Safaricom enters Kenya's digital TV market

Safaricom CEO Bob Collymore (right) with General manager Consumer Business Sylvia Mulinge during the launch of Safaricom TV, ‘The Box’ that will enable subscribers to view TV content and share data [PHOTO: COURTESY]

NAIROBI: Safaricom has entered the digital television market a day after the mobile operator announced 38 per cent jump in profits. The firm, which has 3.1 million smartphones on its network, hopes to grow its data business using the set-top box dubbed the ‘Big Box’.

Consumers will access the content using 3G and 4G data network. “Our subscribers will access a consolidated offering delivered via set-top box and which is shareable to many devices,” Safaricom Chief Executive Bob Collymore said.

As a sweetener, Safaricom has offered consumers a six month free Internet upon purchase of the gadget that will retail at Sh9,999. Consumers will have two payment plans to pick from. Also, consumers will also have three months free access to YouTube, to hook them to the gadget.

Analysts from Standard Investment Bank say the free YouTube introductory offer will build on usage habits if the firm doesn’t have an arrangement with Google. The device can also be used as a Wi-Fi hotspot for up to ten users.

The firm is now waiting for a licence from the Communication Authority of Kenya to start broadcasting its own content in a move set to upset the current broadcasting environment, which is yet to recover from a tumultuous digital migration process.

“We have applied to the Communication Authority of Kenya for a broadcasting licence that will enable us develop and host more content,” Mr Collymore said adding the firm is currently aggregating content.

It’s targeting the untapped demand in the home broadband market as well as reach an estimated 2.4 million households of the 3.2 million that have access to digital television sets.

The firm says they will have an option of a six-month installment plan that will cost an initial Sh4,999 and monthly installments of Sh999 for another six months.

The package will include access to free to air TV stations as well as an allocation of up to 6GB a month in data bundles. Subscribers will also buy a 50GB bundle for Sh4,000 every month.

Customers will top up their balances by buying monthly bundles using their airtime or M-Pesa. The firm said mobile companies are already making inroads into the business of content creation and distribution. “Globally, consumers are changing the way they consume content and the lines between traditional lines of business continue to blur in response to customer needs,” Collymore said.

MASSIVE PROFITS

There are 16 million Kenyans with access to the Internet. Safaricom is hoping to convert some of these into its customers. The firm, which invested Sh33 billion in infrastructure in the last financial year, boasts over 2,000km of proprietary fibre infrastructure. This is also the first product launched on the 3G networks.

On Thursday, Safaricom reported a 38 per cent growth in net profit to Sh32 billion, as M-Pesa and data revenue growth helped reinforce the firm’s reputation as the most profitable in the region. The results mean Safaricom made Sh87.7 million per day in the year that ended March 31, 2015, which translates to Sh3.6 million every hour in profits alone.

Mobile data revenue grew at an impressive 59 per cent driven by an increased uptake of affordable data bundles and a 21 per cent growth in 30-day active mobile data customers to 11.6 million.

By March 31, 2015, the firm said it had 4.3 million customers on 3G enabled devices of which 3.4 million were smartphones. Fixed data revenue increased by 22 per cent to Sh3.1 billion on the back of 23 per cent growth in fixed data customers.