A preliminary Assessment of pricing and Competition concerns in broadcast and Multimedia markets in Uganda

1. An Assessment of Pricing & Competition
Concerns in Broadcast & Multimedia
Markets in Uganda

2. Regulatory Mandate
Uganda Communications Act 2013 Anti Trust Mandate
 5(1)(n) - Competition
Regulation
“to promote competition,
including the protection of
operators from acts and practices
of other operators that are
damaging to competition, and to
facilitate the entry into markets
of new and modern systems and
services
Pricing & Competition Concerns in Broadcast Markets

3. Regulatory Mandate Cont’
Tariff & Pricing Mandate
 5(1)(e) - Mandate
“to regulate rates and charges for
communication services with a view to
protecting consumers from excessive
tariffs and to prevent unfair
competitive prices”
Consumer Protection
 5(1)(k)
“to promote and safeguard the
interests of consumers and
operators as regards the quality
of communications services and
equipment.”
Pricing & Competition Concerns in Broadcast Markets

4. What we see in the market today
 Liberalization of the market has led
to the proliferation of actors in the
broadcast space
 More than 250 FM radio & 28 TV
Licensees
 Take the form of community &
commercial radios - Terrestrial FTA
TV, Satellite Pay TV, cable TV etc.
 The ecosystem also has a number of
emergent independent production
houses and a number of foreign
based FTA streams like Star times,
Kwese, Multichoice among others
Pricing & Competition Concerns in Broadcast Markets

5. Multi country player
 Uganda is home to a number of
regional actors in the broadcast
space
 Kwese, DSTV, Nation Media Group,
Zuku
 Multi country presence of these
actors may position them in
positions of unmatched strength
against local actors
 The small indigenous actors may
have their work cut out
Pricing & Competition Concerns in Broadcast Markets

6. OTT Broadcast Channels
 Vevo, You Tube, Netflix are here to
stay.
 OTT Broadcast brings onboard
regulatory and oversight challenges
on the part of the regulator
 Inequitable application of rules and
penalties
 These eat into local advertising
revenues without the attendant
tax and regulatory obligations
 As of recent, the government has
introduced ugx 200 on OTT
services
Pricing & Competition Concerns in Broadcast Markets

7. Cross media Ownership
 The ecosystem has allowed a few
actors to have multi – market
presence running TV, Radio and
print media
 Examples; Vision Group, Nation
Media Group, CBS/BBS, Top TV/Top
Radio etc
 Synergies and scale & experience
effects/economies are at hand
 May provide privileged/difficult to
match cross platform bundling
opportunities for advertisers and
sponsors by single market actors
Pricing & Competition Concerns in Broadcast Markets

8. Content Resale Obligations
 There is no framework for the
resale of media rights of premium
content in Uganda
 Rights to premium content like live
sport and entertainment are often
times obtained on commercial
exclusive agreements.
 exclusive ownership of premium
rights is the most important entry
barrier e.g Startimes exclusivity on
Ugandan Premier League rights
 Other competition authorities like
COMESA are probing the ownership
and sale of premium content like
CAF tournaments
Pricing & Competition Concerns in Broadcast Markets

9. Limited Pricing Transparency
 non- rate card offers by different
media houses are being offered to
consumers
 Bundled/Tied price offerings (One
price bundle for print & radio)
 Possible predatory pricing behavior
 National Association of Advertisers
(NAB) and Uganda Media Owners
Association (UMOA) have made
attempts to guide their members
Pricing & Competition Concerns in Broadcast Markets

10. Broadcast Mergers and Acquisitions
 The market has witnessed a couple
of M&As, strategic partnerships and
Exits
 Ex: WBS, NMG – Dembe FM, Capital
– Buddu FM
 Few leverage scale and experience
economies while many are simply
borne of the need to survive
 May lead to unintended abusive
conduct in the market like price
excessiveness, foreclosures, price
discrimination among others
Pricing & Competition Concerns in Broadcast Markets

11. General Low Profitability
 Some broadcasters allege general
low industry profitability.
 This may be the result of;
 Predatory pricing conduct
 Unfair trade agreements with
satellite and terrestrial
carriers
 Lack of advertising standards
 General industry inefficiency
Pricing & Competition Concerns in Broadcast Markets

12. Methodology
 Choice of regulatory intervention
must be founded in good
understanding of the ecosystem
and the inherent lines of
commerce
 This is usually through an in-depth
market definition and market
power assessment exercise
 Market Definition: identification of
competing services
 Markets can be defined in 3
dimensions; structure-conduct-
Performance
 Time, geography and product-other
dimensions that can be used
 Market Power Assessment – extent
to which a firm or group of firms
can profitably act independent of
others
 A SSNIP test is used
Pricing & Competition Concerns in Broadcast Markets

13. Candidate TV Markets
Pricing & Competition Concerns in Broadcast Markets

14. Candidate Radio Markets
Pricing & Competition Concerns in Broadcast Markets

15. Preliminary Regulatory Options
 Reference signal distribution
prices(satellite, terrestrial,
fibre/cable)
 Model carriage agreements
(Commercial FTAs and Satellite
carriers)
 Retail Price Floors
 Must Offer Must Carry Obligations
 Mergers and transfer guidelines
 Regulatory Guidance on cross
media ownership
 License amendment proposals
Pricing & Competition Concerns in Broadcast Markets

16. References
 Uganda Communications Act 2013
 Tariff and Accounting Regulations 2005
 Standards for general broadcasting programming in Uganda 2015
 https://www.mtn.co.ug/en/products/internet/Pages/OTT-Services-.aspx
 Common Market for East & Southern Africa(COMESA) Competition Commission.
www.comesacompetition.org
Pricing & Competition Concerns in Broadcast Markets

17. Created for GSMA, Competition
policy in the digital age course
By Umar Billy Ssemakula
Pricing & Competition Concerns in Broadcast Markets