Challenges for Mobile Operators in Africa

In our blog “Short-term Future Trends On African Video Streaming Market” we talked about the promising growth of the African video streaming market, projecting substantial expansion in the coming years. It points out that the African OTT market is on the rise, with significant potential for further development.

African Video Streaming Market On the Rise

The African OTT market is experiencing growth, although it has not reached the maturity levels seen in North America and Europe.

By 2027, the African region is expected to have 13.64 million paying SVOD subscriptions, marking a substantial increase from 4.90 million in 2021. The blog also mentions that 6.6% of households with a TV will have at least one subscription by 2027 (digitaltvresearch.com). While markets such as South Africa and Nigeria are the strongest and have a lot of potential, growth is equally expected in other areas, including both West Africa and East Africa, and most of the countries, including Angola, Tanzania, Kenya, Ghana, Uganda, Ethiopia, Algeria, and others.

According to statistics, the African video streaming market was valued at $1.8 billion in 2022, with an expected annual growth rate of 11.39% over the 2022–2027 period, forecasting a market volume of $3.1 billion by 2027. (Statista)

Despite the growth, there are several challenges facing the African video streaming market, including inadequate broadband infrastructure, piracy, low-income users, and the need for content, especially localized content.

Challenges Faced by Mobile Operators in the African Video Streaming Market

Mobile operators, just like all telecoms companies, face a number of challenges in the African video streaming market, including:

Competition from global streaming providers

Global streaming providers such as Netflix, Amazon Prime Video, and Disney+ are investing heavily in the African market. These providers have a large library of content and are able to offer their services on a global scale. This makes it difficult and puts constraints on mobile operators' ability to compete on content and price.

Piracy affects the telecoms market as well

Piracy is a major problem in the African video streaming market. This is due to a number of factors, such as high levels of poverty and a lack of awareness of copyright laws and the meaning of ownership. Piracy can make it difficult for mobile operators to generate revenue from their video streaming services.

African Mobile Networks: Insufficient Broadband Infrastructure and Mobile Routers

In some parts of Africa, the infrastructure required to support video streaming is limited. This can lead to buffering and other problems that can impact the user experience.

Africa's Unique Infrastructure Landscape

In Africa, the landscape of broadband infrastructure is unique, which presents a significant challenge to mobile operators aiming to provide video streaming services. Unlike regions with well-established fixed broadband networks, Africa lacks DSL infrastructure with minimal optical fibre penetration. As a result, the majority of African consumers are looking to set up mobile routers for their internet connectivity. This scenario necessitates the telecommunications developments, adoption, and optimization of 4G and 5G networks in the mobile communications market.

Mobile operators in Africa are increasingly embracing newer mobile technology and 4G and 5G networks to expand their coverage and meet the growing demand for mobile data services and mobile phone services. These high-speed mobile telecommunications networks not only offer improved data rates but also enable operators to deliver streaming content seamlessly to mobile users. However, building and maintaining these networks requires substantial investments.

Value-Added Services in Video Streaming

Mobile operators in Africa are exploring various value-added services to increase data traffic and maximize their returns on the upgraded mobile infrastructure in the telecommunications industry. One of the key strategies is diversifying its telecom services portfolio beyond traditional GSM services on the GSM network, like voice and SMS. These value-added m-commerce services encompass gaming, e-learning, and, notably, video streaming.

Consumer behavior

Consumer behavior in Africa is different from consumer behavior in other parts of the world. For example, many African consumers are not used to paying for content. This can make it difficult for mobile operators to generate revenue from their video streaming services.

Despite these challenges, mobile operators are well-positioned to play a leading role in the growth of the African video streaming market. By addressing the challenges they face, mobile telcos can offer their customers a high-quality video streaming experience that is tailored to their needs.

In addition to the challenges listed above, mobile operators also face the following challenges in the African video streaming market:

Lack of local content

In many African countries, there is a lack of locally produced content that is available for streaming. This can make it difficult for mobile operators to attract, and retain customers.

High data costs

Data costs are high in many African countries. This can make it expensive for consumers to stream video content.

Limited payment options

In some African countries, there are limited payment options available for online services in the marketplace. This can make it difficult for consumers to pay for video streaming services.

By addressing these challenges, mobile operators can make video streaming more accessible and affordable for African consumers.

UniqCast Solutions: Empowering Mobile Telecoms in Africa

Overcoming Initial CAPEX Challenges

One of the major hurdles that mobile operators in Africa face when venturing into video streaming services is the initial Capital Expenditure (CAPEX) required. Setting up a robust video streaming platform entails significant upfront costs, and this often proves to be a barrier for many operators. This is where UniqCast steps in to provide a practical solution.

On-Site and Cloud-Based Solutions

UniqCast offers two key deployment models: on-site setup and cloud-based solutions as well as different hybrid models. Mobile operators in Africa have the flexibility to choose the approach that best suits their needs and financial capabilities. The on-site setup ensures a customized, localized service, while cloud-based solutions offer a faster deployment with a smaller initial CAPEX.

Tailoring Services to African Market Dynamics

The African market presents unique characteristics. Buying power in the region is relatively small, and the majority of consumers prefer micro-plans that offer access for a day or a week. UniqCast recognizes these specific market dynamics and tailors its services to address them effectively.

FAST Channels: A Quick Content Solution

UniqCast understands the urgency of getting African mobile operators started in the video streaming space. Many of our African clients are eager to launch video streaming services but often lack the necessary content or the knowledge to acquire them. To bridge this gap, UniqCast helps them get FAST (Free Ad-Supported Streaming Television) channels. These channels provide a valuable solution by delivering content with embedded advertising, allowing operators to acquire content rapidly and cost-effectively.

Seamless Mobile-First Experience

The primary mode of content consumption in Africa is through mobile devices. Recognizing this trend, UniqCast focuses on delivering a seamless mobile-first experience. Our services are optimized for mobile screens, ensuring that users can access their favorite content easily and efficiently.

Mobile Companion and Casting Features

UniqCast's video streaming services include essential features like mobile companion (remoteless TV), enabling users to interact with and control their streaming experience from their smartphones without the need for a remote controller. Furthermore, users can effortlessly cast content onto larger screens without the need for operators to invest in expensive set-top boxes (STBs). For those with smart TVs, UniqCast ensures compatibility. These mobile-first features provide a holistic and user-friendly streaming experience, thus increasing engagement.

These are just a few examples of how the features of the video streaming platform can cater to the specific needs of the operators and the subscribers.

By understanding and addressing these challenges, UniqCast empowers mobile operators in Africa to tap into the burgeoning video streaming market, offering high-quality content with innovative solutions that match the unique characteristics of the region's consumers.

The Role of Mobile Operators as Key Players in the African Video Streaming Market

Mobile operators play a key role in the African video streaming market due to a number of factors

1. Extensive Reach and Infrastructure

Mobile operators in Africa boast an impressive subscriber base, with a collective reach extending to over 500 million users. This extensive network coverage grants them a unique advantage in terms of content distribution and access to a vast customer base. Moreover, they are actively investing in expanding their network infrastructure, a pivotal step towards bolstering the video streaming ecosystem.

2. Control Over the Data Pipeline

Crucially, mobile operators exercise direct control over the data pipeline, endowing them with the capacity to manage and optimize the delivery of video content. This holds particular significance in Africa, where bandwidth limitations are commonplace. By overseeing the data pipeline, mobile operators can ensure the seamless and buffer-free delivery of video content, thereby enhancing the user experience.

3. Ability to Bundle Services

Mobile operators possess the flexibility to bundle video streaming services with a spectrum of complementary offerings, such as data plans and mobile money services. This bundling strategy serves a dual purpose: it renders video streaming more affordable and accessible for consumers while concurrently fostering enduring relationships between mobile operators and their customer base.

4. Local Knowledge and Expertise

Armed with an in-depth understanding of the local market dynamics and consumer behaviors, mobile operators can develop and curate video streaming services that align precisely with the preferences and requirements of African consumers. This localized approach enhances the appeal of their offerings.

These distinctive attributes position mobile operators as pivotal players in the African video streaming realm. Not only are they actively introducing their own streaming services, but they are also forging strategic partnerships with global streaming giants, thereby granting their customers access to an expansive array of content. This collaboration not only broadens the content spectrum but also enriches the user experience, reinforcing the central role of mobile operators in propelling the growth of the African video streaming market.

The Future of Video Streaming in Africa

Population Growth and Tech-Savvy Generation

The future of video streaming in Africa is bright. The continent is home to a young and growing population with a rapidly increasing appetite for digital content.

Africa is on the cusp of a video streaming revolution, primarily due to its rapidly growing population. With approximately 400–500 million people set to become market consumers in the coming years, the region holds immense promise. This demographic is not only large but also tech-savvy, with a strong focus on tech-related jobs. Many of them have already embraced OTT for content consumption. In addition, the rollout of affordable smartphones and the expansion of 4G and 5G networks are making it easier for people to access video streaming services.

Growth Means Opportunities

The growth of the African video streaming market will create a number of opportunities for businesses. For example, businesses can create and distribute video content that is tailored to the African market. They can also develop advertising and marketing campaigns that are targeted at video streaming viewers.

This growth will be driven by a number of factors, including:

• The increasing popularity of mobile video: Mobile video is already the most popular form of online video consumption in Africa, and this trend is expected to continue. In 2021, mobile video accounted for 80% of all online video consumption in Africa.
• The growth of the middle class: The African middle class is growing rapidly, and this is leading to an increase in demand for premium content. Video streaming services such as Netflix and Amazon Prime Video are well-positioned to capitalize on this trend.
• The rise of local streaming services: A number of local streaming services have emerged in Africa in recent years. These services offer a mix of local and international content that is tailored to the needs of African consumers.

The Future of Video Streaming in Africa: A Mobile Operator Perspective

Mobile operators are uniquely positioned to play a key role in the future of video streaming in Africa. With their extensive reach and infrastructure, mobile operators can provide a seamless and affordable video streaming experience to millions of consumers across the continent.

In the future, mobile operators will continue to invest in expanding their networks and improving their data speeds. This will enable them to offer higher-quality video streaming services with fewer buffering issues. Additionally, mobile operators are likely to continue to develop new and innovative ways to bundle video streaming services with other offerings, such as data plans and mobile money. This will make video streaming more accessible and affordable for consumers.

As the African video streaming market continues to grow, mobile operators will face a number of challenges. These challenges include competition from global streaming providers, piracy, and limited consumer awareness of video streaming services. However, mobile operators are well-positioned to overcome these challenges and emerge as leading players in the African video streaming market.

By working with content providers, developing innovative pricing models, and educating consumers about the benefits of video streaming, mobile operators can ensure that video streaming becomes a major part of the African digital landscape.

Specific opportunities for mobile operators in the African video streaming market include:

• Partnering with global streaming providers to offer their services to African consumers
• Developing their own video streaming services with a focus on local content
• Bundling video streaming services with other offerings, such as data plans and mobile money
• Investing in network infrastructure to improve data speeds and reduce buffering
• Educating consumers about the benefits of video streaming

By capitalizing on these opportunities, mobile operators can play a key role in shaping the future of video streaming in Africa.

Opportunities for Local Operators

Localized Content and Premium User Experience

The African video streaming market's future is closely tied to localized content that is gaining international recognition. Both the quantity and quality of content are on the rise, creating an ideal environment for a successful OTT service platform. Mobile operators and OTT service providers need to understand the importance of offering content that is tailored to local markets, ensuring a premium user experience (UX).

Preparing for Success in the African Video Streaming Market

As the African video streaming market continues to grow, operators and service providers must prepare for success. This includes not only setting up the OTT project but also developing a robust sales and marketing strategy. Choosing a reliable OTT vendor with extensive experience in the African video streaming market is crucial. The vendor should offer a turnkey solution with features such as streaming and private CDN, cost-efficient business models, advertising capabilities, and, of course, AI-based content discovery for the ultimate personalized experience. These elements are vital for delivering a premium UX service and attracting subscribers rapidly.

In the evolving African video streaming landscape, the combination of population growth, localized content, and tailored business strategies positions mobile operators and service providers for a bright future. By understanding the market's specific needs and challenges, these entities can thrive in an increasingly competitive and dynamic environment.