Safaricom has applied for a digital broadcasting license that will see it enter into the Pay Tv market with video on demand programs.
The move is a preparation to tap into its parent company Vodafone, which joined hands with popular streaming video on demand service, Netflix. The offering could be rolled out in Kenya to offer movie and TV content.
Netflix avails original content such as movies on high definition to Pay Tv, devices including Apple devices and gaming platforms.
“We have applied for a number of broadcasting licenses to support our wider strategy to launch a comprehensive TV service for our subscribers. However we are still in the initial stages of discussions with content providers and will be able to respond more comprehensively on what content subscribers can enjoy once we have all the required licenses,” said Mr Stephen Chege, Director, Corporate Affairs, Safaricom.
Not a surprise
According to Standard Investment Bank, Safaricom has also applied for an internet protocol television license; a subscription management services license and a terrestrial subscription broadcasting services license.
“The license applications are not entirely a surprise. Safaricom already has a set-top box (STB) device to deliver triple-play (telephone, TV and internet) services,” said SIB yesterday in a statement.
SIB further said the lack of unique content on the set top boxes has slowed down their uptake. Also the high cost of the devices is to blame for the slow uptake.
“We do not see this as likely to be a big profit generator in the near term, but is clearly positive for the telco, which positions itself in an important growing broadcast segment (and especially critical for internet data traffic growth),” said SIB.
Its entry into TV is the latest move to diversify earnings away from the traditional revenue streams of voice and data. The development is likely to shake the segment kindly controlled by Wananchi Group’s Zuku, which offers triple play services — pay TV, broadband Internet, and fixed line telephony.