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Safaricom to launch TV decoders next month

Safaricom is set to launch its own Internet-enabled digital television decoders next month, stepping up the battle for TV and data customers.

The telecommunications company says it is in talks with local free-to-air broadcasters for consent to air their content.

Buyers of the high speed 4G-enabled Safaricom decoders will also have access to video-on-demand and downloads.

Safaricom is taking advantage of the convergence made possible by digital TV migration to deepen its presence in the wireless Internet market.

WI-FI HOTSPOT

“It essentially gives you a wi-fi hotspot at home with 4G speeds. You’ll also pick up some local free-to-air stations and we are working with other partners to get more content on the box,” said Safaricom CEO Bob Collymore in an interview.

It is expected that the launch of its own decoders will give Safaricom the latitude to sell TV content and Internet as a package.

Only Wananchi Group – the owners of Zuku TV –  offer voice, Internet and broadcast as a package, meaning that Safaricom’s entry into this market segment will take competition to its doorstep.

Mr Collymore said the decoders will come pre-loaded with a SIM card, data bundle and a wi-fi router.

He however declined to disclose how much they will retail for, only saying the price will be competitive.

“The providers will offer a mix of content as is typical with other pay-TV propositions,” he added.

Safaricom is investing billions of shillings in 4G technology as part of its quest to reduce over-reliance on revenue generated from voice calls which has almost flattened at an average of Sh4 per minute.

For subscribers to access Safaricom’s 4G Internet currently available in Nairobi and Mombasa, they need devices that are 4G-enabled.

UNTAPPED MARKET

Data from the telecommunications industry regulator indicates that out of the five million households with television sets in the country, only 10 per cent have subscribed to pay-TV, pointing to a huge, un-tapped market.

“The main differentiator will be the fact that you can now use data on your TV – which opens up a new world of content for our subscribers who can now stream content on demand or play games online,” said Mr Collymore.

Broadcasters and telecommunication service providers have never been in direct competition but the switch to digital broadcasting appears to be setting the stage for broader technology-driven changes in the market that may in future see Safaricom offer TV content.

In the new digital dispensation, telecommunication companies such as Safaricom, Jamii Telecoms and Telkom Kenya can offer broadcast services such as video-on-demand, taking competition a notch higher.

Broadcasters, on the other hand, have a chance to offer Internet services to home users and earn extra revenue.

PRICE CUT

Competition is particularly expected to intensify in key areas such as Internet service provision as well as dissemination of news.

The competition among pay television providers has already forced a price cut on decoders. In December MultiChoice Kenya’s subsidiary GOtv cut the prices of its decoders to Sh1,799 from Sh3,399.

DStv subscribers on the Premium (most expensive) tariff plan currently pay Sh8,200 per month from the previous Sh7,392.

Subscribers on the Compact Plus tariff pay Sh5,550 from the previous Sh4,752, while those on Compact now pay Sh3,250, up from Sh2,940.

Prices of its low-end tariff plans dubbed Family and Access — where it is facing stiff competition from Wananchi’s Zuku TV and StarTimes, were also increased.

Zuku’s Premium tariff plan retails at Sh3,999 after a 25 per cent cut in August last year. StarTimes’ StarSat comes in four tariff plans, with the most expensive being the Super bouquet at Sh2,499 (88 channels).