Telkom Drops Netflix: South Africa Streaming Update

Telkom Discontinues Netflix Offering in South Africa

Telkom SA SOC Ltd, a leading telecommunications provider in South Africa, ended its provision of Netflix Inc. through its phone and internet set-top boxes beginning in October. This information was initially reported by Bloomberg.

Partnership Conclusion

Wanda Mkhize, Telkom’s Content Executive, confirmed the non-renewal of the partnership in an official statement. However, further specifics regarding the decision were not disclosed, as reported by Bloomberg.

Despite attempts to secure additional commentary from Telkom, a response was not immediately available. Ms. Mkhize did indicate, in a separate discussion, that Telkom is investigating alternative methods for customers to access Netflix, potentially through a dedicated set-top box.

Netflix's African Expansion Strategy

Over recent years, Netflix has actively sought opportunities for expansion throughout Africa, aiming to increase both its subscriber base and overall revenue. It remains uncertain whether the company will develop new distribution channels to reach consumers and current subscribers in South Africa following the termination of its agreement with Telkom.

Recently, Netflix introduced a free, ad-supported plan for Android mobile phone users in Kenya. This plan provides access to approximately 25% of its available TV shows and movies.

Localized Content Initiatives

In an effort to attract and retain subscribers across the African continent, Netflix is increasingly featuring locally produced content. Examples include South Africa’s “Queen Sono”, Kenya’s “Sincerely Daisy”, and Nigeria’s “Two weeks in Lagos”.

Market Potential in Sub-Saharan Africa

Netflix is targeting the 303 million individuals in sub-Saharan Africa who are connected to mobile internet, representing roughly 28% of the region’s population, according to the 2021 GSMA mobile economy report.

This number is projected to rise to approximately 40% by 2025, creating a larger potential market for internet-based services like Netflix.

Growth Enabled by Improved Infrastructure

The increasing availability of affordable and faster internet access across the continent has facilitated the growth of video streaming services, including Netflix and Amazon.inc.

Remaining Partnerships

Netflix maintains an existing partnership within South Africa with MultiChoice Group Limited, the largest pay-TV provider in Africa. MultiChoice now incorporates Netflix and Amazon.Inc into its paid video service offerings, following agreements finalized in the previous year.

This strategic move is intended to bolster MultiChoice’s subscriber retention and strengthen the competitive position of its own streaming service, Showmax, which was launched in 2015.