Kenyan TV begins the long journey to going digital


Kenya's long journey to digital broadcasting has begin in Nairobi amid concerns that the high pricing of set top boxes will prevent millions of viewers from migrating to the new and clearer transmission platform.

TV owners say the cost of the boxes - the equipment that enables analogue TV sets to receive digital signals - has risen by large margins since the government issued specifications for the recommended brands, putting the set top boxes beyond the reach of many homes. But dealers reckoned that the low uptake of the boxes has made it difficult to cut prices without hurting their margins. "It may take a national rollout to get the right sales volumes that will enable us to cut prices," said Jayesh Patel, an electronics dealer in Nairobi's Westlands.

Information ministry officials said last week that a tax rebate on the boxes was on the cards to speed up their uptake and help phase out analogue TV as planned.

The switch from analogue to digital broadcasting requires both broadcasters and consumers to buy new equipment that converts analogue signals to digital. The government two months ago announced that only digital set top boxes that are Digital Video Broadcasting Terrestrial (DVBT) and MPEG4-enabled will be sold in Kenya.

The government says the set top boxes should be priced at between Sh3,000 and Sh5,000 but consumers say they are currently priced at Sh10,000. Digital TV sets that don't require the set top boxes are priced at between Sh30,000 and Sh500,000 for high definition versions.

Migration to digital broadcasting is expected to unlock the frequencies logjam and break the long queue for licenses by those seeking to invest in Kenya's vibrant broadcasting sector.

An increase in the number of broadcasters is in turn expected to spur growth down the chain, especially in the content generation market to keep the stations running. All broadcasters are from next year expected to air at least 40 per cent local content, a regulation that opens up a huge business potential for homegrown production houses.

Information permanent secretary Bitange Ndemo said allowing private dealerships in the sale of the set top boxes was expected to bring in competition and pull down prices. Dr Ndemo said the government was also considering setting up local assembly operations to help drive down prices.

Kenya Digital Committee, the team that is overseeing the migration to digital broadcasting, says the government should also allow Kenya Broadcasting Corporation to import the gadgets through its subsidiary Signet for faster uptake. Signet has already shipped in some boxes for the trials.

The government has formed Signet as a KBC subsidiary to transmit the digital signals for all broadcasters until 2012 to reduce the cost of migration. But the move is also seen as an attempt to level the playing field by removing the high cost of equipment that has acted as an entry barrier to potential investors.

Broadcasters will be required to sign transmission contracts with Signet upon licensing by the CCK. A number of broadcasters including NTV, KTN, CNBC, K24, STV, KBC, EATN, Oxgen and Family TV are already broadcasting through Signet and can be received by anyone with the set top boxes.

Establishment of a single signal distributor leaves broadcasters with the task of generating content, opening a new competition front. All broadcasters are also expected to apply for new licences in January to meet the requirements of the Kenya Communication Amendment Act 2009.

Kenya has 110 television channels and 264 FM frequencies assigned to 23 television companies and 62 FM broadcasters.

Under the new transmission model, broadcasters will have uniform signal coverage removing reach and clarity as an item of competition in the market. "The challenge is for the broadcasters to generate local content that will enable them to run the stations 24 hours without breaching the regulations," Njoroge said citing the new rule requiring them to have at least 40 per cent local content.

David Waweru, the KBC managing director, said the industry should now concentrate on content development as opposed to incurring costs on none core business issues such as building and maintaining infrastructure.

"With analogue broadcasting it required a broadcaster to put up between 25 to 30 transmitters worth not less than Sh1 million each," said Waweru.

Business Daily