Politics and policy
Subscribers lose millions as Smart TV goes off air
Posted Monday, February 6 2012 at 21:18
Pay-television provider Smart TV has closed shop after failing to secure adequate funding for its operations, leaving thousands of its subscribers and dealers with obsolete decoders.
Word that the signal had gone off at Smart TV started last week after more than 2,000 subscribers failed to access premium content through the decoders.
Calls to the operator’s offices also went answered, with the chief executive officer and his compliment of seven members having left a month ago.
“We have closed shop and are currently shopping for an international investor following the exit of the Swedish investors – Next Generation Broadcasting (NGB) — which has put us into financial constraints,” said Mohammed Nyaoga, chairman of Transmex, which owns Smart TV.
Mr Nyaoga said the directors of the firm would meet on Friday to decide if subscribers will be refunded the Sh5, 000 they invested on decoders and the subscription fees for the month of January.
SmartTV’s bouquet of eight channels covering news, entertainment, sports, kids’ content and gossip was going for Sh990 a month.
Smart TV becomes the second pay- television operator in Kenya to close shop after GTV fell into financial distress in 2009, amplifying the need for a consumer protection law.
The closure now leaves Wananchi’s Zuku as the main rival of MultiChoice DStv that has dominated the market for over 15 years.
By the time of its exit, NGB had injected Sh400 million into marketing, leasing the terrestrial broadcasting platform from Signet — a subsidiary of the state owned Kenya Broadcasting Corporation KBC — and importation of the decoders.
The Swedish investor’s exit followed legal tussles with local media houses over unathorised use of their content and the government’s decision to change the model of set top boxes from the Digital Video Broadcasting -Terrestrial (DVBT1) technology to a much superior version, DVBT-2.
This meant that the firm, which had already invested on set top boxes based on DVBT1 technology, had to invest again in the new ones.
NGB had been taken to court by six Free To Air operators who were unhappy that it was using their programmes as part of its DTT bouquet without authorisation and payment of a fee. The court ruled that there was no irregularity in the process and gave NGB a go-ahead to continue with operations. It had partnered with state broadcaster KBC to offer its pay-TV channels.
Information Permanent Secretary Bitange Ndemo yesterday dampened the hopes for compensation by subscribers, saying the government was only willing to compensate importers of decoders.
“When the government switched to the superior technology DVBT2, we asked those who had already imported the DVBT1 to come for compensation, but no one did, as they did not have the import duty receipts” said Dr Ndemo.
He said an option would be for the Treasury to buy the convertors and provide them for free, like the US and other countries have done.