South African technology blog, My BroadBand reports that MTN is in discussions to buy pan African satellite TV provider, Multichoice. Multichoice is the owner of DSTV, the defacto leader in satellite TV across Africa, GoTV, the Box Office movie rental service, DSTV Now, Catch Up among others. Both firms are headquartered in South Africa.
Just recently, the same MTN bought South African FTTH (Fiber-To-The-Home) provider called Smart Village from Multichoice and if these discussions are to yield any fruit, it will see MTN’s formidable entry into the home entertainment business as the whole group shifts towards digital services as echoed in its earnings report recently.
Multichoice is owned by Naspers, which is also the most valuable African company and currently the satellite provider has more than 5 million customers across Africa with a large concentration of them in South Africa and Nigeria.
It is also said that MTN is already in talks with Multichoice to provide TV entertainments services to its smartphone subscribers. This new revelation however reveals that MTN might actually scoop the whole business from Naspers to cement its position in digital entertainment services as most smartphone users tend to consume most content on their gadgets these days. This leaves most network providers as mere data pipes through which such content is consumed thus missing out on potential revenue.
By controlling both the content and the data pipe gives MTN leverage not only in acquiring customers but also in retaining existing ones as it shifts towards digital. It should be noted that such deals have become the norm even in the US with most wireless carriers acquiring TV providers and networks in order to control the value chain and gain ground in this shift in media consumption. For example DirecTV was recently bought by AT&T and also ComCast bought NBC Universal.
On the other hand, the TV business has been disrupted by on demand services like Netflix and ShowMax that are convenient for customers and are available across multiple devices and form factors. Naspers might as well be considering to exit the traditional TV business while MTN wants to improve its foothold in the wireless business thus the move of wanting to be part of this shift, and diversify its revenues besides the traditional voice and data services as well as mobile money to now include digital services.