The Kenyan government, in an effort to encourage the use of digital television broadcsating, has waived taxes on the gadgets that convert analogue frequencies to digital, better known as Set-top boxes. The measure was introduced on Thursday during the reading of the country’s 2012/2013 budget.
The broadcasting industry ha been lobbying for the zero-rating of the gadgets which are vital in the uptake of digital TV. Majority of Kenyans currently possess analogue TV sets which would be obsolete once digital broadcasting era comes to reign.
June 2015 had been set as the cut off date for analogue broadcasting through an agreement of United Nations’ International Telecommunication Union (ITU). The country is currently on pilot migration and targets to completely switch over by 2013 ahead of the deadline. The earlier deadline set by the country had been 2012 but it was shifted forwards due to unforeseen challenges.
The Communication Commission of Kenya, CCK, the country’s industry regulator, cited low consumer awareness and expensive Set-up boxes as some of the barriers to uptake by consumers. Communication Commission of Kenya is planning to license 168 operators in the Pay TV sector, of which Digital Satellite Television( Dstv) is currently dominating. According to the regulator, the licensing of the new providers would be done under the new digital broadcasting regime, which comes into evistence to replace the old analogue platform.
The high operation cost is partly the reason for the dominance of Digital Satellite Television (DSTv) and downfall of Gateway Television(GTv), a new entrant in the sector, which collapsed in 2009. The new provider collapsed as a result of the financial and global crisis which dented the company’s ability to secure further funding needed for the continued running of the business.
According to a study on competition which was done by the CCK which was released three months ago, the granting of exclusive content rights was cited as a reason for stiffled competition in the Pay Tv segment. As per the results of the study done by Deloitte, the Free To Air Tv market is not fully competitive especially in terms of of viewing share. The roll out of digital platform is expected to heal the non-competitiveness through increase in capacity thus reducing entry barriers in the market. The study recommended the following:
- That spectrum should be recalled from those licensees who have no plans of utilizing it and be re-assigned in a competitive and transparent manner to other applicants.
- That the regulator should make it clear to the industry the required number of broadcasting signal distributors to be accommodated in the available Tv spectrum, and the number of frequencies that a licensed signal distributor is entitled to.
Dstv has been enjoying the exclusive rights it holds on key content such as the English Premier League, La Liga, Bundesliga, Italian Serie A a the French Ligue 1. This has enabled the company to attract a following of almost three million subscribers in various African markets.