Liquid Telecom makes major strides in local content

By Rebecca Wanjiku

Africa’s consistent investment in ICT infrastructure and an uptake of e-government services has allowed Liquid Telecom to increase local content passing through its network to 50 percent.

Three years ago, only 20 percent of the content carried by Liquid in East, Central and Southern Africa was local. In the next few years, the regional operator expects to reach the 80 percent target set by the Internet Society.

“Three years ago, we had 20 percent local content in our infrastructure, this year, we have 50 percent, a 10 percent increase every year. This shows its is possible to achieve 80 percent local content,” said Ben Roberts, Liquid Telecom Kenya CEO and CTO of Liquid Telecom Group.

Roberts expects the overall local content in Africa grow, with video playing a major role in the demand for increased bandwidth. He projects that the demand for online streaming services will increase, as has been shown by the expat and local community in Kenya, that has found a way to bypass internet blockage and get services from companies such as Netflix.

“Netflix doesn’t offer services in Kenya, but it doesn’t mean that Kenyans cannot access services. Some people are using Virtual Private Network (VPN) services to access content on Netflix, this shows there is demand for video services, which will drive up the demand for higher capacity,” added Roberts.

In January this year, Netflix indicated its intention to grow globally to 200 countries. Netflix CEO Reed Hastings and CFO David Wells made the statement while announcing Q4 2014 earnings.

“We already offer Netflix in about 50 countries and have learned a great deal about the content people prefer, the marketing they respond to and how to best organize ourselves for steady improvement. Acceleration to 200 countries is largely made possible by the tremendous growth of the Internet in general, including on phones, tablets and smart TVs. We intend to stick to our core ad-free subscription model. As with our initial round of international expansion, we’ll get some things wrong and do our best to fix them quickly,” the statement said.

Africa has had a burst in growth of video production, spearheaded by Nigeria, Ghana and South Africa. Although these local productions target Africans in diaspora, with availability of affordable bandwidth, local audiences are expected to rise.

Nigeria’s iRokoTV, Pana TV and Ibaka TV are probably the most popular online but Bozza and Wabona have also been growing their audience online. A UN report estimates that Nollywood injects about $500 million to the Nigerian economy.

Roberts identified piracy and lack of enforcement of Intellectual Property laws as a major hindrance for companies interested in investing in streaming services; whether local or international.

“If you can get the latest Hollywood movies at a cost of a dollar in downtown Nairobi, it becomes hard to convince one to pay five dollars to stream the same movie, this points to a weak IP law enforcement, which can kill business,” said Roberts.

Roberts notes that an increase in local productions at whatever quality and level will help grow the demand for video, while stricter laws and enforcement of international IP laws may discourage people using VPNs to bypass restrictions imposed by streaming providers.

Regarding growth plans in the region, Roberts said that each country is adopting country specific customer care services to ensure better delivery and client satisfaction. Given that different countries offer various levels of infrastructure services, Roberts said it would be hard to have one approach in all the markets.