Competition Heats Up In Kenya's STB Market
StarTimes Media has announced that it will sell a combination free-to-air and pay-TV set-top box (STB) in Kenya for KES4,999 (US$57), undercutting competition by a considerable margin. StarTimes Media is a Chinese STB and digital television broadcasting company with a large presence in East Africa, particularly in Tanzania and Burundi, which have already begun the transition from analogue broadcasting to digital terrestrial television (DTT). While BMI believes StarTimes is making a strategic entry into the East African STB and pay-TV market, we do not expect its lower priced STBs to result in a major uptake in sales.
With the purchase of a StarTimes Media STB, customers receive a free one month digital TV subscription to 70 channels. After the initial month, customers have the choice of continuing the subscription or dropping it and retaining access to free-to-air channels. Reportedly, there are 1mn television sets in Nairobi and 4mn in Kenya as a whole, yet according to the Communications Commission of Kenya (CCK) only 12,000 free to air and 200,000 pay-TV STBs had been purchased by late May 2013. StarTimes is making its competitive offer, which undercuts Kenya's 20-plus other free-to-air STB retailers by KES1,500 to KES5,000, in time to take advantage of an expected growth in STB sales in the summer, as the analogue TV switch off date for September 2013 approaches.
However, there is no certainty the transition from analogue to digital broadcasting will result in a real surge in STB sales. In Tanzania, where analogue broadcasting was switched off in Dar es Salaam and five other regions between December 2012 and April 2013, STB sales have not been significant. The regulator does not provide any information on STB sales, but local reports claim that somewhere between one sixth and one out of 11 of television owners have purchased STBs. The Media Owners Association of Tanzania, the major lobby group opposed to an early transition to DTT ahead of the International Telecommunication Union's July 2015 deadline, quotes the high cost of STBs as one of the main obstacle to transition towards DTT in Tanzania.
|StarTimes In Africa|