Communications Authority proposes 30 per cent slash in cost of airing TV content

CA Director General Francis Wangusi

The Communications Authority of Kenya (CA) has proposed a 30 per cent reduction in the charges levied by Broadcast Signal Distributors (BSD) on content providers.

Through the findings of a contracted consultant, UK-based Analysys Mason, CA has proposed that content producers in Nairobi be charged a monthly maximum of Sh88,000 per megabit up until 2018, down from Sh128,000.

If adopted, distributing content to major towns like Nakuru would cost a maximum of Sh39,000, while a new category for rural areas would see producers pay at most Sh32,000 per megabit per month.

“The main aim [of the price review] is to increase the number of players in the industry by providing a conducive start-up environment even for new media,” CA Director General Francis Wangusi said Monday.

“But, of course, we do not want the prices to be too low that we end up compromising on the quality of services.”

On average, CA receives five applications a day for licences from local and international content producers who are looking to broadcast in the Kenyan market.

In 2013, the authority had to review prices to avoid the exorbitant charges proposed by Pan-Africa Network Group (Pang) that was to charge a monthly signal distribution fee of Sh1.1 million per channel in Nairobi, with Signet, a subsidiary of Kenya Broadcasting Corporation (KBC), proposing a fee of Sh248,141 per megabit in Nairobi.

The price reduction and subsequent increase in demand led to the expansion of BSD infrastructure, with Pang and Signet increasing their sites from nine and eight in 2013 to 16 and 13 in 2015, respectively.

“The authority, therefore, found it imperative to further undertake another study to come up with an independent cost modelling framework for broadcast digital signal distribution, and additionally align BSD investments and developments with charges to content service providers,” said Mr Wangusi.

The findings add that proposing that charges be in megabits is meant to allow producers to choose the quality of their content, with those opting to broadcast in high-definition paying more.

Not affordable

However, stakeholders in new media said their views were neglected in the proposals, adding that though the charges recommended are lower, they are still not affordable for them.

“With such price adjustments, it will take a year or two for advertisers to change their mind and realise advertising through us is cheaper than on mainstream platforms,” said Jane Muthika of Elimu TV.

“It is imperative we get hosted on free-to-air for the next three years or so until our businesses pick up.”

Ms Muthika added that most new media content is in line with the Government’s goals of developing entrepreneurship, education and community policing, and players had expected a bigger price cut.