Television broadcasters will pay lower monthly signal distribution fees following a downward review by the industry regulator, Communications Authority of Kenya (CA).
The review follows a CA study undertaken by Analysys Mason, a UK consultancy firm, which recommended that Broadcast Signal Distributors (BSD) charges must not exceed a certain recommended price cap.
Under the new rates, broadcasters will pay Kshs 89, 545 per megabit per month for signal distribution within Nairobi and its environs — down from the current Kshs 125, 990 translating into a 29 per cent reduction.
The cost of distributing digital signals in other major towns will come down by 60 per cent to Kshs 37, 311 from the previous Kshs 93, 202. The television broadcasters will now pay Kshs 32,961 monthly fees for signal distribution within remote areas.
The reduction of the monthly fees is a big win for new broadcasters on the digital platform who have previously complained about expensive distribution costs charged by the two signal distributors, Pan Africa Network Group (PANG) and KBC-owned Signet.
CA Director General Francis Wangusi said the objective of the cost modeling study was to review the existing BSD charging framework in Kenya, taking into account the prevailing market developments and provide a comparative analysis of the current situation with international best practices.
‘’The cost-modelling would ensure that the tariffs arrived at give Signal Distributors a reasonable return on their investment without levying unjustifiably high charges to content developers/providers thereby constraining access to the digital platform to the detriment of consumers,’’
The monthly fee is set to increase slightly year on year, to factor in inflation, in the subsequent three years to 2019.
The new rates became effective on December 1, 2016. Broadcasters within Nairobi will pay Kshs 89,545 in per megabit for signal distribution in 2016, Kshs 91,753 in 2017 and Kshs 93, 411.
Those in other major towns this year pay Kshs 37,311, Kshs 38,306 in 2017 and Kshs 39,074 in 2018.
In 2013 the CA introduced a fee of Kshs 125, 990 per megabit for Nairobi and its environs, and Kshs 93,202.75 for other areas in Kenya, from the previous Kshs 1.135 million charged per channel and Kshs 248,141 per megabit for signal distribution services within Nairobi.
The new BSD framework consists of two main components: a price cap for broadcasting charges on a new cost model, and a Reference Access Offer (RAO) describing the services to be provided to broadcasters by the two national BSD operators.
The study also recommended that all channels must pay all the listed charges for the services used, except that the charges for must-carry channels included in pay-TV bouquets are to be paid by the pay-TV provider rather than the channel.