Econet is anticipating value creation and growth from fledgeling services that include the new pay TV startup, Kwesé TV.
In a statement published after its results announcement the operator’s CEO Douglas Mboweni highlighted how Kwese TV would enable the operator to deliver services in media and entertainment to subscribers while “creating further headroom for value”.
As an Over the Top service Kwesé TV represents an ideal investment for a future business model for telecoms.
Rather than just act as a dumb pipe carrying content, services like Video On Demand (VOD), digital media platforms and e-commerce solutions give telecoms operators a stake in the content that rides atop their infrastructure while carrying more value.
Kwese TV has been placed in the media and e-commerce subset, one of the four clusters outlined for Econet’s “Quad Play Transition”.
Other investments grouped in this subset cover online retailing, digital media content and online education – references to services launched in the past year namely Ownai and Ruzivo Digital Learning.
All these are still in their formative stages, but the prognosis is that they will blossom into revenue drivers that can eventually offset the strain carried by the death of voice revenue.
Who owns Kwesé TV?
What’s a bit off, though, is how Kwesé TV is now being placed at the centre of Econet Zimbabwe’s strategy yet in the past, it has always been identified as part of Econet Media which is an Econet Wireless Group investment.
Does Econet Zimbabwe have a stake in Kwesé TV or it was just a way to pacify shareholders in the face of another huge drop in profits and revenue?
If Econet Zimbabwe does own Kwesé TV does this mean that the operator will be pouring its own capital into the internet TV startup and has it done so for the other licencing deals inked by Kwesé TV?
Is Econet Zimbabwe geared to make multi-million dollar investments that are characteristic of plays into video content and will it be able to scale across Africa against other media companies like Netflix and Naspers?
If the service is tucked under the Econet Group but is now being positioned as part of Econet Zimbabwe’s future plans will the operator create maximum value for shareholders by championing the growth of a service that it owns or is this benefiting the Econet Group instead?
We sought clarification from Econet Wireless Zimbabwe regarding this relationship and are yet to get feedback.
Without all the necessary information any sort of conclusion would largely speculative and the Kwesé TV arrangement between Econet Wireless Zimbabwe and the Econet Group remains is opaque.
In any case, the move to make content services part of Econet Wireless Zimbabwe’s future should be lauded. There are still a lot of aspects around how this will be executed that deserve attention but it shows that there is a look into the future.