What you need to know:
- Reduction of fees big win for broadcasters on digital platform
- The fresh review by the regulator will take into account the latest market developments
- This would be the first Broadcast Signal Distribution fee review since January 2018.
Monthly signal distribution fees paid by television and radio broadcasters are set for a fresh review, for the first time in four years, raising hope of savings for service improvement.
The Communications Authority of Kenya (CA) disclosed that the Broadcast Signal Distribution (BSD) fees will be reviewed, taking into account the latest market developments such as improved efficiency due to technological upgrades.
“The overall scope of this project is to assess competition in the broadcasting sub-sector and review the pricing and access framework applicable to all broadcasters (content providers)” the regulator said in a disclosure.
This would be the first BSD fee review since January 2018. A fresh reduction of the monthly fees would be a big win for broadcasters on the digital platform who have previously complained about expensive distribution costs charged by the two national BSD distributors, Pan Africa Network Group (PANG) and Signet, which the Kenya Broadcasting Corporation owns.
African Digital Network Limited (ADNL) consortium, GOtv, and Lancia are also licensed self-provisioning broadcasting signal distributors.
“Review of the competition in the broadcasting sub-sector and the BSD pricing framework is key in enhancing fair and healthy competition in the broadcasting sub-sector with a view to maximising the efficiency of the market,” CA said.
Broadcasters currently pay Sh93,411 per month maximum for each site per megabit per second (Mbit/s) for signal distribution in Nairobi, Sh39,074 to other cities and towns, and Sh34,352 to rural areas.
CA kept the rates constant since 2018 to “observe market performance, that would inform the Authority on decisions regarding future interventions in the BSD sub-market”, it said.
In a review that was effected on December 1, 2016, CA lowered BSD rates by 29 per cent from Sh125,990 to Sh89, 545 per month for signal distribution within Nairobi and its environs.
It lowered the BSD cost in other major towns by 60 per cent from Sh93, 202 to Sh37, 311.
In its previous tariff review, the CA had noted that PANG and Signet enjoyed a duopoly in signal distribution, giving them an incentive to price their services significantly above their costs.
Pass down benefits
CA now says technological advances could have significantly lowered BSD costs and that it’s necessary to review current tariffs to pass down these benefits to broadcasters.
These [among others] may have continued to be experienced in the broadcasting market [and] “... made the previous remedies and BSD rates inconsistent and/or obsolete,” it said.
CA reckons lower costs will boost competition among broadcasters which will improve the quality of broadcasting services within the country.