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4.5.6 Affordability of Set-top Boxes
In addition to the issues surrounding the availability of appropriate STBs, the penetration of digital television services was also hampered by prohibitive STB costs. Digital receivers, mainly imported from Europe and Asia, were unaffordable for average users. A considerable proportion of the cost was attributed to the required import duty. In addition, the uncertainty created by the various delays in the ASO, due to the inability of SIGNET to deploy its network as well as the litigation, discouraged STB vendors from investing in large quantities of STBs . This also contributed to the shortage and the resulting high cost to end users. In an effort to eliminate device cost as a barrier to consumer uptake, the government took some steps to improve affordability; the import duty for the devices was eliminated, CAK waived vendor registration fees and reduced type approval fees for digital receiving devices from Kenya Shillings 20,000 to 4,000. It further relaxed the minimum device specifications by making the conditional access feature optional for FTA STBs, reducing the price more. The importation, distribution and supply of set-top boxes was fully liberalised and opened to any registered vendor who obtained type approval from the regulator. This approach effectively left the supply of STBs in the hands of the private sector with competition driving prices down.
There are two types of STBs in use in Kenya- FTA only and a combination of Pay TV/FTA- with consumers being able to decide on the receivers that best suit their needs. The above -outlined measures, which liberalised the STB market supply, worked. The Kenya case shows that reducing taxes and fees and allowing market forces to drive the supply of STBs stimulates the production and import of STBs and significantly reduces the production and import of STBs and significantly reduces the cost of STBs to end users .