Digital switchover gets Pay TV firms in heated race for subscribers

Last Updated 13 years ago by Kenya Engineer

The battle for pay TV subscribers in Kenya has intensified as the government pushes citizens to migrate to digital platform.The deadline for migration in the capital is set in December 13th, having been pushed from Sept. 15 this year. Pay TV service providers in the East African nation have come up with various products to appeal to consumers and boost their market share ahead of the migration.

Seeking to amass subscribers ahead of the digital migration is Multichoice Kenya, through its subsidiary GOtv, and Chinese firm StarTimes Media. The companies are in all out rivalry, with each coming up with products to lure subscribers to their side.

The pay TV firms have renewed the competition after Communication Commission of Kenya (CCK) ordered them to provide subscribers with at least five free-to-air channels.

“It is wrong for pay TV service providers to switch off viewers who are yet to pay for their monthly subscription. The commission has set the minimum number of free-to-air channels that pay television must carry. The free to air channels providers are supposed to offer their content for free to pay TV stations,” CCK director-general Francis Wangusi said recently.

The directive opened a new battlefront, with GOtv and StarTimes coming up with decoders that allow subscribers have access to five local free-to-air channels.

Multichoice launched GOtv Open, which allows customers to access local channels after paying a set up fee of $29.

With the product, subscribers can still watch the free-to-air channels even without paying monthly fees. In the past, one could not access the channels without paying subscription charges.

“This service provides the best solution for viewers to receive local free-to-air channels as we help government in the digital TV migration process,” GOtv Kenya general manager Felix Kyengo said.

StarTimes, on the other hand, has taken its rival head on with the launch of free-to-air set top boxes following the directive from CCK. The company, which is now a year old in Kenya, launched free-to-air set-top boxes retailing at $57.

The other set-top box that requires monthly subscriptions is going for $40. With the new product, StarTimes says it hopes to help in pushing access to digital TV service.

“The set-top boxes have a capacity to accommodate both pay television and free-to-air digital services. Customers will have an option of upgrading free-to-air to pay TV services at will and vice-versa without the need to purchase another set-top-box,” said StarTimes CEO Leo Lee, adding that Kenya has become the flagship market for set-top boxes.

The new GOtv and StarTimes set-top-boxes are expected to encourage Kenyans to migrate to digital TV as they cost lesser than what independent dealers are selling free-to-air gadgets.

The devices sold by independent dealers in the capital go for between $57 and $80.The high prices have been identified as one of the hindrance to the switching to digital TV, with many people turning to pay TV service providers, who, however, until the CCK directive, were not offering free-to-air local channels without subscription.
The pay television providers had subsidized prices of their set- top boxes at between $11 and $28 and subscribers were paying monthly fees of between 7 and 78 dollars, which CCK noted was unsustainable, in particular for low-income earners that are targeted in digital migration move.

According to CCK, an estimated 224,000 set-top boxes have been bought in Nairobi from pay TV service providers as people prepare for migration to digital TV. On the other hand, about 11,000 boxes have been bought from independent dealers. This is an indication that pay TV service providers play a key role in Kenyans’ migration from analogue TV viewing to digital.

“The move to offer at least five free-to-air channels by pay TV subscribers was long overdue and will encourage many Kenyans to go for the gadgets. Personally, I was discouraged from acquiring the gadget because one had to subscribe before watching local channels. It did not make sense to me,” said NGO worker Peter Ngolo.

Ngolo added that at the end of this month, he is going to buy a set-top box. “With the ongoing competition, one buys a set-top box at $30, which is really cheap, twice lower than what independent dealers are selling theirs,” he said.

However, not only pay television service providers are scrambling for subscribers in the East African nation. TV makers, in particular LG and Samsung, have launched in Kenya gadgets with in-built set-top boxes mainly targeting the high-end segment of the market.

LG recently launched a 760H 42-inch model that retails at $644, while Samsung’s 32 inch gadget goes for $690.
It is estimated that there are about 4 million analogue television sets in the East African nation, an indication that pay TV service providers and television manufacturers still have a huge market to satisfy.

Source:Xinhua