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TV set-top boxes costly despite import duty waiver

On Luthuli Avenue, a digital set-top box was going for between Sh5,000 and Sh6,000, with retailers reporting good business.
On Luthuli Avenue, a digital set-top box was going for between Sh5,000 and Sh6,000, with retailers reporting good business. Photo/FILE 

The price of set-top boxes, gadgets that convert analogue TV signals to digital, remains high despite the government’s intervention.

The high cost may deny 900,000 owners of analogue TV sets access to their favourite channels.

A spot check by the Business Daily on vendors revealed that none of the five listed sells the convertors below Sh5,300, more than double the Sh2,500 the government had proposed.

The gadget is used to access local channels such as NTV, KTN, Citizen, and KBC among other free-to-air services.

On Monday, the government announced that it would switch off all analogue television broadcasts by December 31, a move that saw the Consumers Federation of Kenya (Cofek) warn that it would move to court if the date is not postponed.

Set deadline

Cofek chief executive Stephen Mutoro has written to Information ministry Permanent Secretary Bitange Ndemo saying that the government’s move to switch off analogue TV reception by the set deadline contravenes provisions of articles 27 and 35 of the Constitution by discriminating against individuals who might not afford set-top boxes at the current price.

“Your reported view that further delay will be too expensive to investors confirms that the government is unfairly protecting the private sector at the expense of consumers and in total disregard of provisions of Article 46 of the Constitution,” said Mr Mutoro in a letter to Dr Ndemo.

“In the event that we do not favourably hear from you soonest, we will have no option other than seek judicial intervention.”

In August, the government revised the minimum specifications, allowing for importation of equipment that exclusively supports free-to-air (FTA) channels.

The move was meant to bring prices down by 45 per cent to around Sh3,360.

High price

However, traders who have brought in the gadgets say that it is not a long term business and as such prices will not go below Sh5,000.

The high price has led some viewers to subscribe to pay-TV service providers such as Startimes at an initial fee of Sh2,999, and Gotv at Sh3,100, then pay content at Sh5,99 per month.

“The number of enquiries we are receiving since Tuesday when the government announced to switch off Nairobi has gone up, but people are still not buying,” said a salesperson at Microville Solutions Ltd, who asked not to be named because she is not the company’s spokesperson.

Another vendor, Professional Digital Systems Ltd, shared the same sentiments.

However, Paul Kivuti of Smart Beaver said that their sales had risen following the government’s announcement.

“Previously we used to sell between two to three boxes, the number has gone up to 100 pieces per day since the announcement,” said Mr Kivuti.

Earlier, the government only allowed the importation of set-top boxes on the Digital Video Broadcast Technology 2 (DVB-T2) that could access both pay and free-to-air channels whether or not the consumer subscribes to pay- TV.

It is this “conditional access” feature, a technology allowing pay TV broadcasters to control what viewers watch and whose installation cost is estimated at about Sh3,360, that was removed in August with anticipation that the traders would pass on the benefits to end users.

In June, the government also removed import duty charged on set-top boxes in a bid to bring down prices. However, this has had little impact on the prices.

Communications Commission of Kenya (CCK) director-general Francis Wangusi said that the government had rolled out the digital television infrastructure to 70 per cent of the population.

Digital signals are currently available in Nairobi, Mombasa, Nakuru, Kisumu, Eldoret, Nyeri, Webuye, and Meru.

The Regional Radio Communication Conference held in Geneva in 2006 set a 2015 deadline for migration to digital TV, but the five East African Community member states set their deadline at December.

Apart from larger content generation, the switch is expected to expand opportunities for investors in digital terrestrial TV, broadcast mobile TV, commercial wireless broadband services, and help in disaster relief.

Consumers are expected to benefit from clear pictures, while competition among service providers is set to lead to better quality of programmes.

A CCK study showed that out of the four million households which own TV sets, 1.6 million (40 per cent) own black and white ones bought at about Sh4,000 each.

Such households might not afford costly set-top boxes or find value in investing in the gadgets if the price remains high.

Mr Wangusi had earlier said that the greatest barrier to the success of digital migration process would be access to affordable set-top boxes.

mokuttah@ke.nationmedia.com