Wananchi Group enters satellite pay TV segment


Kenya’s Wananchi Group will enter the satellite pay TV market in April 2011 setting the stage for a vicious battle for control of the business that has remained in the hands of DSTV. The firm has been offering TV services through the fibre network—a move that has limited its reach given the few homes connected to the cable, making it difficult to match DStv in pricing which uses satellite.

Wananchi is now joining DStv on the satellite platform, hoping to reach more homes and cut operations costs thus giving it room to lower prices of its products. “Currently, pay-TV is seen as an elitist product, we intend to launch a product that will be accessible to all levels of society,” said Richard Bell, Group CEO of Wananchi Group, adding that it would avoid the huge costs that come with laying and connecting households to cables.

Cable television allows viewers to access content in their homes using a fibre link, while satellite TV requires the use of a decoder and satellite dish. Wananchi’s cable TV dubbed ‘Zuku TV’ is available in high-end and middle class neighbourhoods in Nairobi, and now it plans to go countrywide and mass market.

The service, which is currently being tested, will go live in April 2011, and company insiders told Business Daily that prices for packages will be around 20 per cent lower than those offered by DStv. Presently, its cheapest product goes for Sh990 per month compared to DSTV’s Sh830.

“The satellite TV market remains greatly under saturated in Kenya mainly because of the high cost of getting the service. We shall leverage our agreements with international partners in order to offer low-priced products for the masses,” said Bell.

Wananchi’s entry into the pay-TV market opens a fresh round of price war similar to one that took place in 2007 with the entry of collapsed GTV that led to the free fall in costs.  In 2007, the prices fell from a high of Sh. 11,000 a package to a low of Sh. 1,600 which combined with an increase in local content emerged as the arsenal for market growth.

The current new entrants include Star TV, My TV and Smart TV, and mobile telephony firm Airtel has also announced plans to get a piece of this market.
“The problem has been how much it costs to acquire the set up equipment,” said Daniel Kagwe, CEO Smart TV.