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Smart TV switches off its Kenyan ops

Gareth van Zyl
By Gareth van Zyl, Editor, ITWeb Africa
Johannesburg, 08 Feb 2012

About 2 000 Kenyans, who subscribed to Smart TV, now have obsolete decoders, after the pay-television provider went bust this week.

The operator, which is owned by Transmex, is the latest casualty in Kenya's pay-TV sector following GTV, which closed shop in 2009, owing to financial pressures. Problems have plagued Smart TV ever since the operator started its Kenyan business.

Local media houses sued the operator last year for not paying licence fees to broadcast their channels and content. Smart TV won the case. However, its sales, following the verdict, became sluggish.

Subsequently, the pay-TV service made the mistake of adopting digital video broadcasting-terrestrial (DVB-T1) technology instead of DVB-T2, which has superior picture quality and is to be adopted as the set-box standard for Kenya later this year.

Transmex's partner, Swedish investor Next Generation Broadcasting (NGB), also withdrew its support for Smart TV last year to explore opportunities in South America and China. Now, Smart TV's closure has left the company with debt of more than $1.2 million, according to Web site Advanced Television.

“We have closed shop and are currently shopping for an international investor following the exit of the Swedish investors - Next Generation Broadcasting (NGB) - which has put us into financial constraints,” said Mohammed Nyaoga, chairman of Transmex, in a statement.

Smart TV's collapse leaves only two pay-TV operators in the country, South African-owned DStv, which has 124 000 subscribers; and Wananchi, which has 20 000, according to research by Informa Telecoms & Media.

“Kenya's growing middle class and its rapidly-developing and liberalising telecoms and media environment create potential opportunities for pay-TV services. But it is also clearly a tough market in which to succeed,” says Matthew Reed, a Middle East and Africa analyst for Informa Telecoms & Media.

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