Digital migration and broadcasting licensing framework abridged version 11 05-2015

DIGITAL MIGRATION AND BROADCASTING LICENSING

FRAMEWORK

• Gazette Notice No. 9291 issued by the Cabinet Secretary, Ministry of Information, Communications and Technology on 30th December 2014 provided the schedule of three phase switch off of analogue transmitters.

• This is in line with the Geneva 2006 (GE-06) Agreement that set 17th June 2015 as the international deadline for complete switch over from analogue to digital broadcasting.

• Kenya, as a signatory to the Treaty, is obliged to switch off analogue signals by the deadline.

Digital Migration Policy

Digital Value Chain Digital TX 1 DVB T2

Digital TX 2 DVB T2

Antenna Ordinary TV Set

STB

Consumer

Content Service Providers

1.

2.

3.

4.

5.

Multiplex

Benefits of Digital Migration

1. Released frequencies (digital dividends) will be used to roll out other telecommunication services

2. Conservation of environment through sharing of resources

Digital platform – Transmitting Site.

Analogue Platform- Transmitting Site.

3. Better Picture and Sound Quality

Analogue (Standard Definition)

Digital (High Definition

4. Business opportunities such as new media houses/ content providers, STB vendors, aerial installers/repairers

.

Increased channels on the digital platform

Analogue Switch Off Deadlines

i) Nairobi and its environs - 31st December 2014.

ii) Mombasa, Malindi, Nyeri, Meru, Kisumu, Webuye, Kakamega, Kisii, Nakuru, Eldoret, Nyahururu (Nyadundo), Machakos, Narok and Londiani (Rongai) - 2nd February 2015.

iii) Garissa, Kitui, Lodwar, Lokichogio, Kapenguria, Kabarnet, Migori, Voi, Mbwinzau/Kibwezi, Namanga and all other remaining sites - 30th March 2015.

STATUS OF DIGITAL MIGRATION

• PHASE 1: - MIGRATED

• PHASE 2: - MIGRATED

• PHASE 3: Only KBC had TV Transmitters in these sites

• site-by-site approach adopted.

• Vuria site migrated

• Remaining sites to be migrated before June 2017

LICENSING FRAMEWORK

Licence category Duration (years) Applic fees (KSHs) Initial licence fees (KSHs)

Annual Operation- fees (KSHs)

1. 1 Public Radio BS (non-commercial)

5 5,000 50,000 50,000

1.2. Public TV BS (non-commercial)

7 5,000 100,000 100,000

2.1. Public Radio BS (commercial)

5 10,000 100,000 0.5% 0f annual gross turnover or 100,000 whichever is higher

2.2. Public TV BS (commercial) 7 10,000 200,000 0.5% 0f annual gross turnover or 100,000 whichever is higher

3.1 FTA Radio (Commercial) 5 10,000 100,000 0.5% 0f annual gross turnover or 100,000 whichever is higher

3.2 .FTA Radio (community) 3 1,000 15,000 15,000

4.1 FTA TV (commercial) 7 10,000 200,000 0.5% 0f annual gross turnover or 100,000 whichever is higher

4.2 FTA TV (community) 5 1,000 30,000 30,000

MARKET STRUCTURE-SPECTRUM BASED LICENSES

LICENSING FRAMEWORK ../4

Licence Category Duration Application fees (KSHs)

Initial licence fees (KSHs)

Annual operating fees (KSHs)

5. Digital mobile TV 7 10,000 100,000 0.5% of annual gross turnover or 100,000 whichever is higher

6. Broadcast signal distribution

15 10,000 15,000,000 or by tendering process

0.5% of annual gross turnover or 1,000,000 whichever is higher

7. Terrestrial subscription TV 10 10,000 100,000 0.5% of annual gross turnover or 100,000 whichever is higher

8. Cable subscription TV 7 10,000 100,000 0.5% of annual gross turnover or 100,000 whichever is higher

9. Internet protocol TV (IPTV) services

5 10,000 100,000 0.5% of annual gross turnover or 100,000 whichever is higher

10. Satellite subscription TV 7 10,000 100,000 0.5% of annual gross turnover or 100,000 whichever is higher

11. Subscription management services

7 10,000 100,000 0.5% of annual gross turnover or 100,000 whichever is higher

12. Landing Rights Authorization (for TVRO, International Cable Services

N/A 10,000.00 USD $12,500 N/A

NON SPECTRUM BASED LICENSES..4.2

LICENSING OF COMMERCIAL FTA TV

• The broadcasters only need a licence for the content aspect since the signal distributor provides the infrastructure.

• The broadcaster (content provider) enters into a commercial agreement with the signal distributor for their channel to be carried.

• The TV Content can be broadcasted countrywide or in specific broadcast area, as the BSD can undertake local insertion of the signal

DIGITAL TV MIGRATION CHALLENGES

• Litigation challenges from broadcasters due to the transformation of the market that was bound to affect their business model.

• Availability of set top boxes • Digital Network rollout • Misinformation of the general public with

regard to the digital TV migration process and set top boxes options (FTA vs. Pay)

MITIGATION OF CHALLENGES

• Affordability/availability of compliant Set

top boxes – minimum specs, Announcement

of analogue switch off date, duty waiver,

open market, track uptake of set top boxes

• Government ability to fund digital migration

vis a vis other priorities. – additional signal

distributor licenced

• Legal challenges – Consultative approach

MITIGATION OF CHALLENGES

• Demonstrate that the benefits of digital

migration outweigh the challenges.

• Maximum tariffs for charging broadcasters

in the digital platform

• Service Level Agreements (SLA) Guidelines

to be used by Signal Distributors

• Effective Consumer awareness

Set Top Boxes & iDTV

• Supply of STBs/idTVs fully liberalised, only requiring type approval and vendor registration

• Minimum specifications developed and publicly available (www.ca.go.ke, print media).

• Type approval already issued for over 70 DVB-T2 FTA STB models

• Set top boxes sold as at April 2015 1,551,958 (Source-Vendors returns).

In addition, there are approximately 1,350,000 stocks.

Role of Consumers and Vendors

• Consumer’s responsibility • Buy only compliant type-approved set top box • Insist on warranty and official receipts • Confirm dealer has necessary authorization from CA • Report any vendor selling STBs non type-approved by CA

• Set top Box Vendor/dealer responsibility • Register as a vendor with CA • Apply for type approval and only sell type approved models • Issue official receipts, warranty, after sales backup • Demonstrate to consumers how to connect the STB • Display type approval certificate from CA

FUTURE OUTLOOK

HDTV

MOBILE TV

Distribution of Digital Signals in moving cars, buses & Public Places.

Demand of DVB-H (Mobile TV) receivers like mobile phones, laptops etc

INTERACTIVE TV

NEW FACE OF BROADCASTING

DVRs and ad-skipping

Alternative leisure: gaming

Alternative

TV/VOD platforms

THANK YOU