After a decade serving migrant communities’ communication needs, international telco Lebara has become the newest player on the European OTT scene. Nico Franks reports.

London-based Lebara Mobile’s low-cost international calls have helped its customers stay in touch with friends and family abroad since 2001. By building its business on selling pay-as-you-go SIM cards to migrants, the company has grown to have operations in eight countries, including Australia and Saudi Arabia.

The firm is privately owned and currently has some five million customers but is aiming to scale considerably, claiming to have achieved revenue of more than €648m (US$716m) and a profit of €20m in 2011 – the last time it reported numbers.

Having attended MipTV and Mipcom in recent years to observe first-hand how the OTT revolution has shaken up the TV industry, Lebara entered the world of entertainment with an OTT service of its own last month.

Lebara Play currently offers more than 150 TV channels and 3,000 movies from around the world in 13 different languages, available to stream on mobile, computer and tablet or via set-top boxes.

The service is initially being aimed at Tamil, Turkish, French West African and English West African diaspora, while Romanian, Polish and Hindi packages will soon follow.

Among the first deals to have been signed with broadcasters were agreements with Tamil-language entertainment channels Sun TV, KTV and Adithya.

From Africa, Ebony Life, African Movie Channel and Nigerian channel Silverbird will also have their content streamed. French network Nollywood TV and Turkish channels ATV Avrupa, Euro D, Eurostar and TV8 have signed up too.

The fledgling service has also made tentative moves in the original programming space by partnering with UK prodco MTA Productions on new seasons of its sitcoms Meet the Adebanjos and T-Boy Show.

The third and second seasons, respectively, of these comedies will only be available to view via Lebara Play, a key factor in drawing subscribers to the service, which is currently available in the UK, Germany, Netherlands and France. Launches in the rest of Europe will follow by the end of summer.

Its presence in these territories means the service is up against the behemoths of the VoD industry – Netflix in particular, plus the various OTT services of local broadcasters.

Migrant audiences are not on the radars of such companies, and Lebara Play CEO Aditya Thakur argues these viewers’ entertainment needs are not currently being served by traditional channel operators either.

Accordingly, Lebara Play offers a mix of VoD and live TV programming, while the pay-as-you-go-model Lebara has employed in its communications business has greatly influenced the pricing of its entertainment service.

At a minimum of £9.99 (US$15.60) per month, the relatively high cost of Lebara Play is sure to raise eyebrows. A basic subscription to Netflix, for example, costs significantly less at £5.99.

However, Thakur defends the pricing of the service by pointing to its comprehensive offering, describing it as a “sweet deal” when you compare it to the alternatives on offer.

“As a migrant myself, I look around and I don’t have the kind of options I want. Some operators have 50% channels I want, another has 40%. I don’t see anyone giving me 100% channels that I want.”

Migrants are regularly on the move, meaning being tied into rolling contracts is not an attractive prospect. As a result, offering everything from one-off monthly packages to yearly subscriptions is key to the Lebara Play business model.

“We expect most of our business to be driven by SVoD but while we do use this model, we’re also very flexible. We’re open to the fact that people may come to us and only subscribe for a month,” Thakur says.

As an incentive, however, those who do sign up for a year only pay for 10 months.

Lebara Play also has flexible payment methods. Voucher top-ups are available at local retail outlets, payable by cash or card, while customers can alternatively top up online or in-app direct from mobile devices.

Thakur is aiming to have secured around 100,000 subscribers to the service by the end of the year, and the exec hopes an imminent marketing campaign will build interest.

One strand of the campaign is Lebara Play’s sponsorship of cricket matches between India and Sri Lanka this August, allowing it to reach Tamil-, Punjabi-, Hindi- and Bengali-speaking audiences from South Asia.

Another key element will be spreading awareness around the issue of video piracy. The foreign content business is rife with illegal players that Thakur says are charging consumers to watch content that has not been licensed.

Moreover, he says, a large proportion of migrants are assuming that because they have paid to watch a programme online, then it must be legally sourced.

“We’re putting up fairly strong legal machinery to try to tackle piracy at the back end, while educating consumers as to why they need to buy 100% legal,” says Thakur.

Meanwhile, with migration levels around the world, and in Europe in particular, expected to continue increasing, it’s likely that mainstream players will begin to take much more notice of migrant audiences.

Netflix, for example, is aiming to complete its expansion into around 200 countries within the next two years. However, Thakur believes the US giant will always primarily skew towards English speakers.

“Netflix’s core audience will always be English-speaking,” he maintains. “It’ll be interesting to see how much it intends to localise as it goes across to countries beyond the US, Europe and Australia,” the exec adds, pointing to the company’s expected launch in India next year.

“All the countries it has been in so far have been very comfortable with an all-English service. But in India it would see that demand for local movies is massive.

“Does Netflix suddenly intend to upscale from having 300 Bollywood movies to having 20,000?

“It’s going to be an interesting space over the next three years and all of us are going to keep tabs on what’s happening – not just in our territories, but in other regions as well.”