Workers wait for customers at a TV shop in Nairobi. Treasury is likely to subsidise the cost of buying set-top boxes, which will convert analogue signals to digital format. Photo/FILE
What you need to know:
The subsidies, to be paid directly to importers of the equipment, are expected to cut by up to half the prices of digital receivers currently standing at an average of Sh5,000.
Treasury has agreed to finance the subsidy through the Universal Access Fund to be managed by the Communications Commission of Kenya, which regulates the telecoms sector.
If offered, the subsidies could be a reprieve for millions of Kenyans who risked being left out of TV viewership when the migration takes place in the next three months.
Television owners will get a subsidy on set-top boxes as the country makes the transition from analogue to digital broadcasting, senior Ministry of Information and Communications officials said Thursday.
The subsidies, to be paid directly to importers of the equipment, are expected to cut by up to half the prices of digital receivers currently standing at an average of Sh5,000.
Ministry officials, who cannot be named commenting on a matter that is before court said the Treasury had agreed to finance the subsidy through the Universal Access Fund to be managed by the Communications Commission of Kenya, which regulates the telecoms sector.
CCK is expected to ascertain the number of analogue television sets currently in use countrywide using the household appliances information gathered during the 2009 census.
Information minister Samuel Poghisio, his Finance counterpart Njeru Githae and CCK director-general Francis Wangusi did not respond to questions on the subsidies.
Expectation that the government could follow the examples of South Africa and the US in subsidising the gadgets had been rising since Monday when State broadcaster KBC floated tenders for supply of the set-top boxes.
The receivers are currently priced at between Sh2,500 with pay networks and Sh7,000 for free to air services. It is estimated that the high pricing has rendered more than 90 per cent of Nairobi’s one million households incapable of purchasing the set-top boxes.
“The government knows that millions of Kenyans live below the poverty line and cannot afford these gadgets even at the price of Sh3,000,” Henry Kurauka, the lawyer representing consumers, told the High Court.
If offered, the subsidies could be a reprieve for millions of Kenyans who risked being left out of TV viewership when the migration takes place in the next three months.
Mr Githae scrapped import duty on the equipment in the 2012/2013 Budget but that has had little impact on pricing, forcing the Treasury to reconsider the subsidies it rejected in the run-up to the Budget.
South Africa, which has set the digital migration deadline for June 2013, is subsidising the cost of set top boxes to make them affordable to poor segments of the population.
It has, however, faced a herculean task determining the number of people who are eligible for the price cut that targets about 450,000 households.
The South African government allocated the Universal Service and Access Agency of South Africa (USAASA) R180 million (Sh1.8 billion) in the 2010/11 financial year to assist poor households make the transition.
The US made a similar move in October 2006 when it committed nearly $1 billion (Sh86 billion) to subsidise set-top boxes for 34 million households considered in need of help to make the changeover.
High Court Judge Isaac Lenaola Thursday directed that the planned migration in Nairobi be put on hold until January 11, 2013, when the ruling on the case filed by the consumer body would be delivered.
The Consumer Federation of Kenya (Cofek) moved to court on December 10 seeking to block the government from switching Nairobi off analogue TV transmission.
“I grant the prayer until January 11th, 2013 when the ruling will be made,” said Justice Lenaola.
CCK said in opposition to the Cofek application that there were between 200,000 and 300,000 television sets in Nairobi whose owners have multiple sources of information. The 2009 census found that there were about 2.5 million TV sets in Kenya.
“Nairobi has a large affluent population, they have more access to where they can watch television,” said CCK lawyer Mohamed Nyaoga.
Cofek had argued that switching off analogue TV signals would deny viewers access to information in the run-up to the March 4, 2013 General Election.
“Digital signal broadcast is already being received in Nairobi and its environs. It is thus untrue that any segment of the Kenyan population will be cut off from following or participating in important events in the republic,” said Poghisio in court filings.
The government said it also feared that delaying the migration would make Kenya a dumping ground for analogue TV sets.
However, Cofek has argued that households were not given enough time to prepare for the switch off, the first formal notice having been issued two weeks ago.
Mr Poghisio stated in a sworn affidavit that East African Community members – Kenya, Uganda, Tanzania, Rwanda and Burundi — had targeted this year to complete the digital migration.
He argued that the migration process was launched in December 2009 and the switch-off in Nairobi was a pilot programme.
In a sworn affidavit filed in court, CCK’s acting director for the multimedia services division, Leo Boruett, said the commission had conducted adequate civic education and given ample time for consumers to purchase the set-top boxes.
He said the initial deadline of June 2012 was revised because the decoders that would have facilitated the migration were not readily available.
“I am aware that indeed, due consideration has been made to the members of the public in regard to the cost of such migration,” Mr Boruett said in reference to the zero-rating of import duty on set-top boxes.
CCK said there were 15 models of set top boxes being sold by vendors, increasing competition and lowering the price.
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