Media companies go for joint venture in race for broadcast signals

All free-to-air television broadcasters are to form a joint company that will be given a licence to broadcast digital signals across the country.

This is expected to end a stand-off between the Information ministry and local broadcasters such as Nation Media Group (NTV) and Royal Media Services (Citizen TV) who had protested over the issuing of the second digital broadcasting licence in June to Pan African Network Group, a Chinese company.

The first such licence was issued to Signet, a subsidiary of Kenya Broadcasting Corporation (KBC).

The State-owned corporation has been broadcasting the digital signals in Nairobi and its environs.

The requirement to form a joint broadcasting company is set to deny Signet and Pan African Network Group clients among existing broadcasters, pegging their business prospects to new television firms.

Kenya’s TV market is migrating from the analogue broadcasting platform to digital by next June as part of a global initiative that will see broadcasters cede transmission of their content to digital signal distributors which will earn a fee for their services.
The acting Communications Commission of Kenya (CCK) director-general, Francis Wangusi, said the Ministry of Information had written to it instructing the regulator to issue the third licence to a single company owned by all existing broadcasters.
“The firms will need to form the joint company and show proof of the common shareholding,” Mr Wangusi said.
 “Since this is an affirmative action, the award of the licence will not go through competitive tendering and we will be asking the Public Procurement Oversight Authority (PPOA) to issue this waiver,” Mr Wangusi said.
The Media Owners Association (MOA), however, says it has formed the joint company as required by CCK, but that the regulator has not made substantive steps to award them the licence.
But Mr Wangusi said the CCK was still to see the details of the joint venture, especially its ownership structure and funding mechanism.
There are more than 20 television firms currently broadcasting in various parts of the country, including NTV, Citizen, KTN, Kiss, GBS, K24, and Family.
They will have to share the cost of setting up infrastructure for the signal distribution company and maintaining it.