After all pay TV service providers lashed out on the commission because of the proposed 2,400% increment in the licensing fees, UCC held a meeting on 26th/04/2018 with them to come to a mutual understanding of the public notice that was published earlier. The commission may have been misunderstood after Red Pepper published what the commission representatives have flagged as fake and misleading news.
In the meeting, the discussions were centered on;
✔ Clarification on licensing framework.
✔ Clarifying on the percentage increase contrary to the communication from Pay Tv operators.
✔ A shift from fixed fees to a % of GAR.
The meeting that took place at UCC House in Bugolobi was attended by representatives from different Pay TV seevice providers. Mr. Mutabazi said that all license issues with Pay TV operators will be ironed out by the end of May. He added that, “We had a meeting earlier today on [the] way forward & the industry is very stable.”
The primary objective for UCC’s change in licensing regime include;
1. Ease market entry and increase competition.
2. Increase Consumer choice.
3. Provide for a Technology neutrality.
4. Efficiency of Convergence in services and technologies.
The new licensing regime promises to redefine the broadcasting sector. It is aimed at aligning broadcasting with the rest of the Communications sector. It has specific provisions for consumer protection and choice. The new regime classes broadcasting services further into Free to Air (FTA), Subscription (Pay) – National(10 or more geographical regions) or Regional(1 to 9 regions), Hybrid and Subscriber Management classes. This has widely been benchmarked with several countries regionally. But it didn’t get a warm welcome from Pay TV service providers.
The misunderstanding
Previous misunderstanding included threats by some Pay Television providers to increase customer fees under the current licensing regime. The commission has since reminded the ‘ill mannered’ Pay TV service providers about its mandate to regulate rates and tariffs of communications services. UCC requires Operators’ rates charged to reflect costs incurred offering those services & price increments justified. UCC is also mandated to promote and safeguard the interests of consumers as regards to communications services in Section 5(1)(k) of the Communications Act. The new licensing regime recognises these obligations, fosters innovation & growth of the sector.
Also, UCC says the 2400% purported increment was a deliberate misrepresentation by a section of Pay Tv providers to evade obligations under the law. “A more perspective individual should ask, how much has each operator paid in license fees over the last 3yrs? Welcome to corporate dishonesty.”
The UGX 20M referred to in the Pay TV service providers statement is the fee per station in the previous license regime. So if a national provider had 20 station, that means they would have previously paid UGX 400M. But with the new license regime, UCC wants each Pay TV provider to pay 500M no matter how many channels they have. “We are now saying, pay 500M regardless the number of stations, the more the better for you.”
UCC is on the consumers’ side.
The Pay TV saga has revealed corporate greed of the investors that are allowed to make business in Uganda. These companies are willing to put customers at ransom to arm twist the regulator and conveniently misrepresent facts. Surprisingly, they pay much more money in countries like Kenya, Tanzania, Malawi, Botswana and Ghana (for those operating there) of which some of these countries have comparable economic environments to Uganda.
In a tweet, head of consumer protection at UCC, Ibrahim Bbosa says, “The Big Five Pay TV providers made UGX. 287,075,391,000 last year in revenues. The law requires them to make a levy of not more than 2% GAR which they claim they can not afford and each to pay an annual license fee of about UGX 500m which they claim is exorbitant”
Pay television providers are against Tariff approval requirements claiming it is not necessary in a free market economy. So who is to ensure Consumer protection and price stability? Approval of tariffs is a statutory requirement in the sector which means any increment must be cleared by the regulator. In doing so, if operators put a case for an increment, the regulator weighs this against a multitude of economic and social factors for approval or rejection.
Its important to state that many Free to Air channels have for a long time been carried on Pay Television where we pay subscriptions and these guys have not given due consideration. The Hybrid license will empower local content providers to get their fair share of the cake. The broadcasting of Free To Air channels as free channels is good for the consumer especially given the public outcry on the same issue that has been discussed widely in stakeholder forums. The Commission reiterates that FTA channels be available as free channels on all platforms and should not be carried on subscription platforms unless it is intended that the channels remain on air when subscription runs out. Mr. Bbosa tweeted, “Why switch off #FreeToAir TVs when your subscription runs out? @UCC_Official is putting an end to that.”
Timeline of events leading to the new licensing framework.
On 30th August 2016, UCC informed Pay TV’s of intention to suspend issuance of licenses for subscription based services until completion of a framework review aimed at aligning broadcasting with technology neutral licensing regime applied to the rest of the Communications sector.
On 30th August 2017 following a yearlong extensive consultative process, the Commission developed a draft authorization framework.
On 5th September 2017, all the operators were notified on the completion of the process.
On 2nd October 2017 following internal approvals, a proposed framework was presented to all pay platform providers for input and comments. It was agreed at this meeting that operators provide written comments to the proposed license regime by end of October 2017.
On 2nd November 2017, UCC received a joint written comments from the following players; Kwese, Gotv, Multichoice, Star DTV, Wananchi Group, Azam Media & individual submissions from Multichoice Uganda, Kwese Support Services Ltd and Kampala Citi Cable.
On 3rd November 2017, the licensing framework was Gazetted – Gazette No 62.
On 21st November 2017 between UCC & Pay TVs, the Commission responded to input from Operators clarifying the spirit, process and motivations of the proposed framework which was subsequently adopted and resolved to become effective on 1st January 2018.
On 21st December 2017 following a petition by the Pay TV providers to the ICT committee of Parliament and Minister of ICT, the Commission presented a report clarifying and explaining on the same issues.
On 12th March 2018, a reminder was sent out requiring all Pay TVs to apply for preferred licence categories within 14 days from the date of notice and to date they have not adhered to this requirement.
On 24th April 2018, the Commission issued a public notice in regard to the Pay TV Providers. Ooh and the licensing framework was Gazetted So which executive does not read the Gazatte?
Pay TV service providers were clearly not ambushed. They were fully aware and put on notice on what was coming but deliberately gave a deaf ear. Maybe they considered this just another day in Uganda? The commission is clearly determined to stop the exploitation of Ugandans by these giant Pay TV service providers.
Ugandans may recall GTV a satellite televison provider that closed some 10 years ago. These guys used delaying tactics of protracted negotiations with the regulator then, made their money and vanished on morning. The country is not getting a repeat of the same. This is a transformative year for the commission and no matter how much noise the Pay TV service providers make, the broadcasting scene is getting a facelift.
