London-based Gateway Communications is set to challenge Johannesburg-based pan-African paycaster Multichoice’s monopoly in the English pay TV market in sub-Saharan Africa with the launch of a lower-cost satellite service.
Gateway said last week that it would start launching GTV in Kenya, Tanzania and Uganda in East Africa and Zambia, Zimbabwe and Malawi in the south beginning in the middle of the year, targeting customers who could not afford Multichoice. It would not initially enter the more developed South African market, where Multichoice already faces a new challenge this year as the pay TV market it has long monopolized opens up to new players.
Julian McIntyre, Gateway president and GTV founder, said it would be offering 15 channels with an entry price of about $20. Multichoice’s entry-level subscription package costs about $30 but it offers more than 50 channels to its nearly 1.4 million subscribers, of which 420,000 are from outside South Africa.
Gateway said GTV would carry international channels as well as an inhouse entertainment and movie web and two sports nets. Most of the content would be in English, but the company also hopes to win soccer-mad subscribers in French- and Portuguese-speaking Africa with a focus on live sports.
McIntyre said the African market had been artificially constrained by monopoly pricing and non-relevant content and there were huge opportunities on the continent to companies offering the right pricing and programming.
Gateway was banking on major growth in demand for pay TV services in Africa, forecasting the market would be worth $3 billion by 2015 as the basic TV market grows 10% annually. Only 1% of TV-owning households in sub-Saharan Africa subscribe to pay-TV services, compared to 15% in Eastern Europe, 36% in Western Europe and 93% in North America, he said.
In the longer term, Gateway hopes to offer pay TV on cell phones on the continent, which has a booming cellular industry, although it would probably take five years before the technology is sufficiently developed.