In 2015, the Communications Authority of Kenya contracted M/S Analysys Mason Ltd to undertake a comprehensive Broadcasting Signal Distribution (BSD) cost modelling exercise. The exercise was meant to review the existing BSD framework in Kenya, taking into account the prevailing market developments and provide a comparative analysis that aligns with global best practices. The findings of the review would then inform the development of appropriate pricing framework that would foster the development of access and competition in the broadcasting sector in Kenya.
Following its completion, the Communications Authority of Kenya has now announced the lowering of the monthly signal distribution fees for television broadcasters. Under the new rates, broadcasters will pay Kshs. 89,545 per megabit per month for signal distribution within Nairobi and its environs down from the current Kshs. 125,990 translating to a 29% reduction. The cost of distributing digital signals in other major towns will come down by 60% to Kshs. 37,311 from the previous Kshs. 93,202. The television broadcasters will now pay Kshs. 32,961 monthly fees for signal distribution within remote areas.The new rates became effective on 1st December 2016.
The new rates became effective on 1st December 2016 and present a big win for new broadcasters on the digital platform who have previously complained about expensive distribution costs charged by the two signal distributors, Pan Africa Network Group (PANG) and KBC-owned Signet. The new BSD framework consists of two main components: a price cap for broadcasting charges on a new cost model, and a Reference Access Offer (RAO) describing the services to be provided to broadcasters by the two national BSD operators.
The study also recommended that all channels must pay all the listed charges for the services used, except that the charges for must-carry channels included in pay-TV bouquets are to be paid by the pay-TV provider rather than the channel.