24 January 2014

Ghana's Blu Pitches Content As the Show-Stopper for Its New LTE Service

London — Ghana's mobile operators are in danger of being outmaneuvered by the new breed of LTE licencees. The newest kid on the block is Blu which is making content and VideoOnDemand a central part of its service offering. Russell Southwood spoke to its Chief Commercial Officer, Tara Squire.

Ghana's regulator auctioned off three packages of LTE-usable spectrum and the winners were all independent, locally-owned ISPs: Blu, Surfline (which will also be launching shortly) and Gold Key. Blu's key investor is local Ghanaian businessman J.K.Horgle (he runs a transport company) who has backed the "young Turks" who make up the company's management team. The investment so far is "in the tens of millions of dollars" and the equipment has been supplied by Huawei. It will operate in 2.6 Ghz.

Squires says that:"Content is the cornerstone of what we're going to do." He doesn't want to give too much away but says that they are looking at both local and international content:"We're speaking to the biggest houses in Ghana and 1-2 international companies. There will also be a user-generated portion of the portal."

It is not hard to guess that Ghanaian movies, music and sport will be high up on that list. They will also be supporting education initiatives that are supplying video material:"Entertainment and education are both very important to Ghanaians."

When pressed, he made clear that they are setting out to be Ghana's first fully functioning VoD portal:"In terms of content, there are areas that are pain points for Ghanaians: how to access the internet at the right speed and how to pay. We're going to make both very easy whether online on a laptop or computer or mobile phone. There's a number of existing payment channels that are close to the tipping point and we're going to use those."

In terms of pricing, their philosophy is to match exactly the current 3G prices but to provide a significantly faster service. The service will be sold both as bundled capacity and an unlimited monthly service. The current cheapest 3G data bundle is US$4-5.

It will guarantee a speed of 6 mbps:"This will revolutionalise the market as the current average speed is 512 kbps." Coverage will be Accra and then rolling out nationally to other major centres. The terms of the licence say that once it has reached a near national level of coverage, it will be able to do voice:"It will be an add-on at some point. Customers will be able to use Skype as the licence requirement only covers interconnection... But we see ourselves as a mainstream telecom provider, meeting the full spectrum of telecoms needs."

They are also pitching the service to the Small and Medium Sized Enterprise (SME) market:"We'll be providing various value-adds for SMEs online in one space, simple things in Google's pack of tools for business planning and web design."

The potential mobile competitors have not made LTE announcements and all appear to be looking at HSDPA+ as their next upgrade. So they may not be direct competition for a while yet but Blu will have to contend with the other two LTE licencesees. So how many subscribers do they think they will have by the end of year one?:"100,000 would be a decent figure."

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