Internet penetration revolutionising pay TV services

Wednesday June 27 2018


By Christine Kasemiire

Kampala. The advent of 4G internet services and its further diffusion across the country is a development that has revolutionized the Pay Tv industry today.

Businesses now enjoy the benefits of operating at internet speeds almost in line with the global economy, making them more competitive, while on the domestic front Ugandans are now able to access variety digital products such as Netflix common in most parts of the world but were unavailable to Ugandan audiences until recently.

According to experts, this has led many people to start asking whether the availability of Over The Top (OTT) services means Ugandans will stop subscribing for pay-television services such as DStv. After all they are a lot cheaper on a monthly basis and their content more up to date.

Ms. Tina Wamala, Multichoice Uganda Public relations officer says while it’s easy to imagine this will be the case the reality might be somewhat different.

“First and foremost it’s important to note that many Pay Tv companies already offer live streaming online services which are exactly the same as OTT. MultiChoice for example has DStv Now, a free internet based service that allows its subscribers to watch live television on their phones, tablets or phones. All a person needs to do is pay for a subscription on any of the bouquets, download load the App and for as long as the subscription is active and the person has internet connectivity they can watch as many as 20 channels at no extra cost,” she says.

Beyond this Pay television companies offer a much more wholesome content experience suitable for the entire household unlike OTT service providers who primarily offer movies. A typical pay television bouquet has a wide range of channels including News, Cartoons, Documentaries and most importantly live Sports. Imagine telling the soccer mad Ugandan subscriber you can watch all the movies you want but not the 2018 FIFA world cup.

Then there is the issue of pricing. OTT service providers appear cheaper on paper but when you factor in the twin cost of internet and subscription it suddenly becomes a lot more expensive. A typical monthly unlimited internet package goes for between Shs 200-300,000 if you add in the OTT subscription of about $30 you are well above what the pay tv companies charge. A standard package starts from as low as 33,000 on DStv access to 280K on DStv premium which is the most expensive bouquet.

However, she said there is still a problem of Internet coverage and bandwidth. “Despite great strides having been made in 4G internet coverage the reality is that the service is not yet 100% stable even in major urban centers,” Tina says.

A lot of the time the service drops to 3 or even 2 G meaning the viewer ends up experiencing buffering or a total loss of signal.

The question of whether or not improvements in internet speeds and advent of OTT services will lead to migration en-mass by Ugandans from Pay tv companies such as MultiChoice is far too early to predict. Perhaps the best way of determining which way it will go is to look to the West where OTT services and Pay television operate side by side with most people using them both in a complementary manner.

Other Pay Tv service providers have joined DSTv in having their services on the go through partnering with telecom companies to subsidize data rates to allow viewers to watch some content online. There are currently seven telecom companies in Uganda which are majorly offering both voice and data services.

According to the statistics from Uganda Communications Commission, the telecom sector in Uganda has registered growth in the 3rd quarter of 2017 registering a 10 per cent increase in internet users who rose from 15m in 2016 to 17m in 2017. The estimated mobile internet subscribers increased to 14.8 million up from 13.3 million people in 2016. Prepaid Internet subscribers increased by 3 per cent registering growth from 23m recorded in 2016 to 24.2per cent in last quarter of 2017. The internet penetration per 100 persons also increased by 6 per cent recording 48.2 per cent in 2017 up from 45 per cent recorded in 2016.

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