dominant pay TV revenue generator. However, its share of the total will fall from 61% in 2012 to 47% in 2018. Excluding South Africa, pay TV revenues will rocket from $1.12 billion in 2012 to $2.46 billion in 2018.

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