TV broadcasters set to pay up to 62 per cent less for signals

What you need to know:

The proposed fee reduction is a big win for media houses which have previously complained about expensive distribution costs charged by the two signal distributors, Pan Africa Network Group (PANG) and KBC-owned Signet.

Television broadcasters will pay lower monthly fees if a UK consultant’s proposed new charges are adopted by the industry regulator.

The Communications Authority of Kenya (CA) in May contracted UK firm Analysys Mason to review the signal distributor fees introduced in 2013 in the run-up to the migration from analogue to digital broadcasting.

On Monday, the UK firm said the proposed rates will apply up to 2018. Under the rates, broadcasters will pay Sh79,323 per megabit per month for signal distribution within Nairobi and its environs — down from the current Sh125,990 translating into a 37 per cent reduction.

The cost of distributing digital signals to other major towns will come down by 62 per cent to Sh35,052 from the previous Sh93,202. The consultant also proposes a Sh29,295 monthly fee for signal distribution within remote areas.

The proposed fee reduction is a big win for media houses which have previously complained about expensive distribution costs charged by the two signal distributors, Pan Africa Network Group (PANG) and KBC-owned Signet.

Francis Wangusi, the CA director general, said yesterday the objective of the study was to determine appropriate costs charged by broadcast signal distributors.

“The findings of this study are therefore aimed at augmenting the outcomes of the 2013 cost study. This exercise will culminate in another determination on the new charges going forward,” Mr Wangusi said.

Remote areas

The monthly fee is set to increase slightly year on year, to factor in inflation, in the subsequent three years to 2018.

If the new rates are adopted, broadcasters will from next year pay Sh84,063 per megabit for signal distribution within Nairobi, Sh86,139 for the same capacity in 2017 and Sh87,699 in 2018.

Those in other major towns will pay Sh37,248 come next year, Sh38,248 in 2017 and Sh39,005 in 2018 while those in remote areas are set to pay Sh31,073 from next year, Sh31,821 in 2017 and 32,375 in 2018.

In 2013 the CA introduced a fee of Sh125,990 per megabit for Nairobi and its environs, and Sh93,202.75 for other areas in Kenya, from the previous Sh1.135 million charged per channel and Sh248,141 per megabit for signal distribution services within Nairobi.