Serial entrepreneur Strive Masiyiwa has announced plans – through Econet Global – to launch a pay TV service known as Kwesé TV, which will offer exclusive sports and entertainment programming to African markets.
The newest venture, which has been in the pipeline for three years, will see Econet Global competing with Multichoice, owners of DSTV, who have dominated the pay TV service since 1995.
“You may know of other companies in this market, most of which either provide content that’s far too expensive, or content that’s just so bad it's not worth paying to see it, even if it’s cheaper.
We know you understand what the problem is. And I believe my team has developed an exciting product which will change that dynamic,” said the billionaire on his facebook post before adding that Kwesé TV’s success will depend on their ability to acquire and also to develop new, high-quality and unique programming at an affordable price.
Dr Masiyiwa said that "Kwesé" means "everywhere" and “anywhere" signalling their intention to penetrate the African market as a whole in a similar manner to MultiChoice’s strong footprint across Africa.
It won’t be the first time a company tries to wrestle Multichoice for the pay TV market share. In 2010, On Digital Media, owners of StarSat pay-TV service was expected to give DSTV serious competition through their TopTV service but the business has since floundered and it’s languishing under a business rescue process.
Multichoice’s lack of credible competitors has made the company a target of criticism for being a monopoly as it controls 98 percent of satellite TV in Africa. Furthermore, DSTV has taken some flak for continuously increasing prices without much improvement on the content they are offering, often accused of airing too many repeats.
But Multichoice continues to be a money spinner for its parent company Naspers. Multichoice reported in its 2015 interim financial results that its group revenue increased from R15.1 billion to R17.1 billion, while its core headline earnings grew from R3.2 billion to R3.6 billion over the past year. DStv’s subscriber base in South Africa also grew from 5.1 million to 5.5 million homes year-on-year. In total, DStv has more than 8 million subscribers across Africa.
However, Econet Wireless might prove to be Multichoice’s most formidable competitor yet. According to Masiyiwa, Kwesé TV will be built around Econet’s core capabilities of satellite communications, fibre optic networks, and mobile services.
Econet is a privately held diversified telecommunications group with operations and investments in Africa, Europe, South America, North America and the East Asia Pacific Rim, offering products and services in the core areas of mobile and fixed telephony services, broadband, internet, satellite and fibre optic networks.
Econet was founded in 1993 by Strive Masiyiwa, who first came to international prominence when he fought a five-year constitutional legal battle leading to the removal of the state monopoly in Zimbabwe’s telecommunications sector. The landmark ruling is regarded as one of the milestones in the opening up of African telecommunications to private capital.
Econet subsidiaries include Econet Wireless International, Econet Wireless Africa, Econet Wireless Global, Econet Enterprises and the Liquid Telecom Group.
But Billy Sekgororoane, Managing Director of Multichoice Botswana, is not a worried man. “We welcome competition as we believe that it benefits the broadcasting and production industries, it can also contribute to diversification of economies, the growth of local production industries and a pluralism of services to customers. Ultimately television viewers may benefit through the additional volume and variety of content that will be distributed by various operators in the market.”
On the issue of Multichoice’s monopoly on the Pay-TV market, Sekgororoane says that couldn’t be farther from the truth. As a matter of fact, Multichoice’s view is that competition in a market stimulates growth, which in turn stimulates the industry and when that happens, the industry in Africa will grow and branch out into the rest of the world. “That is the position that Multichoice wants to be in. Multichoice is, therefore, not a monopoly and does not encourage monopoly in any way,” He remarked.
While consumers might hope that the imminent competition between Kwese TV and DStv will result in competitive prices, Sekgororoane points to a tough trading environment and has defended Multichoice’s annual price increases as borne out of survival than pure profit making.
“Subscription price increases generally occur every year in April, at the beginning of our financial year. These are necessitated by increasing input costs. Multichoice Africa’s cost structure has various input costs, which include staff costs, technical infrastructure costs, satellite lease costs, facility cots, marketing and programming costs.
In determining the price increases Multichoice takes into account many factors including, and amongst other things, current inflation, impact on subscribers, efficiencies that may be effected in the company that may offset the necessity for a price increase. Unfortunately, it is necessary to effect price increase due to the ever rising costs to the business.”
He however explained that Multichoice has various packages that will appeal to different consumer segments depending on what they can afford. Multichoice offers a variety of bouquet options on its DStv service, from basic to premium services. “The range of DStv packages allows subscribers flexibility in price (from P105.00 to P610.00 per month), and choice without compromising quality and variety. Subscribers are able to choose any bouquet of their choice depending on affordability and needs” said Sekgororoane.
Pay TV revenues in Sub-Saharan Africa will reach $6.22 billion in 2020, up from $3.54 billion in 2014 and $1.92 billion in 2010, according to a new report from Digital TV Research released in January 2015. The fourth edition of the Digital TV Sub-Saharan Africa report forecasts that South Africa and Nigeria will contribute more than half of the region’s pay TV revenues by 2020 for the 34 countries covered. Second-placed Nigeria will more than double its revenues from $449 million in 2014 to $1,148 million in 2020.
Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.
In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.
The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.
With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.
Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.
BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.
During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.
BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.
As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.
In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.
BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.
The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.
BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.
Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.
According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).
With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.
In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.
Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.
The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.
The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.
The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.
In the latest June 2022 global economic prospects, released last week the World Bank has warned that low global economic growth and economic activity in global commodity markets such as China and Europe could negatively affect export revenues for Botswana and other Sub Saharan countries.
Recent data from Statistics Botswana show that Botswana’s exports destined to the global markets such as Asia and the European Union (EU) on monthly basis accounts for around 60.1 percent and 20.1 percent respectively.
The World Bank last week lowered its 2022 projections of global economic growth and indicated that the new forecasts could be bad news for countries like Botswana who are dependent on export mineral revenues. The Bank noted that just over two years after COVID-19 caused the deepest global recession since World War II, the world economy is again in danger and stated that this time it is facing high inflation and slow growth at the same time.
In the recent June projections, the bank lowered its forecast of global economic growth from the January 4.1 percent to 2.1 percent. “Our June forecasts reflect a sizable downgrade to the outlook: global growth is expected to slow sharply from 5.7 percent in 2021 to 2.9 percent this year. This also reflects a nearly one-third cut to our January 2022 forecast for this year of 4.1 percent,” a team of World Bank economists noted in the June 2022 Global Economic Prospects.
The World Bank indicated that exports from Botswana and other Sub Saharan countries could suffer from a substantial deceleration of activity in China and Europe. The Bank noted that exporters of industrial metals, crude oil, and ores such as Angola, Democratic Republic of Congo, Republic of Congo, South Africa, and Zambia could suffer from a substantial deceleration of activity in China.
On the other hand a sharp contraction of growth in the euro area could hurt exporters of agricultural products such as beef, coffee, tea, tobacco, cotton, and textiles from Botswana, Ethiopia, Madagascar and Malawi. “The faster-than-expected deceleration of the global economy and increased volatility of commodity prices could hurt many SSA commodity exporters,” said World Bank President David Malpass.
Malpass indicated that subdued growth in the global markets for Botswana and other Sub Saharan exports will likely persist throughout the decade because of weak investment in most of the world.
He noted that with inflation now running at multi-decade highs in many countries and supply expected to grow slowly, inflation could remain higher for longer than currently anticipated. “Even if a global recession is averted, the pain of stagflation could persist for several years— unless major supply increases are set in motion. Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely,” said Malpass.