South African telecom provider Telkom removes Netflix from its video service

Telkom SA SOC Limited, a South African telecommunications provider has announced that Netflix Inc. will no longer be available on the South African phone and internet company’s set-top box from October.

This was revealed by Telkom’s Content Executive, Wanda Mkhize who said that the deal between Telkom and Netflix has come to an end and will not be renewed. The reason for this was not mentioned.

“Our current partnership with Netflix has unfortunately come to an end…. While customers will no longer have access to Netflix on the Telkom set-top box from 1 October 2021, they will still be able to access other OTT services on their STB.”

Wanda Mkhize, Content Executive, Telkom

Telkom partnership with Netflix began in 2018, marking the video-on-demand company’s first such agreement with a South African telecommunications company. Netflix produced local content such as “Queen Sono” and “Blood and Water” during the time of the partnership.

While Telkom may have pulled the plug on the partnership, it, however, assured its customers that new partnerships with new content types will be made available soon.

“We have exciting new and refreshed content partnerships for our valued customers which will be announced in due course,” the telecom giant said.

Telkom subscribers react amid rising speculation

Following the announcement, there were a number of complaints from customers who said they bought Telkom’s set-top box mainly because of Netflix.

Siyazi Wanjali said “I bought these Telkom LIT devices with certain capability of which now they can longer deliver. Worse, it was not even communicated to me, neither by Telkom nor Netflix, and my debit order went through. I feel robbed.”

Telkom however, told customers who purchased a Telkom LIT box in the past 6 months that they will be compensated with a voucher to the value of R1000.

This comes amid strong speculations as to whether Netflix discontinued the partnership as a result of its partnership with MultiChoice Group Limited, Africa’s largest pay-TV provider. MultiChoice signed deals with Netflix and Amazon.com Inc. to offer their streaming services through its new decoder.

Africa is a small market for paid video streaming, with just a few million subscribers out of a population of more than 1 billion, and the U.S. giants have targeted it for future growth.

The US company also appointed its first African board member, Zimbabwean media tycoon Strive Masiyiwa, in a bid to grow on the continent.

Netflix is witnessing a post-pandemic decline

This development is coming at a time Neflix is witnessing a declining subscriber growth rate after the pandemic boom. After recording 15.8 million new customers during the lockdown, the video streaming company managed just 3.98 million new sign-ups in the first quarter of 2021.

This is way below the 6.25 million average projection of analysts surveyed by Refinitiv, according to a Reuters report. Netflix shares also fell 11% at the time, wiping $25 billion off the company’s market capitalization. This was a massive decline following a 22% share rise in the 12 months prior.

To make up for this, the video streaming service is looking to add customers outside of more saturated markets such as the United States.

Netflix which already has services in more than 190 countries, including Nigeria and South Africa, also began offering a free mobile plan with some of its TV shows and movies in Kenya, another strategy aimed at sparking growth in a key African market.

The company also confirmed it is entering the gaming market in its Q2 report with games becoming a new content category. The new games, which will primarily focus on mobile, will build on its earlier interactivity projects like Black Mirror Bandersnatch and Stranger Things games.