Encouraged: Naspers’s Bob van Dijk sees good prospects for satellite TV deals in Africa. Picture: SUPPLIED
Encouraged: Naspers’s Bob van Dijk sees good prospects for satellite TV deals in Africa. Picture: SUPPLIED

Naspers’s video entertainment business will be shielded from online streaming competitors across most of Africa for the foreseeable future, says the CEO of the internet holding company, Bob van Dijk.

This was mainly because affordable uncapped broadband connectivity remained "very rare" in sub-Saharan Africa, besides SA and parts of Kenya.

Naspers had recently analysed the cost of 10 gigabytes of mobile data relative to earnings across the continent.

"In several countries, it’s above or close to 100%, which means that the average person would have to spend their entire annual income to have a streaming-friendly mobile connection, which is an absurd situation," said Van Dijk.

"We will get there, I have no doubt, but it’s quite a few years out," he added.

In the interim, the lack of affordable internet provided an opportunity for the group to offer affordable satellite television packages.

Naspers said last week that despite the negative effect of weak currencies, its video entertainment business — which earns revenues in local currencies while costs are mainly based in dollars — "stabilised its losses in sub-Saharan Africa".

"Assuming no further significant currency weakness and continued momentum in subscriber growth, the group will be on track to bring the business back to profitability in the coming years," it said.

In SA, however, Van Dijk said broadband infrastructure was becoming more widespread — "maybe not as quickly as we’d like, but it’s improving" — prompting Naspers to focus on building its online products, which include ShowMax and DStv Now. "We’re quite encouraged with the user growth in both those propositions," he said, adding that rival Netflix "is in the market and doing a good job".

Vestact said in a note to clients that "ShowMax is doing nicely in SA and also has a solid presence in Poland".

Van Dijk said Naspers would remain largely focused on emerging markets including India, as these offered "structural growth opportunities".

India had overtaken the US in terms of internet users and was closing in on China’s lead. Coupled with strong economic growth, this meant "it’s an incredibly interesting market for us", Van Dijk said.

Naspers’s e-commerce investment in India, Flipkart, captured about 70% of the total online sales market during the festive season sales period, Naspers said.

The company’s payments business, PayU, was also performing well in the country.


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