The entry of new players into the broadcasting space riding on digital migration has unleashed a race to control the future of TV in Kenya and could possibly set off a price war.

A host of recently launched pay-TV and free-to-view services are drastically changing the country’s TV market and threatening to loosen the grip of established media that have held a monopoly on terrestrial broadcasting for decades.

In the race to control the emerging TV market, The EastAfrican has learnt that the Royal Media Services, the Nation Media Group and the Standard Group, under the Africa Digital Network (ADN) consortium, will jointly launch a free-to-view TV and broadband Internet service across the country.

The rapidly changing TV market has also attracted Bamba TV, Azam TV, StarTmes and GOtv which are providing real competition for the first time to traditional media and pay-TV services like DStv and Zuku.

Together, the ADN consortium dominate Kenya’s media scene, controlling 87 per cent market share in TV, 80 per cent in radio and 98 per cent in print, and their eventual switch to digital broadcasting is likely to undercut the fast growth enjoyed by the new startups.

According to a source in the consortium requesting anonymity, the convergence of TV and the Internet has “the potential to revolutionise the broadcasting industry and transform the media environment in Kenya.”

Currently, Zuku is the only company offering TV, Internet broadband and telephony services, but its cable infrastructure limits its reach in the country.

Latest data from the Communications Authority of Kenya shows that only 17,000 Kenyans consume their programming through cable. ADN plans to introduce free-to-view TV and affordable Internet service to Kenyan homes using a Wifi-enabled set-top box that can receive digital TV channels and Internet broadband.

Nairobi is shaping up as the first battleground having more than 900,000 TV sets yet to be connected to the digital signal. Both established players and those that are just emerging into this dynamic environment are in the race to control this market.

READ: East Africa prepares for digital migration

Analogue switch -off

Last week, the Supreme Court temporarily halted the analogue switch-off in the capital following a successful application by the ADN affiliated companies seeking more time to roll out their infrastructure since they were issued with the digital broadcasting licence on November 26, last year.

The ADN is uncomfortable with how the regulator allocated the 211 digital frequencies to the five signal distributors.
Chinese-owned Pan Africa Network Group (PANG) took the largest slice having 120 frequencies while the rest was split between GOtv, Signet, Lancia Media and ADN.

Signet, a subsidiary of the Kenya Broadcasting Corporation, has 54 frequencies while GOtv, which KBC controls 40 per cent, has five frequencies.

Lancia Media which owns BambaTV, has 11 frequencies and the ADN, despite controlling about 90 per cent of the media sector in the country, has only 21 frequencies. The government, through its interests in the national broadcaster and shareholding in GOtv, controls 90 frequencies.

The significance of frequency allocations is that while in analogue transmission one frequency can only allow one channel, digital transmission allows one frequency to carry as many as 20 channels, giving ADN’s competitors an edge in multiple programming.

The source in the consortium said that too much frequency is in the hands of a foreign-owned entity and the government through its interests in Signet and GOtv.

“Everything has been done in favour of PANG,” he said, adding that beyond the impact of the skewed allocations to Signet and PANG on the competitiveness of Kenya’s TV market, the government will have too much power over what goes on air.

ADN has also been allocated the 21 digital terrestrial Transmission (DTT) sites while Signet, Gotv and PANG control 80 sites, giving them a wider reach in the country. The consortium says the DTT sites allocated to them will limit their coverage and give their competitors unfair advantage.

However, ADN adds that in areas their signal may not be able to reach, satellite technology, which can cover 99 per cent of the whole country, will be used.

Currently, GOtv has built 19 DTT sites, Signet 12, PANG 17 and BambaTV has so far built one. The source in the consortium said some of their DTT equipment has arrived and is being fixed.

Nationally, the ADN is targeting 35 counties along the Northern Corridor, covering 48 per cent of the country where 32 million Kenyans live. The company aims to reach 2.3 million urban TV viewers and 1.5 million consumers in the rural areas, which represents 90 per cent of total viewership in the country.

Triple play

The convergence of Internet and TV is fast changing the country’s media environment and in the near future, it will become just as easy for a telecoms company to become a broadcaster as it will be for a broadcaster to become a telecoms company.

The licence awarded to ADN not only allows the consortium to distribute digital broadcast signals and “self-carry” its own content, but also to “build and commercially operate telecommunications/electronic communications systems.”

Zuku is currently the only company offering triple play services through its TV, Internet broadband and telephone plan. But other players such as ADN and telecoms giant Safaricom are interested in this business model.

The consortium, however, does not view Zuku as a competitor because it delivers its products using cable, the source said.
Besides, Kenya’s Internet market is big enough for everyone. According to latest data from the telecoms regulator, the number of Internet users rose to 22.3 million, up from 21.6 million, in the last quarter.

While access through mobile phones accounted for 99 per cent of the total Internet subscriptions, the number of people accessing the Internet using laptops and tablets is increasing.

ADN wants a slice of this market by ensuring every household is able to receive Internet broadband from its set-top box. According to data by Research ICT Africa, 89 per cent of Kenyans access Internet from their homes while only 23 per cent do so from work.

Recently, Bloomberg reported that Safaricom is also interested in offering Internet broadband and TV as a package to reduce its reliance on voice.

“Internet TV” is a revolutionary concept that gives consumers a broad selection of entertainment across many genres and users do not have to tune in at a certain time. By distributing content through the Internet, consumers have the power to decide what programmes to watch when.