Broadband spread in SA unplugs 'video on demand' biz

By MoneyTimes

Sep 23, 2015 09:31 AM EDT

The massive expansion of fiber optic broadband (FOB) in Johannesburg and other up markets in South Africa is paving the way for video on demand (VoD) services.

Many companies with offers of internet video streaming services are making a beeline to explore the untapped market in the most developed economy in African continent. It's learnt that US major in streaming video services is also entering the market.

Five South African video on demand services have already been launched. Going by the indications in the expansion plans of Netflix, the US video streaming services giant may also enter the South Africa next year.

The high-speed internet connection is likely to enhance the number of VoD subscribers to 200 million by 2020 globally. And South African market is catching up with the trend.

The significant number of middle-class families in South Africa is the major market for video on demand services. Banking on the fiber optic broadband network in the country, a few more VoD services are expected soon in the market.

Many video on demand service providers are planning to establish their presence to take advantage of the ongoing boom in South Africa. 

MTN, the largest mobile operator in the country, is offering video on demand service called 'FrontRow.' MTN has already waived data charges for its subscribers, who have taken FrontRow service. Napsers-owned VoD service provider Showmax which launched its services in August, says that the connectivity is coming to South Africa. 

It's estimated that over one million households in the country have a bandwidth that supports video streaming. The number of household with broadband is expected to go up as fiber optic internet providers are expanding. 

Telkom, the national operator in fixed line segment, is targeting to bring one million households under broadband coverage by 2-16. Other start-ups such as Vumatel are focusing on suburbs for fibrehoods with high speed internet services. 

Though lately, South African broadband market is taking off attracting many service providers. Telkom is the market leader in fixed line and international bandwidth markets. Since wireless broadband services are expanding, mostly from mobile network operators, several WIMAX networks were forced to shut down. 

South African consumers are very fast migrating to 3G and LTE mobile networks for accessingthe Internet. Now, it's estimated that fixed line connections are with just 10 percent of the population.

The cost of installation of fiber optic cable is higher than fixed line. But, fiber optic cable delivers data at a speed of 20megabits (MB) per second. This is ten times higher than the fixed line copper connections.

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