Eventually, DStv is on its path to becoming an internet Service provider

Popular cable tv services provider, DStv has launched its own internet service for users beginning from its home country, South Africa. This move is part of an unsurprising evolution from its traditional cable entertainment business in the face of competition from streaming platforms like Netflix and Amazon Prime.

According to a statement yesterday by its parent company, Multichoice, consumers will now be able to purchase the service online or at DStv walk-in centres across South Africa for a start.

How it will work

The DStv Internet is a fixed wireless access service. This means that customers will get connected to the internet via a SIM card and Wi-Fi router. Some media platforms have reported that Multichoice has selected telecommunications services provider, MTN to provide the service to users in their homes.  But, the details of the partnership is yet to be spelt out.

Executive for Managed Network Services at MTN SA confirmed the partnership. She also said:

“We are proud to partner with Multichoice to enhance access to digital services in South Africa. As a network wholesale provider, we are gearing up to serve the broader digital eco-system to ensure that more people can benefit from a modern and connected life,” 

The DStv Internet offering also includes an exclusive new premium service called DStv Trusted Home, an AI-driven network security and Wi-Fi management solution developed jointly by MultiChoice’s digital platform security subsidiary Irdeto, and Minim – the creator of intelligent networking products.

According to the announcement, the DStv Trusted Home not only comes with an iOS and Android app. The DStv Trusted Home app is only available for use with DStv Internet routers. The routers are included in the bundle and contract offerings.

As part of the launch of DStv Internet, the first 20 000 customers will receive a free 12-month subscription to the DStv Trusted Home app. After 12 months, customers will have the chance to opt out or add a monthly charge of R30 to their DStv Internet bill.

Internet as part of DStv’s plan to stay alive

Africa’s biggest entertainment company, Multichoice has been facing a two-pronged battle. The first is the growing competition from streaming platforms. The other is the rigorous push by governments for a reduction of its prices.

Africa has a population of over 1 billion. But, there is just 2.7 million Video on demand (VoD) subscribers on the entire continent. A small but growing number considering that over half a billion (527 million) Africans use the internet and more than 250 million have smartphones. Hence, the competition for this sum has been intense.

For instance, Netflix is pumping colossal sums into creating African originals in a bid to capture Africa’s largely untapped VoD market. The company on Monday announced a free mobile plan offering for users in Kenya, an unprecedented move the company believes will spike growth and retention.

According to a Digital TV Research study, Netflix currently has just about 2 million subscribers in Africa. Although Multichoice claims to serve more than 20 million households across 50 countries in Africa, we know that Showmax isn’t making a significant kill in the VoD market.

On the other hand, regulators in some countries are pressuring the company to provide more affordable options for its citizens. For instance, the Nigerian government has proposed that DStv introduce a Pay-Per-View (PPV) billing model in the country.

This is in the face of dwindling revenue and a possibility that it might not acquire broadcast rights for the UEFA Champions League and the English Premier League (EPL) on SuperSport in 2022 after the 2020/21 football season ends.

This is on the heels of an unremitting price war with competitors such as Chinese owned Startimes across West and East Africa. In fact, Multichoice announced plans to reduce the subscription prices of DStv and GoTV across East Africa – Ugandan, Kenya, Tanzania and Mozambique just before the pandemic. This follows a decision by a rival, StarTimes, to lower its prices in the region.

In response, the company has made a rigorous effort to evolve from a traditional pay-tv platform to become a thorough entertainment outfit. Recall that in June, Multichoice made an offer of about $281.5 million to Blue Lake Ventures Limited (BetKing) to increase its shareholdings in the company to 49% from 20%.

Group CEO Calvo Mawela explained then that Sports betting is an interesting market that is aligned to the company’s Pay-tv business.

With the foray into internet services, Multichoice is opening another entertainment stream that could make it easily become an alternative for about 20 million households who do not have access to fibre services. The fact that it could provide the service as an add-on without installing new fibre structures makes it a profitable prospect.

More so, customers have the benefit of choosing from bundled offerings that include data options with their DStv subscription package, hence, a reduced customer acquisition cost.

As we hear, people who don’t have a DStv subscription can use DStv Internet as well. This means that people may need the DStv internet to view other streaming platforms.

This will significantly alter the internet service game across a number of African countries. As to the degree of the change, only time can tell.