DStv to deliver cable content in growth strategy

Pay-TV provider MultiChoice Africa, which owns the DStv brand, is set to deliver its content through cables, a move analysts say will address high upfront costs and signal disruptions seen in the current satellite transmission system.

The firm has started the search for local broadband providers that will carry its content via fibre optic cables and copper wire.

While the satellite technology is ideal for faster rollout to the mass market, it experiences weak signals during rainy seasons and requires customers to spend thousands of shillings on equipment.

The cost of the equipment, including a satellite dish and decoder, ranges from Sh14,000 to Sh26,000 depending on their technical specifications.

“We suspect the strategy aims to reduce the connection fee related to equipment costs and make services more efficient as weather normally disrupts satellite delivered services,” Standard Investment Bank said in a statement.

The shift in consumer preferences that has seen rise in Internet use to access home entertainment could also be one of the reasons behind the new DStv strategy.

Fixed fibre optics subscriptions in the country stood at 69,377 in the first quarter, up from 55,007 in the same period last year, according to the Communications Authority of Kenya (CA).

The statistics show the number of those linked to copper lines stood at 12,547 while those accessing the Internet through satellite connectivity were only 700. This signals that these two technologies that were popular a decade ago are losing out to fixed fibre connectivity. 

DStv, which has more than 200,000 subscribers on satellite, now wants to use a hybrid technology that will see it add the option of copper wire, coaxial cable or fibre optic cables.

READ: Content sharing rules set to end DStv's monopoly

The move comes at a time when international content providers such as Netflix and Hulu are targeting local audiences by streaming their content through the Internet, bringing new competition in the pay-TV segment.

“MultiChoice Africa … would like to source for one or two agents to distribute its bouquets on their wired networks in Kenya and to provide related subscriber management services,” reads part of the company’s request for proposal.

MultiChoice also indicated that the agents must have their own set-top boxes or decoders and content encryption system, meaning that it needs an assurance of safety of its content to avoid piracy.

“The set-top box specification and encryption system other than Irdeto, may be subjected to validation by MultiChoice Africa,” the pay television firm added.

DStv’s rival Zuku, owned by Wananchi Group, has invested in satellite, coaxial cable and has its own set-top-boxes through which its subscribers’ access content.

In the current telecoms infrastructure market, it is only Telkom Kenya that has invested in copper wire but is also replacing them with fibre optic due to cable vandalism.

Telkom is yet to rollout fibre optic cables to homes. Jamii Telecom has the most extensive fixed fibre connectivity in the country and has 80,000 fibre to the homes passes (ready-to-connect infrastructure). It however does not have set-top-boxes.

Safaricom and AccessKenya, have also invested in fibre targeting corporate clients.