Is MTN Group in talks with Naspers to acquire Multichoice Africa?

Could MTN Group – the South Africa-based telco with operations in 20 countries covering Africa, Europe and Asia and serving over 200 million subscribers – be thinking about diversifying its service portfolio to include video entertainment through the acquisition of Multichoice Africa business?

Speculation is rife that this might be true, with media reports this week stating that “MTN is in discussions regarding a potential acquisition of MultiChoice Africa.”

“MTN has punted the idea of a diversified revenue stream through digital and entertainment services in recent years, and as part of this play it appointed its former head of strategy, Stephen van Coller, as the new head of digital… MTN is already in discussions with MultiChoice about providing TV entertainment on smartphones, and according to sources, the network operator is now in talks to acquire MultiChoice Africa from Naspers,” stated MyBroadband in article published this week.

The article, which didn’t quote any sources from either Multichoice, Naspers or MTN noted that “Traditional pay-TV services, like DStv, are under pressure from online streaming services like Netflix and ShowMax,” adding that “this means that a big Internet player like Naspers may want to exit MultiChoice Africa, which relies on a more traditional business model.”

Multichoice Kenya executives avoided being drawn to discussing the issue of a possible sale, with both Kenneth Oyolla, the firm’s Commercial for East Africa as well as Philip Wahome, the Multichoice Kenya PR manager, all declining to comment.

MultiChoice Africa, founded by Naspers in 1996, currently provides video entertainment to an estimated 5 subscribers based in 49 African countries and Indian Ocean islands through brands such as DStv, Box Office, Catch Up, DStv Now and AMGO.

In 2015, Multichoice Africa’s parent company Naspers launched ShowMax, an internet-based subscription video on demand (VoD) whose content is is accessible via range of devices from smart TVs and computers to smartphones and tablets.

Many are those who saw the launch of Showmax as a direct affront by Naspers against its other subsidiary Multichoice as the two brands basically target the same market – that is video content consumers – in the countries where it has operations.

Multichoice has however been  quick to dispel such arguments, stating that the two brands are different in both content offering as well as mode of delivery. This may be partly true because whereas Showmax delivers purely entertainment, Multichoice’s offering goes beyond entertainment – TV shows and movies – into new due to its partnership with TV broadcasters.

But we still believe the two brands – Multichoice and Showmax – are focusing on and targeting the same consumer. Consider the following: you can watch both Multichoice and Showmax content on smart TVs, both are available via mobile and Explora devices, both can be accessed after installing their respective mobile apps and you can stream content from both brands when you’ve an internet connection.

Apart from Multichoice Africa and Showmax, other Naspers entertainment brands include GOtv, MNet, DStv, SuperSport, DStv Online and DStv Media Sales.

Of late, Naspers has been investing in and acquiring stakes in several e-commerce and fin-tech companies and startups including Delivery Hero – a Germany-based online food delivery firm, TakeAlot of South Africa and FlipKart of India, Coins – a Philippines-based blockchain technology startup, and PaySense of India among others.

The focus of the firm’s new investments and acquisitions is what may have led many to speculate and even believe that its shifting its sights from video entertainment to other areas.

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