East Africa’s pay TV operators in Uganda, Kenya and Tanzania have been seeing declines in their average revenue per unit as fiercer competition has forced them to lower subscription fees. While the region’s pay TV customer base was growing, operators’ ARPU had been experiencing declines for months.ARPU declined close to 18 percent a year over the last six months. According to new data,two of the region’s largest pay TV operators, DSTV and Star Times, contended that regulators should limit granting new pay TV operator licenses to improve industry growth.The fundamental problem in this business is unhealthy competition because of too many pay TV licenses.In the US, which has a bigger population and stronger purchasing power as witnessed during the Super Bowl finals between Seattle Seahawks and New England Patriots last weekend,currently there are only around less that ten national pay TV operators. With healthier competition, each operator in the US was capable of reaping high revenues, allowing them to expand overseas.
The more players in the industry meant each player would get a smaller “slice of the cake” and the region’s pay TV market size currently stood at only $100 million with around more than ten big pay TV operators.There are up to 200,000 non-paying pay TV subscribers currently in the ecosystem, impacting ARPUs and future growth potential in the sector and the phenomenon will be driven by rotational subscribers who moved from one pay TV platform to another to take advantage of promotional periods.While the number of players in the sector might pose a threat to a number of operators, relative newcomer Azam TV last year argued that the ideal number of pay TV operators should be determined by the market. Azam Tv headquartered in Tanzania’s commercial capital of Dar Es Salaam believe in the survival of the fittest.The high number of pay TV operators in Tanzania, Kenya and Uganda is benefiting consumers as pay TV subscription fees had become more affordable. However, the rivalry in the pay-tv sector in the three countries is getting fiercer with the entrance of new players applying multi-platform technologies and offering competitive services and prices. Die-hard soccer fans in East Africa have of course been tuning into broadcasters, either free-to-air or pay-television channels, in order to watch African Cup of Nation’s matches.
The 2015 African Cup of Nations going on in Equatorial Guinea and other soccer tournaments will always be great moment for pay-television especially subscription-based television services providers in East Africa to grab more subscribers, as it is a defining moment to sign up Kenyan, Tanzanian and Ugandan viewers.The pay-television sector in East Africa is known as the weakest in African continent. A recent report shows that there are only about 1 million pay-tv subscribers in the region, despite a total of some 5 million households with televisions across the region.With a pay-tv penetration rate of around less than ten percent, which is far lower than the free-to-air-television penetration rate of over 20 percent, regional firms are aiming for growth of 50 percent in pay-tv subscribers before end of this year to 3 million.New data about the region’s sector forecasts pay-television subscribers will climb to 2.5 million by 2018. The research emphasizes that this growth will depend on investment in content, distribution and new technology that benefits consumers. It adds that such a situation, however, will come at a high price for pay-tv providers.In terms of technology, Kenya, Tanzania and Uganda does not completely lag behind other countries. The three countries have deployed a broadband network allowing pay-television providers to offer good services.
Broadband is a facility that enables a reliable, high-speed transfer of data, voice, images and video over the Internet. The connectivity provided by broadband is a key factor in a larger attempt to make information and communications technology resources available, affordable and reliable for individuals and businesses around the East African region.Zuku, a Kenyan company has been at the forefront of developing this market.Broadband platform trends include cable, copper, fiber to the home commonly known as FTTH, fiber to the node or cabinet commonly known as FTTx. When deployed, broadband includes some high-speed transmission technologies such as digital subscriber line commonly known as DSL, cable modems, fiber, wireless, satellite and broadband over power-lines commonly known as BPL. In addition, there are also other platforms used for subscription-based television services, such as Internet protocol and terrestrial digital video broadcasting DVB-T.With the further development of 4G networks in Kenya, Uganda and Tanzania, premium-channel providers need to find innovative ways to take advantage of new and available platforms to provide subscribers with more enjoyable viewing experiences.