Tuesday, 10 March 2015

Pay-TV homes in MEA region will double in 2010 - 2020 to 21.3 million

Piracy remains a major problem in the Middle East and North Africa, despite the many efforts to eradicate it. According to the latest 'Digital TV Middle East & North Africa' report, there are 34.3 million Arabic-speaking free-to-air satellite TV homes in the region, and it is estimated that at least 10 percent of these homes also receive pirated premium satellite TV signals. 

The legitimate side of the Arab-speaking pay TV business is becoming a two-horse race between beIN Sports/Al Jazeera and OSN, the latter of which has begun carrying premium channels of former rivals channels. Both operators are primarily delivered via satellite, although several cable and IPTV operators carry one or both of these packages.

Given that there are 725 free-to-air channels, premium pay-TV operations in the Arabic countries were traditionally mostly confined to the expatriate populations. However, things are changing, with more Arabic content attracting local subscribers.

The report estimates that beIN Sports had 819,000 residential satellite TV subscribers by the end of 2015. This figure excludes non-satellite subscribers and non-residential satellite subscribers. Mostly delivered via satellite, the channels are also available on several cable and IPTV platforms such as Ooredoo in Qatar, Mobily in Saudi Arabia, and Etisalat and du in the UAE.

beIN Sports offers 18 pay TV channels: the first 10 are in Arabic, and the next six form the Global package, which has two in English, three in French and one in Spanish. NBA and Fox Sports are available a la carte or as part of the Global package. There are also two FTA channels: beIN Sports and beIN Sports News.

beIN Sports Arabia, formerly called Al Jazeera Sport, has been aggressively signing up rights, including regional exclusivity for the European Champions League for three seasons until 2017/18 for a reported USD 300 million and the 2014, 2018 and 2022 World Cups, the last of which Qatar will host.

In July 2013, the company acquired the exclusive Middle East and North Africa rights, covering 23 countries, to the English Premier League for the three seasons until mid-2016. beIN also holds the rights to Italy’s Serie A, France’s Ligue 1, Germany’s Bundesliga, Spain’s La Liga and the AFC [Asian] Champions League as well as NBA, US and French Open tennis and the Tour de France.

Pan-Arab satellite broadcaster Al Jazeera is owned by the Qatari government, with 20 channels on offer. Its Arabic channel is available in 50 million homes globally. Al Jazeera English is available in 220 million households in more than 110 countries.

beIN Sports was reported in the local press to have acquired a 53% stake in Turkey’s Digiturk for $820 million in December 2014. However, these reports await official confirmation from either party. This stake was a result of the Savings Deposit Insurance Fund of Turkey acquiring the assets of the Cukurova Group.

The loss of the English Premier League rights to beIN Sports was a major blow to Abu Dhabi Sports. The company had struggled to gain subscribers, reaching about 600,000 across its 20 channels in the previous deal. However, Abu Dhabi Sports regained some ground in December 2013 when it won the rights to UEFA’s qualifiers for Euro 2016 and the 2018 World Cup. The company also holds the rights to the Arab Gulf League; screening three matches a week.

Since September 2014, Abu Dhabi Media’s premium channels, including sports and new channel Abu Dhabi Drama+, have been exclusively available on OSN.

Digital TV Research estimates that OSN had 1.16 million residential satellite subscribers by 2015. This figure excludes non-residential subscribers and subs to the non-satellite platforms. This indicates strong growth as parent KIPCO stated that OSN had 858,000 subscribers in September 2013, and 734,000 by 2015.

Carrying 146 channels, including 38 in HD, OSN was formed from the merger of Kuwaiti-owned Showtime Arabia and Orbit Communications in July 2009 to create the largest pay TV platform in the Middle East.

OSN has appealed mostly to the expatriate community in the past. In August 2013, OSN acquired Pehla, which targets the 800,000 South Asian homes in the region and has rights to top cricket.

However, the company is now putting greater emphasis on attracting local subscribers. For instance, OSN has started carrying channels from former rival ART as well as premium channels from Abu Dhabi Media.

OSN is owned by Panther Media Group, which, in turn, is 60.5% controlled by KIPCO (Kuwait Projects Company) and Saudi Arabia’s Mawarid Group. KIPCO announced in June 2013 that it was planning an IPO for OSN, but these plans were postponed in November after the company secured a US$200 million loan.

In August 2014, KIPCO rejected a US$3.2 billion bid from US private equity firm Hellman and Friedman for its stake in OSN, whose revenues were about US$500 million in 2013.

The number of pay TV homes across 20 countries in the Middle East and North Africa region will double between 2010 and 2020 to 21.3 million, with Turkey accounting for 37% of the total. According to the report, from the 6.84 million pay-TV homes to be added between 2014 and 2020, 2.15 million will come from Turkey and 1.03 million from Egypt.

About 18% of TV households, analogue and digital, legitimately paid for TV signals by 2015. This proportion will climb to 24% by 2020. Qatar will record 72% pay TV penetration by 2020, with Georgia at 50%, Israel 71% and the UAE 52% also high. However, pay-TV penetration will remain below 10% of TV households in Algeria, Jordan, Morocco, Syria and Tunisia.

Legitimate pay TV revenues for the 20 countries covered in the Digital TV Middle East & North Africa report will grow by 75% between 2010 and 2020 to US$5.63 billion. Turkey and Israel are expected to contribute 51% of the region’s pay-TV revenues in 2020; down from 65% in 2010. This leaves only USD 2.77 billion for the remaining 18 countries in 2020, or an average of USD 154 million each.

From the USD 1.37 billion pay-TV revenues to be added between 2014 and 2020, Turkey will supply USD 362 million, Egypt USD 227 million and Saudi Arabia USD 367 million. Revenues in Israel will fall by USD 108 million over this period due to greater competition and the conversion of subscribers to bundles, which means lower TV revenues per subscriber.

Satellite TV will continue to dominate pay-TV revenues, taking two-thirds of the 2020 total, similar to the 2014 proportion. Satellite TV revenues will be USD 3.8 billion in 2020, up by USD 800 million on 2014 and USD 1.7 billion on the 2010 total.

Turkey will account for USD 1.57 billion of the 2020 satellite TV revenues, followed by Saudi Arabia with USD 674 million. Saudi Arabia will take second place from Israel in 2015. Satellite TV revenues in Israel will start falling in 2016 as competition forces down ARPU.

Pay satellite TV penetration will climb from 6.9% in 2010 to 11.8% in 2020, with subscriber numbers doubling from 5.01 million to 10.32 million. Penetration in 2020 will reach 27% in Bahrain, 26% in Israel, 23% in Kuwait, 37% in Qatar and 26% in Turkey, but will be less than 5% in a further 10 countries.

About 55% of TV households, 43.35 million, watched free-to-air satellite TV signals by 2015. This proportion is not expected to change too much in coming years, although the number of FTA satellite TV homes will increase to 48.27 million. FTA satellite TV penetration varies 
considerably among the 20 countries: from 87% in Algeria to 3% in Israel in 2020.

Homes paying for IPTV will overtake cable subscriptions, analogue and digital together, in 2015. There will be 6.16 million IPTV subs in the region by 2020; triple the 2014 total. Turkey will have 1.63 million subscribers, five times as many as 2014, and will be the IPTV subscriber leader in 2020; ahead of Saudi Arabia with 709,000 subs, Kazakhstan 623,000 and Egypt 737,000. However, Qatar will lead in penetration terms, with 35%, by 2020, followed by the UAE with 33% and Georgia 24%.

IPTV revenues will grow tenfold between 2010 and 2020 to USD 1.07 billion. The UAE will contribute USD 233 million of the 2020 total, followed by Saudi Arabia with USD 226 million and Turkey USD 183 million.

Click here to learn more about the 'Digital TV Middle East & North Africa' report

Thursday, 5 February 2015

70+% Pay-TV penetration for Qatar and Israel TV by 2020

The number of pay-TV homes in the Middle East and North Africa will double between 2010 and 2020 to 21.3 million, according to a report by Digital TV Research. Turkey will account for 37 percent of the 2020 total.
The report finds that 18 percent of TV households legitimately paid for TV signals by end-2014. This proportion will climb to 24 percent by 2020. Qatar will record 72 percent pay TV penetration by 2020, with Israel also high at 71 percent. However, pay-TV penetration will be below 10 percent of TV households in Algeria, Jordan, Morocco, Syria and Tunisia.
Legitimate pay-TV revenues for the 20 countries covered in the report will grow by 75 percent between 2010 and 2020 to USD 5.63 billion. Turkey and Israel are expected to contribute 51 percent of the region’s pay-TV revenues in 2020; down from 61 percent in 2014.
Satellite TV will continue to dominate pay-TV revenues, taking two-thirds of the 2020 total (similar to the 2014 proportion). Satellite TV revenues will be USD 3.76 billion in 2020. Turkey will account for USD 1.57 billion of these revenues, followed by Saudi Arabia with USD 674 million. Saudi Arabia will take second place from Israel in 2015.
Pay satellite TV penetration will climb from 6.9 percent in 2010 to 11.8 percent in 2020, with subscriber numbers doubling from 5.01 million to 10.32 million. Of the 10.32 million total in 2020, Turkey will contribute 5.32 million and Saudi Arabia 1.24 million. Penetration in 2020 will reach 37 percent in Qatar, but will be less than 5 percent in 10 other countries.
Simon Murray, Principal Analyst at Digital TV Research, said: "Pay satellite TV has grown due mainly to the expansion of OSN and beIN Sports. We estimate that OSN had 1,162,000 residential satellite subscribers [excluding non-residential satellite subscribers and subscribers to non-satellite platforms] at end-2014, with beIN Sports providing a further 819,000. "
He cautioned: "Piracy remains a major problem, despite many efforts to eradicate it. There are 34.3 million free-to-air satellite TV homes in the Middle East and North Africa sub-regions [excluding Israel, Turkey and Eurasia]. We estimate that at least 10 percent of these homes also receive pirated premium satellite TV signals. This represents considerable revenue loss to the legitimate players. "
There will be 6.16 million legitimate IPTV subs across the whole region by 2020; triple the 2014 total. Turkey (1,631,000 subscribers – five times as many as 2014) will be the IPTV subscriber leader in 2020. However, Qatar (35 percent) will lead in penetration terms by 2020. IPTV revenues will grow tenfold between 2010 and 2020 – to USD 1.07 billion.
Click here for further details of the report.

Tuesday, 25 November 2014

Carrier netural data centres gaining ground says TCL

Data Centre pricing specialists TCL (Tariff Consultancy Ltd) in a revised edition of its Data Centre Africa report, last published in 2012, has found new space being provided in Nigeria and South Africa means that these two account for 60 percent of total Data Centre space in Africa.

TCL forecasts that Data Centre space will amount to 107,000 square metres in Africa at the start of 2015, and is predicted to grow by 7 percent per annum over the 5 years to 2020.

New Carrier Neutral Data Centre space is being created for the first time since 2012 with new high specification facilities in Ghana, Kenya, Nigeria and Tunisia, with higher pricing and high-density applications. It also finds that the average size of African Data Centre facility has risen from 563 m2 in 2012 to 725 m2 in 2014, but the average size remains smaller than in Europe or in North America.

TCL also finds that the new high quality facility space is creating higher average rack space pricing – with average pricing now costing USD 748 per rack per month across Africa, as of the start of 2015.

Providers such as IS and Telkom are expanding their geographical Data Centre coverage through acquisition, with Telkom in the process of acquiring ICT provider BCX which has its own Data Centre footprint.

Operator-owned Data Centres accounts for almost half of all raised floor space in Africa, but space for the Carrier Neutral Data Centre sector is now quickly increasing from a relatively low base.

TCL finds that Africa average rack space pricing can range from USD 663 per rack per month, as in Ghana, up to USD 885 per rack per month in Tunisia. But within each Country Market there is also a wide range of pricing, with rack space pricing ranging from USD 500 - 1,100 per month. Lower rack space pricing is typically now available in markets like South Africa, where there are now multiple Data Centre providers and facilities present, offering different tiers of service, power and services which can be adapted to specific customer needs.

Click
here for more information on this study.

Friday, 21 November 2014

Most admired and valuable African brand is...MTN

The 2014 Brand Africa 100 results were announced on Friday at the Nairobi Stock Exchange in Kenya. Non-African Coca-Cola toppled Nokia as the most admired brand, while African MTN moved up a notch.

Thebe Ikalafeng, Chairman, Brand Africa and Brand Finance Africa said: 'Despite a challenging environment for emerging African and non-African brands seeking a share of the lucrative African market, MTN remains the pre-eminent global Africa benchmark and inspiration, with consistent brand leadership and a special place as a pioneering enabler brand for African businesses and consumers'.

The survey was carried out in eight countries, namely Ghana and Nigeria (West Africa); Kenya, Tanzania and Uganda (East Africa); DRC (Central Africa) and Mozambique and South Africa (Southern Africa). 


Of these, MTN is only active in four of them, namely Ghana, Nigeria, Tanzania and Uganda. This begs the question as to whether the MTN is particularly strong in these four countries, so allowing it to dominate the whole group, or whether the compilers have weighted the results from the four nations. Either way there is a concern regarding methodology of the study.  

However, MTN is the dominant telco group in Africa. 'Africa & Middle East Telecom-Week' has found that it is the largest group by subscriber numbers with some 157.25 million at the end of the first quarter of 2014, and enjoyed a Compound Annual Growth Rate (CAGR) of 8% in the period 1Q 2012 - 1Q 2014.

Its nearest rival is Vodafone/com with 127.38 million (6 percent CAGR), and the recently enlarged Etisalat / Maroc Telecom with 91.76 million ( 9 percent CAGR). Orange is fourth with 91.71 million, whilst Bharti Airtel is fifth with 80.53 million, but a reasonable CAGR for 1Q12 - 1Q14 of 9 percent.

To learn more about the African telecoms market, download the Africa & Middle East Mobile Factbook 2Q 2014.

Friday, 12 September 2014

Which mobile operators are most affected by the Islamic State?

In Iraq the GSMA coverage maps show Zain as having the superior coverage in the area currently held by rebel forces. It had good coverage of the three transport corridors running westwards from Bagdad to the borders with Syria, Jordan and Saudi Arabia. 

It is the only operator to cover the north-south route from Al Nkheeb to the Rutba - Ramadi highway, and the road from Al Qa'im to Rutba, which runs parallel to the Syrian border.


Mobile Coverage map of Iran & Syria showing area of IS influence September 2014 
Source: GSMA coverage maps, industry sources c. Blycroft 2014

Asiacell has a similar coverage profile for the two northern-most east-west routes, but does not provide coverage south of the Bagdad - Rutba highway. Its coverage in the area controlled by the self-proclaimed Islamic State is therefore roughly half of Zain's. Korek, as befits the third ranked operator by subscribers, covers just the three east-west highways, but with a lower density than either of its rivals.

All three networks cover the northeastern (Kurdistan) and eastern regions, although the GSMA maps suggest that Asiacell offers the better coverage in both areas. In the north-east, Zain and Korek both offer a lower level of service, although both offer roughly similar geograpical coverage. In the east Asiacell and Zain offer broadly similar, comprehensive coverage, whilst Korek has the smaller network.

In Syria it is MTN that is most affected, with the IS area of influence having strong network coverage, with the SyriaTel nertwork less affected, having only two areas affected. There have been no reports of IS targeting communications passing through its areas of control, and it must assumed that fibre continues to connect areas east and west of the notional corridor controlled by IS.

MTN Syria was reported to be close to concluding a deal with the Syrian government to gain a 20-year mobile phone licence, according to the Syria Report.