Kagan: Nigeria overtakes South Africa in pay TV subscriber numbers, to lead continent

Nigeria has become the largest pay TV market in Africa in terms of subscribers and continues to have a strong growth potential, according to the latest country profile report from Kagan, S&P Global Market Intelligence.

Julija Jurkevic, senior research analyst at S&P Global Market Intelligence, says: “Although ARPUs are much lower than in South Africa, leading to lower revenues- Nigeria may increasingly be an investment focus for operators due its size (22% of all African TV Households are in Nigeria), low TV household penetration and rapidly growing middle class segment that has disposable income for entertainment services.”

The report finds that strong growth of affordable pay-DTT services allowed Nigeria to overtake South Africa as the continent’s largest pay TV market in 2015, penetration and revenues remain behind.

At the end of 2017, Nigeria accounted for 29% of Africa’s multichannel subscribers and 22% of TV households. Kagan estimates that by the end of last year, Nigeria’s multichannel market had over 27 million TV households and almost 7 million pay TV subscribers, equating to a 9% year-over-year increase. Household penetration, however, remains low reaching nearly 26% in 2017 (compared to over 50% in South Africa), while multichannel revenues equaled $835 million, translating into a monthly ARPU of $10.45.

Nigeria’s multichannel market is projected to add 8.7 million subscribers reaching close to 16 million by 2027, equating to an 8.4% CAGR. TV household penetration is projected to reach 39% in 10 years, while multichannel revenues are modelled to breach $2 billion by 2027 remaining behind South Africa.

Pay DTT overtook DTH in terms of subscribers in 2012, becoming the leading multichannel platform, as the service is positioned as a more affordable alternative to DTH with the lowest ARPU among all multichannel platforms, estimated at $6.39 in 2017. At end-2017, Kagan estimates, 60% of Nigeria’s TV homes subscribed to pay DTT services, while DTH had a 34.8% share, with the remainder attributable to fixed wireless services. Growing at an 8.6% CAGR through 2027, pay DTT is projected to remain the leading multichannel platform with a 61% market share in 2027.

DTH is the most lucrative multichannel platform accounting for nearly 60% of the market’s total multichannel revenues in 2017. Pay DTT follows, despite being the largest by subscribers, accounting for 34.8% of the total video service revenue.

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