Digital migration to cost billions

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 12 Aug 2008

The migration from analogue to digital signalling for terrestrial broadcasting - as used by the SABC and etv - will cost billions of rand, says government. However, it insists the benefits will outweigh the costs by a factor of 10.

Communications minister Ivy Matsepe-Cassaburri and director-general Lyndall Shope-Mafole yesterday said the migration was mandated by the International Communications Union, a United Nations agency.

It would cost about R800 million in support of state signal carrier Sentech, and another R2.45 billion in subsidies for poor households via the Universal Service and Access Agency of SA. The fund currently has about R800 million and Matsepe-Cassaburri plans to raise the rest by increasing the 0.02% levy telcos pay on revenue to the fund to 0.1%.

Middle-income households and the broadcasters themselves will have to invest millions more in new equipment, as well as retraining.

But Shope-Mafole insists this is worthwhile. "The benefits far outweigh the challenges... More than 10 times," she said at a press briefing on the subject, at a Midrand hotel.

The minister and DG said benefits included boosting e-government, the local electronics industry, local content and content providers, in addition to freeing a substantial amount of broadcast spectrum.

Shope-Mafole noted this saving will allow for eight more terrestrial television channels after 2011 when analogue television transmission ends, as well as more space for wireless broadband, most likely WiMax. "That's what everyone is clamouring for.

"Spectrum is a scarce resource. We need to balance the needs of the public and private sector. ICASA [the Independent Communications Authority of SA] will decide what spectrum goes where," Shope-Mafole added.

Set-top boxes

Matsepe-Casaburri confirmed that everyone who wants to receive terrestrial broadcast signals - as opposed to accessing television via satellite dish - will need a R700 set-top box (STB).

The minister had expected this to cost about R400, around the same as a DSTV decoder, but because of extras, the price had escalated.

The extras, which the minister variously described as "ice-cream" and the "cherry on top", include security features to deactivate the box if it is stolen and render it useless outside of SA.

"The price was arrived at not by ourselves, but in discussions with the manufacturers," Matsepe-Casaburri added.

Shope-Mafole added that other features, which she did not describe in detail, would enable "e-government". The STB will have unspecified "accessibility features" that will allow for targeted information delivery, particularly to the very poor, who - along with everyone else possessing a STB - will be registered by name and address in a government database.

Priority will be given to services that "deliver the biggest developmental impact," the DG added, stressing "our slant is developmental".

She also noted that the majority of households have neither e-mail nor Internet access.

To offset the cost of the STB to the poor, a subsidy of R490, subject to a strict means test, will be available. That means the indigent will "only" have to pay about R210 for a STB.

DOC calculations show that about 6% of SA's 7.5 million television-owning households subscribe to satellite TV and arguably do not need STBs. The other 94% do and at least 62% of them, about 4.5 million households, will need the subsidy.

That leaves a requirement for over seven million STBs and the department expects to parcel out the work to the six existing STB manufacturers and new entrants. The incumbents are Altech UEC, AMAP-Tedelex, RC&C, Sabertec, Tellumat and Vectronics.

Shope-Mafole was thin on details of who would have what work share, suggesting that a consortium would be formed and that details are to follow. This endeavour may, however, fall foul of the Competition Act as a consortium of the type described - selling a product at a set price - can be recast as a price-fixing cartel.

The duo is also keen for the migration policy to create a "world-class electronics manufacturing industry" in SA that will start with STBs and then diversify. They also foresee the STB technology migrating into "integrated digital televisions" within five years.

That means all imported televisions will first have to be "acclimatised to the SA environment".