High taxes, expensive local content hurting pay TV industry, says player

Azam TV general manager Simon Arineitwe (L), demonstrates to Vice President Edward Ssekandi (C) and Information and National Guidance Minister Rose Namayanja how the station functions during the launch in Kampala on Thursday. PHOTO BY FARIDAH KULABAKO

What you need to know:

Competition. New entrant joins the industry which already has six pay TV companies.

Kampala. Azam Tv management has asked government to waive taxes on equipment used in relaying pay-tv services, saying high taxes have stifled penetration and are a threat to meeting the June 2015 digital migration deadline.
Speaking on the sidelines at the official launch of Azam TV in Kampala on Thursday, the firm’s general manager, Mr Simon Arineitwe, said the industry pays 49 per cent of revenue in taxes that include 25 per cent import duty on dishes, 6 per cent withholding tax and 18 per cent Value Added Tax.
This is in addition to the 0.5 per cent Uganda National Bureau of Standards (UNBS) levy and the railway contribution levy, which they consider as deterrent for more people to afford pay-tv services since they (taxes) are all passed on to the final consumer in form of high prices.

Government asked
Although government waived the 25 per cent import duty on decoders, Mr Arineitwe said the waiver should cut across all equipment used in pay-tv to make services affordable and facilitate digital migration.
“Pay–tv products need to be as cheap as possible because they serve as cardinal steppingstones for Uganda to migrate from analogue to digital broadcasting. More tax waivers or cuts will enable more people who own television sets to get on board and not be left out as the country transits to digital broadcasting,” he said.
According to statistics from the Uganda Communications Commission, Uganda had five million TV sets as of December 2012, and analogue accounted for over 90 per cent. This means that only a handful of Ugandans use pay-tv services as majority cannot afford the high installation costs and highly priced monthly subscription.
Vice President Edward Ssekandi urged Azam-tv to focus on socio-economic concerns that affect people and air well researched programmes to avoid legal battles.

About azam tv
Azam Tv is a subsidiary of Bakhresa group of Companies. It first launched in Tanzania in December last year and it plans to venture into other countries in sub-Saharan Africa including Kenya, Zambia, Rwanda, Malawi and Sierra Leone this year. Subscription can be done through MTN or Airtel Mobile Money and any Payway service machines and agents country wide.

Player to tighten competition in pay-tv

Azam-tv, a subsidiary Bakhresa group of Companies, is expected to stiffen competition in the industry that now has about six players including Dstv, GOtv, Zuku, StarTimes and Pearl.
Players have in the past few months been fiercely competing by slashing prices, among others, to retain customers and also attract new ones. Azam-tv, which uses satellite technology, charges an initial fee of Shs250,000 that includes a High Definition (HD) decoder, dish and installation fee.
Unlike the other service providers that segment packages, Azam has a single package at Shs25,000 per month for over 50 local and international television channels. StarTimes on the other hand charges Shs16,500 for the basic bouquet, Shs33,000 for classic and Shs60,000 for the unique bouquet per month while Dstv charges Shs24,000 for the Access package, Shs45,000 for Family and Shs160,200 for the premium bouquet, among others.