Slow set-top box take-up in Kenya

TechCentral wraps up the major technology news from around the African continent. Compiled by Craig Wilson.

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Sales of digital set-top boxes, which went on sale last month in Kenya, have been sluggish. The boxes are required to convert digital terrestrial broadcasting signals so that that the East African country can switch off analogue broadcasts before the International Telecommunication Union’s mid-2015 deadline.

Kenya originally intended switching off its analogue signals at the end of last year, but this date was moved until after the country’s elections in March. This seems to have made consumers less concerned about buying the boxes.

Government has expressed concern that the lack of interest in digital migration may mean the country risks missing the union’s deadline and it could hurt broadcasters that have invested heavily in digital broadcasting.

Set-top boxes cost between R500 and R800 in Kenya and are readily available. South Africa, meanwhile, has yet to make boxes available or finalise how they’ll be subsidised for the poor. Kenya has decided not to offer subsidised boxes, but may reconsider this as the deadline approaches. Source: Business Daily

M-Pesa gets wings in Tanzania
Using mobile money transfer service M-Pesa, payments company PayGate has begun allowing consumers in Tanzania to pay for airline tickets in a move that’s intended to boost e-commerce activities.

Tanzanian airline FastJet is one of the first companies in the region to accept M-Pesa for online bookings. PayGate hopes to allow more merchants to receive such payments so that consumers can buy products like computer equipment and gift vouchers online. Source: PayGate

Banks thwart Zimbabwe’s EcoCash
Zimbabwe’s commercial banks have convinced the nation’s reserve bank to insist that mobile payment services be backed by funds held in banks. EcoCash was launched in late 2011 by mobile operator Econet and has more than 1,7m users. Because the company moves hundreds of thousands of dollars daily, analysts have said EcoCash could become Zimbabwe’s largest banking service, something existing banks would rather not see happen. Source: Mobile Money Africa

Tanzania cuts call costs by two thirds
The Tanzania Communications Regulatory Authority (TCRA) has reduced call interconnection rates by 69%. Tanzanian consumers have long carried multiple Sim cards to take advantage of cheaper on-net calls. According to the TCRA’s director-general, John Nkoma, only 4% of the population makes off-net calls because of the excessive rates associated with making calls to users of other networks. The new rates will come into effect on 1 March. The TCRA intends to continue reducing the interconnection rate each year until 2017. Source: The Citizen

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  • Robert

    The dilemma with analogue to digital switch-overs is that FTA broadcasters are typically single service providers, whereas payTV operators offer far more compelling content, albeit pay services. So, in most cases, consumers will wait before spending on a FTA set-top box, in order to compare with low-end pay TV offerings. Some then migrate from free analogue to digital pay, thus reducing the FTA viewership, impacting FTA advertising revenue. When the dust settles, normally in our experience, the former analogue FTA viewer pool has reduced and pay TV gained. All countries and authorities over-estimate the FTA digital uptake initially.

  • Robert

    Unfortunately the fundamental differences between Free-to-Air (FTA) broadcasters and PayTV broadcasters makes this impossible.

    In short, the FTA DTT migration could be very compelling for the public if we have sufficiently compelling local and other content. The fact that we currently only have 3 SABC services and one eTV service is not compelling enough. And here you are correct, no one is going to rush out and buy DTT Set-top Boxes (STBs) if this is the content they are going to get for the foreseeable future. In my experience, content has always been the key.

    But the problem is much bigger than this. DOC wants Sentech to manage the security system (STB Control) and have chosen Nagra conditional access (CA) to use as encryption / security technology to protect the STBs. Sentech already has a Nagra license. However, eTV mainly, and SABC to an extent (they dont really have much say being part of the DOC and thus the Gov), are against Sentech managing the STB Control system. And rightfully so in my opinion, as eTv (and SABC) would have no control over the cost of the STB Control system, and therefore could not manage their businesses effectively and profitably. Add to this the fact that there is considerable uncertainty as to the allocation of bandwidth on the multiplexes (MUXs), and suddenly current and new FTA broadcasters are severely disadvantaged, not knowing if the can roll out new digital services, how many services, and not having control over critical cost elements. And here is the issue, FTA broadcasters rely mainly on advertising revenue, and without certainty on how to retain and attract advertisers, they will be in trouble.

    As if this was not a big enough problem, some lobby groups (and these are known), are pushing the SABC / DOC at their executive levels, to reopen the STB Control issue and force them to reissue the RFP for STB Control. Well, if this happens, we can write off another year or so to get new tenders done, and add legal action from grieved parties to this, we might as well just abandon the DTT program altogether.

    Whilst all of this is happening, the only winners are MultiChoice, slowly eating away at the FTA market customers, costing eTV, SABC, and any new FTA entrants so called ‘eyeballs’.

    The losers are all of us, because what no one wants to raise is the frequency spectrum that is being occupied by analogue TV. While analogue TV occupies this valuable spectrum, no new broadband services can be brought to market that will enable more households to have access to the Internet, which will bridge the digital divide between the poorer households and the middle and upper class. Maybe there is no political will to do this quickly, for what ever reasons, but this is a serious issue that needs serious debate. This spectrum, once freed up, is worth billions (just research what was paid for this spectrum in the USA and UK by private companies), and can bring much needed capital to the country.

    So, here we are, 6 or more years down the line, and no DTT migration yet. While our decision makers are at loggerheads with various stakeholders, the rest of Africa is getting on with the task. Soon we will be way behind them, and then we must not blame investors for taking their money to Kenya and Uganda, and Ghana, and the likes, and give SA a cold shoulder.

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