Telkom says new streaming service does not plan to compete with Netflix or Showmax

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Telkom's mobile-first streaming service, TelkomONE, is set to launch on 5 November.
Telkom's mobile-first streaming service, TelkomONE, is set to launch on 5 November.
Photo: Urbazon/Getty Images
  • Telkom has confirmed that it will launch its video streaming service, TelkomONE, on Thursday 5 November.
  • The mobile-first, youth-focused service will offer a range of on-demand content but no movies.
  • Telkom says the service does not plan to be competition for Netflix or Showmax.

Telkom will launch its new TelkomONE video streaming service on Thursday 5 November as a mobile-first, youth-focused streamer, offering a range of on-demand content but no movies. It will include a collection of linear TV channels with differently-tiered subscription levels but says it doesn't plan to be competition for Netflix or Showmax -- at least not initially.

The service provider is also hinting at the production of a new mobile data component, or "tie-in" package, making it possible for Telkom customers to watch TelkomONE at cheaper rates if they stay within the telecom's ecosystem. Subscribers on other networks will also be able to access the streaming service.

Although Telkom says TelkomONE won't be competing with the likes of Showmax and Netflix, it is jumping into the same video streamer pool in South Africa with rivals ranging from Vodacom Video Play and VIU to Apple TV+, Amazon Prime Video and some others.

More international streamers like WarnerMedia's HBO Max, Walt Disney Company's Disney+, Discovery Inc.'s discovery+ and Paramount+ from ViacomCBS could also reach South African shores in 2021. 

Still, Telkom is launching TelkomONE despite Covid-19 and a worsening economic outlook that will see consumers think even more carefully about their dwindling discretionary spending. 

Different tiers

"With the market that we're looking to target, you need to have different tiers of subscriptions. So we're definitely looking at monthly, weekly, weekend, daily pricing propositions, making it easier for the consumer using TelkomONE to spend in relation to their wallet and in relation to how they want to consume content," Wanda Mkhize, Telkom's executive for smart home and content, tells Channel24.

A big issue with video-on-demand services, especially in Africa, is that customers not only have to pay a subscription fee to access a streamer but also have to fork out cash for expensive internet service providers, with broadband penetration, speed and data costs that remain problematic.

Telkom says it is mindful to try and sidestep the failures of previous video-on-demand (VOD) offerings in South Africa like VIDI and, most recently, Cell C black, as well as the billion-dollar short-form content streamer Quibi in the United States that abruptly announced last week that it will be shutting down.

"We made sure that we understood what's been happening in the market -- some of the failures -- Cell C black, Quibi, and I think some other services that have had challenges. It's about understanding the localised market, and understanding the hard-hitting point that data is very much a key barrier in a lot of communities," says Wanda.

"For us, the TelkomONE proposition that we will be bringing, is from the understanding that it is something that is looking at content, as well as a data component -- not just the cost of data but how do we ensure efficiencies in the usage of the data that is allocated through to the customer.

"How do we ensure that we give our consumer using TelkomONE the maximum quantity out of the data that they have, and also ensuring that the content proposition resonates and speak to them in whatever it is that they are looking for to see." 

Diverse content bakery

About the types of content that TelkomONE will be offering, Wanda says: "our bakery has a variety of cakes and desserts on option. Aligned with the consumer segments that we are targeting, and as we broaden the proposition, we will have a variety of content opportunities.

"Definitely there will be some shorts. There will be some series. At launch, TelkomONE will not be having any movies. As a mobile-first proposition, we have identified it as not necessarily the best consumption mechanism but in future, as we expand the proposition, we will definitely be introducing more."

"We will have content in different languages," she adds. 

TelkomONE will be accessible through Android, iOS, as well as on Telkom's own Telkom LIT set-top-box. 

"We will also be making available a SmartTV app, so if consumers have an application, it will be made available," Wanda tells us.

"We are also not a locked-network service. As much as we would have preferential data offerings for our Telkom subscribers the service will be open to everyone, even those not on the Telkom network -- so even if you're not on the network, both fixed and mobile, you can still get access to TelkomONE.

"This is really an opportunity that we've seen for us to expand this aggregation relationship or strategy that we've started because this is just the start.

"We will be adding on new partners, as well as new services that are new to South Africa as well just to further broaden the appeal and to broaden the offering that is available to South Africans in the content space."

Not competing with Netflix or Showmax

Similar to what Cell C black did, TelkomONE will stream a collection of linear TV channels, enabling people to view content as they would on their TV set but through the internet using a mobile device.

"The type of market that we are targeting is not necessarily a youth segment who's been on digital platforms only. We don't see ourselves as competing against Netflix or MultiChoice's Showmax. We're looking at a different consumer set, and understanding that a lot of the customers that we are targeting, there's still a need for linear television."

"Linear TV is never going to die," says Wanda. "I've been in the over-the-top (OTT), and VOD space and as much as I sit down and I love the opportunity to find a programme that I want, I can sit for a good half an hour trying to find something and end up back at linear television.

"We want to give our consumers that opportunity and that choice to be able to -- if there's something news or current affairs related, and they want to engage with that, as well as some other linear TV content that may be of interest, to actually be able to access that content. We want them to also eat and catch-up as much as they want, from what they want, from the VOD section."

When it comes to the number of linear TV channels that will be available, Wanda won't reveal that information just yet, but says they have "been working with a number of suppliers" and are "finalising everything".

Young and mobile

"From early-2015 and eventually the launch of our Telkom LIT propositions we've been working as a super-aggregator, looking and working with other content and content platforms and OTT providers to enable our subscribers to better access these rich video platforms and to get the entertainment and services that they want," says Wanda.

"Having worked with a lot of these content providers, we identified that there was definitely a gap in the market. There are propositions focused on your higher-end customers; a lot more international-content focused, and much more of a lean-back, fixed-broadband type of propositions.

"We identified that there is definitely a need for a mobile-first platform that really services the customers where we've really seen the biggest growth in South Africa and Africa as a whole which is the mobile consumer, and the mobile consumer using data within that space, and also youth-focused.

"We see mobile and the youth and a content proposition put together to service this market as the TelkomONE focus. It's also about local content, and the question is, how do we make sure that we find the right content to deliver to that market that we want to attract? How do we find localised content made for mobile?"

To help in this process, TelkomONE is running a competition until the end of November asking South Africans to send in their ideas, and video examples of anything from lifestyle shows to short-form telenovelas that it has dubbed "mobivelas".

"Mobisodes and clips are happening within the space of YouTube but not as a service that is looking at creating it from an episodic perspective and focusing on the youth market. So we really want to find that localised content that really is made specifically for TelkomONE as a platform," Wanda says.

"The question is also around how do we start to create these new content value-chains? Traditionally our broadcast value-chain and market has been your big-ticket production items like your Muvhango on SABC2, Generations on SABC1, The Queen on Mzansi Magic.

"However, there are a lot of young up and coming creative people who have thought about creating something but haven't necessarily thought that they are 'creatives' and getting into the industry. TelkomONE wants to create opportunities and give them a platform on which they can bring their youth-focused ideas."

About why Telkom is launching TelkomONE now, during a tumultuous year marked by the global Covid-19 pandemic, instead of in 2021, Wanda says: "We want to end the year with a bang; we think there are a lot of opportunities. It's been a tough year. Just launching with something new and fresh to close off the year is really an exciting opportunity for us."

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