MTN Group is Africa’s largest telco, and it’s making a big bet. It believes that by entering the capital-intensive, crowded world of video streaming, it can turn its financial fortunes around. On April 7, the telco Synamediais a global software provider that offers video streaming services. Together, they have developed a new streaming service for mobile and broadband users in Africa. This move aims to promote digital inclusion and improve content accessibility. It’s a high-stakes bet that could worsen MTN’s financial problems instead of alleviating.
MTN reported a combined loss after tax of $398 million over the past two year, prompting it to look for other revenue sources outside its core telecom services. Streaming is an expensive business, particularly in Africa. To gain traction on a market that is already saturated, it requires significant investment in infrastructure, licensing content, content delivery networks, as well as aggressive customer acquisition strategies.
The track record of the industry on the continent also isn’t encouraging. In South Africa, Film and Publications Board revealed that at least six local platforms have closed down due to high costs and limited market access. Major telecom players have also left the market elsewhere on the continent: Airtel TV’s TelkomOne, Vodacom Video Play and Cell C Black all closed within the last year. BritBox, an international platform, announced in August 2024 that it would cease operations in South Africa due to underperformance. Netflix and Amazon Prime Video are reducing investment in Nigerian original content.
Competing against global streaming giants
MTN’s new streaming service faces stiff competition from established platforms such as Netflix, Amazon Prime Video and Showmax that have already carved significant market shares on the continent. These platforms have massive content libraries, global networks of distribution, and deep pockets, which MTN does not.
Netflix spent $16.2 billion globally on content in 2024, and continues to invest locally in African content. It launched its first African-produced series in 2019, and has since added titles in languages like Yoruba and Swahili. Amazon, which invested $18,2 billion in 2024 has also made significant inroads into African Content, with several original productions focusing on Nigerian and South African tales. Showmax, backed up by MultiChoice and NBCUniversal recently underwent a major overhaul with support from Comcast. It now positions itself as a hybrid content platform with local relevance. MTN’s entry into streaming will need more than a flashy debut. It will have to invest consistently in engaging content, user experience and reliable delivery, without the benefits of economies of size that its global competitors enjoy.
Get all the best African tech news delivered to your inbox.
Content and connectivity costs
Creating a streaming platform is expensive. MTN’s costs will remain high even with Synamedia’s cloud-based tech, which allows for scalability, personalized content delivery and scalability. These include licensing local content and international content, promoting the platform, and subsidizing internet costs in regions with limited internet affordability.
In countries like Nigeria, South Africa and Ghana, where mobile internet is still relatively costly for the average consumer, streaming services struggle to gain mass adoption unless heavily subsidised. MTN could be forced to bundle its streaming services with data incentives. This would further erode its margins.
Content that resonates with the local audience is also essential for success. MTN has committed to localizing content for each market, tailoring programming according to specific cultures, language, and viewing habits. This is a good strategy, but it will also require negotiating multiple licensing agreements and funding original productions. This can be a costly undertaking for an already-losing company.
Monetization Risks for streaming
This platform will rely upon multiple revenue models, including subscriptions, ads-supported content and free channels. These options offer flexibility, but they also come with risks. Subscription fatigue has already become a global problem, and consumers in Africa — where disposable income is low — are especially wary of monthly recurring charges.
Ad supported streaming, on the contrary, requires a large audience to attract advertisers. Digital advertising in Africa is growing but still underdeveloped when compared to Western markets. MTN must build a platform of millions of users to generate meaningful ad revenues. This could take years, and the revenue may not be enough to cover the costs of operating the service.
Strategic play or risky diversion?
MTN’s pivot to streaming is part of a larger strategy to diversify and leverage its massive subscriber bases across Africa.
Selorm Adadevoh Group Chief Commercial Officer of MTN Group said in a press release that “we see a unique chance to transform video consumption across Africa with high-quality content, accessible and relevant.” This partnership allows us to leverage cutting edge technology and deep customer insight to enhance entertainment experiences, and drive digital inclusion.
MTN has an audience of over 280 millions users in 16 markets. Building a successful streaming business requires more than just reach. It also requires sustained investment, excellence in content, and strategic focus.
Synamedia CEO Paul Segre said that MTN would be able create a new set of offerings, which will drive new revenue, by leveraging the breadth and depth of its integrated, cloud-based platform to deploy new services quickly at scale.
Another question is whether this move will distract from MTN’s core business, especially as it faces pressures from inflation, currency devaluation and regulatory hurdles across several markets.
Final Thoughts
By making streaming more accessible and localizing content, MTN will join other local and international services in democratizing entertainment. The road ahead is not without its challenges. MTN’s streaming bet could cost the company a lot of money. It may also prove difficult to recover if the platform fails to gain traction.
The margin for error in a company that is still reeling from multimillion-dollar losses is razor-thin.
