CCK clears 168 operators to spur competition in Pay-TV
Posted Wednesday, June 13 2012 at 20:41
Competition in the Kenyan pay television market is expected to intensify as the industry regulator prepares to license 168 operators in a sector currently dominated by DStv.
The Communications Commission of Kenya (CCK) on Wednesday said the new providers would be licensed under the digital broadcasting regime, which is replacing the analogue platform.
“We are going to issue the 168 applications on our waiting list with temporary broadcasting permits before the end of this week as we wait for a High Court case to be determined,” Francis Wangusi, the acting CCK director-general, told the Business Daily.
The Media Owners Association last year won court orders barring CCK from migrating them to the new licensing regime because CCK was not an independent industry regulator as envisaged under Section 34 of Constitution. The case is yet to be resolved.
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The new operators will not be required to establish broadcast infrastructure like masts, but will be hosted by the two licensed signal distributors — Signet and Pan African Network — at a fee.
The separation of roles will substantially reduce the importance of capital as a barrier to entry in the sector and instead put greater emphasis on content as a competitive tool.
The high cost of operation has partly contributed to the dominance of DStv and the collapse of new entrants like GTV and Smart TV.
“We expect the new providers to introduce new business models such as video on demand, commonly known as pay- per-view, and niche subscription.”
Video on demand allows subscribers to buy specific programmes instead of packages that have made the pay-TV market expensive and forced consumers to buy content they have no interest in.
Most of the permits will be issued to thematic areas such as sports, culture, environment, religion and industry. This will allow providers to offer content on conditional-access basis, meaning viewers will have to pay for it.
Information and Communications permanent secretary Bitange Ndemo said the viability of the business would henceforth be dictated by content quality.
“Providers will have to sell relevant content. This will bring to an end the era when politicians acquired frequencies for speculation or to drive their partisan agenda,” said Dr Ndemo.
He said the new model would exert competition pressure on pay television providers such as DStv, Zuku, My TV and free-to- air stations.