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Competition policy in digital era course
- 1. An Assessment ofPricing & Competition Concerns in Broadcast & Multimedia Markets in Uganda
- 2. Regulatory Mandate Uganda CommunicationsAct 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 seein 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 andAcquisitions 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 ofregulatory 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 CommunicationsAct 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