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Firm eyes mass market to increase pay TV users

By | August 9th 2010

Wananchi Group plans to increase pay TV uptake among Kenyans in a market that has failed to respond due to high pricing.

Pay TV subscribers have been growing marginally despite the availability of these services in the country for many years.Wananchi Group in a bid to take the services to the mass market, has been recruiting highly talented and experienced personnel to bring its plans to fruition.

Those joining the Wananchi stable include former Telkom Kenya deputy Chief Executive Peter Reinartz, who will head the group in Kenya.

Mr Reinartz will be managing director of the Group’s operation in Kenya and is part of a crucial team that will see the firm through its next phase of growth.

Reinartz has extensive knowledge in pay TV, having worked with several cable TV operators in Europe prior to joining France Telecom in 2000.

“He has worked in telecoms industry for over 20 years, ten of those being in cable TV,” said Richard Bell, the Chief Executive East Africa Capital Partners, the majority shareholders of Wananchi Group.

Wananchi, which markets its pay TV and broadband services through Zuku brand, has also brought on board Hannelie Bekker, formerly of South Africa’s SABC3 and Telkom Media, a South African pay-TV operator.

Television content

Ms Bekker is the managing director of a new outfit within the group, the Wananchi Programming Group (WPG), which will put together television content to be aired on its Zuku pay TV.
The unit will develop and acquire content to compliment the existing channel line-up, part of which will entail working with local film developers in generating Kenyan content.

Wananchi has hired consultancy services of Bruce Steinberg, former head of programming at Sky TV, UK to help in setting up Wananchi’s programming division.

Pay TV in Kenya is largely viewed as a service for the elite and has to date attracted a handful of subscribers. Firms offering such services jointly have about 100,000 customers, a marginal number since some of the operators have been running for more than 15 years in the country.

Research shows that a substantial number of Kenyans are willing to part with between Sh1,000 and Sh1,500 monthly for family entertainment.

Low uptake

“Kenyans want banking and communication services, they also want to have access to pay TV but need them at affordable prices,” said Bell, adding the firm wants to make services affordable.
He said Africa generally had a low uptake of pay TV services due to pricing, content and distribution models used by the operators.

“Global pay TV penetrations range between 20 up to 80 per cent, while in Africa the penetration is still less than 0.1 per cent. This disconnect is where we see a great opportunity,” he said.

“In the short-term, we are looking at having a customer base of about 1.5 million and in the medium term, we target 50 per cent of the entire population,” said Bell.
WPG is being set up using Sh1.5 billion it received from Canada’s export credit agency, Export Development Canada.

Bell said the new technologies being employed would allow the firm to offer such services like video-on-demand, pay-per-view and multiple High Definition channels, all of which are firsts in the local market.
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