Less than a year ago, MTN, Nigeria’s largest mobile carrier by subscriber base and revenue*, announced that it has received a broadcast licence from the National Broadcasting Commission, NBC for NGN 34 billion. The company has just launched- MTN Mobile TV
It seems the company is ramping up its efforts to get the service up and running for the market. Punch newspaper claimed the company spent additional NGN 25 billion investment to build the system that will power product’s backbone.
However, its mode of execution and point of access will be mobile, the main reason it is called- MTN Mobile TV. It is also very surprising and unique as customers will be accessing the content via platforms they are already used to.
Customers will be accessing MTN Mobile TV via Over-the-Top, OTT platforms like WhatsApp, BlackBerry Messenger, Facebook and Twitter, among others. It would be recalled that MTN and other mobile carriers have been wailing over plummeting revenue lost to low data-consuming OTT apps such as WhatsApp and other mentioned above. The strategy to make MTN Mobile TV available via OTT apps is not a bad one then since customers will have to pay for each content and or subscribe to specific bundles.
On the company’s website, 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.”
MTN stated emphatically in its FAQ that “The Mobile TV service cannot be used on a computer Desktops, Laptops and Windows Operating System (OS) mobile devices currently. All other Smart phones can use the service.” The service already has basic, standard and premium packages.
Taking a critical look at the rates, MTN Mobile TV might not be targeting the mass market. Basic subscription is charged at NGN 350 for just 75MB. By data calculation, this would hardly stream 20 minutes of video in relatively a clear quality. Premium subscription for NGN 2,500 would only give a customer 500MB. This cannot stream 5 episodes of 50 Cents’ Power TV series.
The cons of this approach are enormous and could determine if MTN will make anything out of this project. First is the point of access. It is restrictive and could be counter-productive. Second is the pricing and mode of pricing. It is expensive and may not cut the market. For an investment of 59 billion, MTN needs to rake in money fast and it cannot do it with a slow subscription growth. MTN has since joined the demarketing war to further cut mobile subscription rate, why would anyone pay more to watch TV on their mobile if they have alternative? Third is the barrier to entry. It is not encouraging. The fact that customers have to pay for a data plan before paying again for MTN TV is a big decision to make with scarce resources in these hard times.
Was is it possible for MTN not to be competing with the likes of DSTV/Multichoice, StarTimes, ConSat and GoTV? Its strategy might be an open platform with 0ver 50 million customers and it would not need to worry about content. It might just be sharing back-end subscription or distribution fees charged directly to customers with content and payTV companies.
However, it seems the above scenario might not be logical giving the circumstances leading to the creation of MTN Mobile TV. Why would MTN spend NGN 59 billion just to help the likes of DSTV distribute content?
Moreover, PageOne thinks all these strategy above might not work well for MTN. The company would open itself for more attack from competition by going through any of these route. What we expect is a multi-channel, multi platform and multi-service approach. For example MTN would make the service available across multiple devices. Mobile, PC and tablet. The company should have its own TV set up box that can play multiple roles. A Wifi device, a TV decoder and voice call enabled. Customers can then choose how they want access MTN’s service. While all these cannot be rolled out at once, the decision to start with OTT apps might not catch the market not disrupt the market.
In all of these scenarios, the market is always right. It will be interesting to see how customers react to MTN’s new ‘eureka’ product.
*MTN is the only mobile carrier in Nigeria quoted on the Johannesburg Stock Exchange, JSE.