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Competition gets stiffer in the Pay TV market

FINANCIAL STANDARD
By | August 31st 2010

By Macharia Kamau

Pay TV operator Multichoice Kenya is counting on digital broadcasting and a huge football fan base to grow its subscriber base and ward of competition.

Multichoice has enjoyed a near-competition-free environment over the last 15 years it has been in Kenya. The only other Pay TV providers targeted smaller niche markets. It is, however, facing strong competition from Wananchi Group, which runs cable TV provider Zuku TV.

The firm has recently announced plans to invest Sh1.54 billion to up its Internet and cable TV offerings in the country.

Wananchi has also set up a content division — Wananchi Programming Group (WPG) — that will be in charge of developing and sourcing content to run on the Pay TV.

And to fight off growing competition, Multichoice says it has in place a series of plans aimed at customer retention as well as acquiring more subscribers.

Recently, the firm launched DSTV Compact Plus, a 47-channel bouquet that it expects to be a significant factor in customer retention and acquisition.

Priced at Sh3,900 per month, General Manager Multichoice Kenya Stephen Isaboke says it would offer the English Premier League at a discounted price. Previously, it was available on DSTV Premium that cost subscribers Sh6,500.

"The Premier League has a huge following in the country and many who may not afford the premium bouquet are either left out or compelled to go to public viewing areas like pubs. This is the market that we are looking at," he says.

Analogue to digital

The firm is also eyeing the process of migration to digital platform by local broadcasters as another key factor in increasing hold on customers.

Communications Commission of Kenya has set a 2012 as the deadline for the migration from analogue to digital broadcasting after which the analogue signals will be switched off, which is against a 2015 deadline set by International Telecommunication Union (ITU).

To be able to receive the digital signals, Kenyans will have to either use set top boxes that convert digital signals to analogue signals for reception by their current TV sets or acquire new digital TV sets. The latter option has been considered too costly for most of Kenyan homes.

Set top boxes

Isaboke says the equipment its subscribers use to receive DSTV’s digitally encoded signals could also act as set top boxes.

"Our customers do not need to buy an extra set top box to decode the digital signals that will be broadcast from the digital platform," he says.

"If one has the equipment, they do not have to pay to receive the free to air stations that are broadcasting on the digital platform," he said.

He says the firm also plans to launch what it calls "DSTV FreeView", a package that will be available to people who have taken up Multichoice services but may have fallen back on their payments.

"Some subscribers may not have their accounts active throughout the year. Instead of their equipment lying idle, we are giving them an option in form of the free view package," Isaboke says.

The FreeView package, Isaboke says, would have the local free-to-air stations that are already on DSTV platform as well as two to three other premium channels.

Isaboke says delivery of content through satellite had served it well over the years and still seemed viable for the future over building a cable infrastructure.

"We are constantly looking for opportunities that can improve our service delivery," he says.

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