Pay TV subscribers lose rights to access public channels

Subscribers of pay television services have lost unlimited access to free-to-air channels after the Communications Commission of Kenya (CCK) relaxed a requirement that the public channels be aired throughout.

The CCK has now obligated pay- TV providers to only allow subscribers two weeks of public channels after which they will be switched off if in default on the monthly fees, stoking another round of controversy over digital migration.

“Those subscribers who fail to pay subscription on time will continue to access the must-carry free-to-air services (FTA) for a period of at least two weeks,” said CCK director-general Francis Wangusi in a communication to pay- TV subscribers seen by the Business Daily.

Previously, under an agreement reached with the Consumer Federation of Kenya (Cofek) ahead of the initial digital migration date of December 13, pay -TV service providers were supposed to allow access to five free-to-air channels — KTN, NTV, K24, Kiss and Citizen — and the national broadcaster KBC.

READ: Pay-TV subscribers get free access to public channels

Cofek now says the relaxation threatens to roll back any goodwill the digital migration had earned, especially with regard to the right to access to information, which can only be guaranteed through free-to-air channels.

“The move is outrageous as it would mean that the pay television providers are trying to force consumers into their pay bouquets by using the content from the free-to-air services, which they themselves do not pay for. This is unacceptable and we will refuse it at all costs,” said Cofek secretary- general Stephen Mutoro.

The relaxation of the access rule appears meant to protect the pay- TV business where service providers subsidise decoders in the hope of getting more subscribers.

With unlimited access to public services, the pay-TV providers would have found themselves in a situation where the subscriptions do not guarantee revenues and recovery of the roll-out costs.

“World over, Pay-TV generates income from subscription and not hardware sales, which is always heavily subsidised,” said GOtv Kenya general manager Felix Kyengo.

The move comes on the backdrop of CCK data indicating that high prices of FTA set-top boxes — the devices required for the migration from analogue to digital broadcasting — had led many to opt for the cheaper Pay-TV decoders.

No regular subscription is required for FTA set-top boxes after the initial purchase, allowing owners with the appropriate receiving equipment to view or listen to programmes.

Consumers who have opted for the pay-TV decoders from Star Times and Gotv will now need to upgrade the devices at their own cost to continue receiving public channels after the two-week window closes.

“Digital migration does not mean paying monthly fees to watch TV programmes. Consumers who may not want to subscribe to pay- TV have the option of buying type approved set-top boxes which will enable them receive free-to-air channels for free,” says CCK on its website.

READ: Analogue TV switch-off set for early 2014

A CCK report to the Media Owners Association indicates that out of the 566,000 set-top boxes or decoders bought in Nairobi only 26,538 are free-to-air. 

Multi-channel decoders being sold by Pay- TV providers cost between Sh1, 999 and Sh2,999 while free-to-air set-top boxes cost between Sh4,000 to Sh16,200 from the 45 vendors approved by the CCK.

Pay-TV services, however, cost monthly fees ranging between Sh499 and Sh6,800 which may be above the reach of low-income earners, the main reason for protection of free-to-air services.

A GOtv set-top box is currently retailing at Sh3,399, inclusive of two months free subscription. On GOtv Plus, regular subscribers pay Sh849 monthly. 

Gotv subscribers wanting to access FTA channels only (GOtv Open) are required to pay a one-off administration fee of Sh2, 600 payable after the two months free subscription.

“Whenever a customer opts for GOtv Open, they forfeit the equipment subsidy,” Mr Kyengo said.

StarTimes FTA set-top boxes cost Sh4,999 compared to Sh2,999 for the pay- TV decoders. The high cost of set-top boxes has seen Cofek and media owners lobby for subsidies, including the removal of the 16 per cent VAT, after the zero-rating of the gadgets for tax purposes, failed to have the desired impact.

The government has ruled out further tax concessions amid speculation that some vendors were hoarding the gadgets to keep prices high and in anticipation of a waiver.

“We have removed the duty on imports and are not going to offer a VAT waiver. Vendors who are still holding on the gadgets would rather release them because the position won’t change,” ICT secretary Fred Matiang’i said.

He said there were more than 1.1 million set-top boxes, a claim contested by the Media Owners Association (MOA). MOA says most of the devices the government is referring to are pay- TV decoders rather than FTA converters.

A week ago, Judges Kihara Kariuki, Alnashir Visram and Hannah Okwengu ordered the CCK to reinstate analogue broadcasting until February 6, pending the determination of appeal by the Nation Media Group, Royal Media Services and the Standard Group.

The media houses appealed against a High Court ruling by Justice David Majanja that the digital migration can go on despite there being inadequate set-top boxes, the pricing not being addressed and the media houses being denied digital frequencies for their broadcasts.

The media houses argue that it is unfair to require them to surrender their content to signal carriers — Signet, a subsidiary of the State broadcaster KBC that is offering GOtv, and Pan Africa Network Group that is offering Star Times — that are in direct competition with them.

Mr Wangusi, however, said broadcasters were free to select their preferred signal carrier with whom they would enter into service level agreements.

The ruling prompted the CCK to switch off analogue broadcasts on Boxing Day, rendering most television sets in Nairobi and its environs targeted under the first phase of the migration show blank screens.

The CCK estimates that there are 1.2 million homes in Nairobi with analogue television sets in Nairobi, half of which have migrated. Other estimates put the number of sets in Nairobi at two million.

Digital transmission is expected to bring viewers picture and sound clarity, more channels and signal strength, widening the reach of TV services, while freeing frequencies for other services like fourth generation (4G) mobile date services.