DTT to add R4bn to economy

By Damaria Senne, ITWeb senior journalist

Johannesburg, 04 Feb 2008

Digital terrestrial TV (DTT) will inject about R4 billion into the South African economy, delegates heard at the Digital Broadcasting Switchover Forum, which took place in Sandton last week.

The government has undertaken to manufacture set-top boxes locally, encouraging local investment in the electronic industry and intensifying competition in that sector.

SA is migrating from analogue to a DTT platform, as required by the International Telecommunications Union (ITU).

The ITU has set 2015 as the global switch-off deadline. However, SA set November 2011 as its switch-off date, with the double illumination period starting in November this year.

Local manufacture of set-top boxes, which enable consumers to access digital signals, provides SA with an opportunity to expand its manufacturing capabilities, said communications deputy minister Roy Padayachie.

Research and development incentive schemes will also encourage local manufacturers to absorb the unemployed for re-skilling and job-creation, he said.

"The industry will need to increase investment in capital production machineries to meet the expected demand for electronic equipment, particularly set-top boxes," he said.

The DTT strategy and implementation plan shows that government will also have to invest between R2.8 billion to R4 billion in set-top box subsidies for pensioners, people with disabilities and others who need government assistance.

SA has an estimated total of 11 million households, with 7.3 million having TV sets, he said. With increased geographic coverage of the digital signal, the consumer base is expected to increase during the next three years, he added.

Exporting into Africa

SA also hopes to export set-top boxes to other African countries as they facilitate their own DTT migration.

Kenya plans to import set-top boxes from SA and elsewhere, said Daniel Obam, chairman of Kenya's Digital Migration Task Force. To achieve economies of scale for its DTT process, Kenya formed a strategic alliance with East African countries including Uganda and Tanzania, he said.

This creates an overall population of more than 100 million, he noted. Import duties on set-top boxes will also be reduced or cut completely to help keep consumer costs down, he said.

National Broadcasting Commission of Nigeria director-general Yomi Bolwarinwa said his government planned to provide incentives to manufacturers, including South Africans, to assemble set-top boxes in that country.

Proposed incentives include a five-year moratorium on import duties and a guarantee of regulatory stability, he said.

Nigeria's large population, at 140 million, also makes the country attractive as an investment destination, he said. The Nigerian government set 2012 as its DTT switch-off date.

Wealth creation

Altech UEC sales and marketing director Ian Develing notes that small and medium enterprises will also benefit from the DTT process, by providing distribution and support services.

DTT will also enable local language programming as spectrum is freed and regional broadcasting services are set up, he said.

Independent Communications Authority of SA chairman Paris Mashile noted that radio frequency spectrum will be freed up, enabling the creation of more terrestrial channels, which can be used to meet SA's development goals.