Naspers might want to sell DSTV African unit to MTN Group?

Naspers might want to sell DSTV African unit to MTN Group?

Naspers, Africa’s largest tech startup investor and media entertainment company said it is in talks with MTN Group, to supply pay-TV content to MTN subscribers.

Naspers spokeswoman Meloy Horn told Reuters News Agency via phone conversation that “We are in discussions with MTN regarding a content supply agreement,”

It is still not clear whether MTN will be rolling out the service across Africa and other markets where it operates.

It would be recalled that last year, MTN Nigeria, the company’s unit in Africa’s largest economy had launched its digital mobile TV service in some markets outside Lagos, Nigeria’s commercial capital.

According to its plans when it launched the product, MTN said “only subscribers with data-enabled handsets and tablets will be eligible for this service. MTNN will allow eligible subscribers activate this capability using their WAP browser on their mobile device, by either accessing the Mobile TV packages via the MTN Play Portal, or by typing in the address of the MTN Mobile TV service of choice. 

The service will provide target market designed, familiar/exclusive/popular/relevant bouquets from which the subscriber may choose from, and will give MTN customers a new “on-the-go” lifestyle experience. There will be no significant device restrictions or additional device requirements for the customer to enjoy the MTN Mobile TV service.”

It is not clear if MTN will be pushing a mobile-only approach with its partnership with Naspers. Naspers owns Multichoice the company that owns DSTV, a payTV unit company with about 11 million subscribers as at March.

In 2015, MTN received a broadcast license from the National Broadcasting Commission, NBC for NGN34 billion. How much traction its mobile TV has received in terms of user base cannot be substantiated. The company has also stopped to put marketing budget behind the unit.

The latest development might signal a change in strategy. It is also interesting to see how MTN would manage a conflict of interest with Naspers.

However, there are speculations that Naspers is looking at selling its payTV unit to MTN Group. This has not been substantiated by both companies. Naspers’ Multichoice has been having a problem increasing its user base in the face of rising costs of running its operations across Africa.

The company said in its last financial report that it is running all its African units except South Africa at a loss. The worst recession in the last 20 years in Nigeria, coupled with a Naira depreciation complicated the company’s problems in Nigeria. Subscriber base has reduced as a result of weak consumer spending. The plan to sell off its largest chunk might be a deleveraging move.

Naspers has not really made a success out of all its media and entertainment ventures. Its USD33 million investment in China’s Tencent has appreciated to USD100 billion in value. This single investment was what made Naspers the most valuable company in Africa and one of the most valuable in the world. The yearning to break free from the ‘Tencent-jinx’ is veryu compelling for a company that is very bullish but under pressure to break new grounds.