An attendant connects TV decoder at a supermarket. Pay TV operators in
Uganda are complaining over a flat rate introduced under the new
licensing regulations that came to effect early this year. FILE PHOTO |
NATION
In a war that initially played out in paid adverts in the
dailies, a dispute between Uganda’s pay TV operators and the
communication regulator is keeping consumers on the edge.
The
Uganda Communications Commission (UCC) wants a bigger slice of the pie
it says pay TV operators in the country have been enjoying while paying a
paltry amount in annual license fees while pocketing profits in
billions of shillings.
“We know their revenue that is
why we are saying they should pay us this much,” Pamella Ankunda, UCC
spokesperson said without confirming the figures.
The industry, according to sources at the UCC say it rakes in about Ush300 billion ($81 million) a year.
The
Pay TV operators have been locked in back-to-back meetings with the UCC
over a flat rate of Ush540 million ($145,800) under the new licensing
regulations that came to effect early this year.
The
new flat fee is a departure from a percentage sharing that UCC charged
saying it had benchmarked the practice from neighbouring countries like
Kenya.
UCC's Manager for Consumer Affairs, Ibrahim
Bbosa said “a committee has been setup comprised of all players to come
up with a percentage rate for Uganda taking into consideration what’s
happening within the region.”
“Initially we had opted for a flat fee due to challenges related to obtaining broadcasters audited financial reports,” he added.
Section
68(3) of the communications Act requires UCC to levy not less than 2
per cent on the gross annual revenue of all broadcasters, a category
where Pay TV operators falls under.
Under the previous licensing structure, a broadcaster licensee was charged Ush20 million ($5,400) per base station.
Therefore,
to operate an effective nationwide service, a broadcaster needed 27
stations which translated to approximately Ush540 million ($145, 800).
Digital migration
Following
the digital migration, the commission said it undertook an extensive
consultative process taking into consideration views of all the
stakeholders before concluding the introduction of new licensing frame
work effective January 1, 2018.
UCC said it increased
its charges after conducting a survey on digital migration in other east
African countries where there was need to review fees for preferred
licenses in the new licensing regime considering pay TV operators were
having more channels per frequency, clear images, and on top gaining
more returns on investments.
In the region Kenya
charges a percentage fee of 0.5 per cent on gross annual revenue of Pay
TV operators. Tanzania charges 0.8 per cent and Rwanda 1 per cent.
Section
44 of the communications Act requires every licensee to submit to the
commission a report on the operations and services of the license and
the extent to which the conditions of the license are followed at the
end of every fiscal year.
The EastAfrican understands
that for the past 4 years, the commission had been requesting for
audited financial records under the current licensing arrangements in
which all broadcasters failed to submit them.
In a statement dated March 23, UCC wrote to all broadcasters to comply with the new guidelines or risk their businesses closed.
The
Commission further advised the public not to deal with non-compliant
broadcasters to avoid inconvenience that may arise out of enforcement.
Presently, none of the Pay TV operators in the Ugandan market has been licensed by UCC in the current financial year.
Figures
from UCC show that there are over 3.4 million TV sets in the country
with about 2.5 million people using digital terrestrial broadcasting.
During
the digital migration, pay TV operators reduced the cost of their
services to as low as Ushs5,000 ($1) with some giving out free set top
boxes.
For example, in 2015, StarTimes had about
450,000 subscribers but after digital migration, the number grew to
about 550,000 subscribers as at the end of 2017.
Currently,
most pay TV platforms in the Uganda market charge between Ush33,000
($8.82) to Ush334,000 ($90) though many subscribers still find the
prices exorbitant.
The operators, however, say any change in the rules will be passed on to consumers directly.
The
Uganda Pay TV market is dominated by Chinese giant StarTimes, South
African Multi Choice — owners of Dstv and GOtv, Zuku TV, Kwese TV,
StarSat TV and digital terrestrial transmission (DTT).
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