Why the picture remains fuzzy

South Africa’s yet-again delayed migration to digital television is a turn off for opportunities for local set-top box (STB) manufacturers to export home-grown decoders into the rest of Africa, and will hold up any hope the country has of speeding up universal broadband access.

Digital television was one of former communications minister Roy Padayachie’s priorities during his short tenure. He anticipated creating a vibrant local electronics manufacturing market that would provide Africa with the 100 million decoders it requires to convert the signal for viewing on old boxes.

Padayachie also expected digital migration to create thousands of jobs; one of government’s key 2011 priorities.

Last month, newly-installed communications minister Dina Pule" rel=tag>Dina Pule said the anticipated April turn on will not happen, and pushed out launch until the third quarter of the year. She said STB manufacturers would not be ready in time.

However, the reason manufacturers would not have boxes on shelves in time for South Africans to enjoy the most significant update to TV since it launch in SA in 1976 is because several key issues are still outstanding, and green buttons cannot be pushed until those are sorted out.

RURAL BENEFIT

The move to digital TV is also linked to expanding broadband in rural areas. The shift will free up chunks of white space in the 800MHz range – the so-called digital dividend.

Roy Padayachie

Spectrum in 800MHz is ideal for mobile broadband in rural areas because it requires that fewer towers be put up to provide coverage; which makes it cheaper for operators to expand. However, space in this frequency range cannot be used until SA moves off the old-fashioned analogue signal.

SA has set itself the target of broadband for all by 2020, a target analysts have already rubbished as being too ambitious. In addition, estimates indicate that it would cost about R100 billion to provide 100% coverage.

Towards the end of last year, the Independent Communications Authority of SA (ICASA) published a framework to license spectrum in the coveted 2.6GHz and 800MHz bands. The authority has proposed doing away with auctions and is instead inviting proposals from operators.

Frequency in the 800MHz band will only become available once SA has migrated to digital television. However, the authority has kicked off the process to allow operators to prepare for when spectrum becomes available.

However, while ICASA initially aimed to have allocations wrapped up by the end of April, the deadline has been moved out. As a result, while operators will be able to plan, they will not be able to actually switch on the latest generation of mobile broadband in rural areas on 800MHz – Long Term Evolution – until SA turns off analogue signal.

That is set to happen towards the end of 2013, a year-and-a-half before the International Telecommunications Union (ITU) stops protecting analogue signal. When protection ceases, countries will be able to broadcast in such a way that their signal interferes with that of another country.

LOOSE ENDS

However, before South Africans can enjoy the benefits of digital television, several aspects still need to be wrapped up.

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Arthur Goldstuck" />Pule said national standards would be gazetted this month, and regulations will be published by March. However, she did not clarify the thorny issues of set-top box controls, which the department said last September it wanted to control.

The DOC’s desire to control the encryption tool, which is meant to stop subsidised boxes from being stolen and used outside of SA, raised fears that the entire process would be delayed.

The control mechanism was initially set to be determined by free-to-air broadcasters etv and the South African Broadcasting Corporation (SABC). In August 2009, the stations jointly issued a request for proposals for digital terrestrial television set-top box control software.

However, the DOC argued that leaving controls up to current players could cut off competition in the sector, which is expected to delay the process of getting boxes into shops on time.

About 10 million households will need boxes to continue watching TV after analogue is switched off, and about half of those will be subsidised by government to the tune of R2.45 billion.

Altech UEC MD Rodger Warren says “once the regulations have been promulgated, it is then necessary to finalise the STB standards and from there it will take a minimum of nine months to manufacture and get STBs onto retail shelves”.

Warren adds that, only when ICASA finalises the digital television regulations with the broadcasters in terms of frequency allocation and spectrum use, will there be any movement in terms of implementing DTT.

DiViTech COO Bertus Bresler says, while the new deadline is more realistic, delays cause a loss in momentum and disinvestment, which leads to less job creation. “To build a STB industry, you have to launch the product at the right time in its technology cycle, otherwise there won’t be enough money in the product to fund development and build an industry.

“The delays have caused many of the players in the electronics industry to lose motivation and move their focus elsewhere,” notes Bresler. He says the businesses that closed down last year will never re-open.

The DOC intends using the move to digital to stimulate a local STB manufacturing industry, which would target the African market. The department’s concept is for larger companies such as Altech UEC, which also manufactures satellite decoders, to share knowledge with smaller, empowered firms to create a sustainable electronics manufacturing sector.

“As a means to achieve universal service and access in digital terrestrial broadcasting, basic STBs will be made affordable and they shall be sourced primarily from South African manufacturers. This is part of government’s vision to contribute to job creation and South Africa’s global excellence in the manufacturing of STBs,” states the September 2008 broadcasting digital migration policy.

However, despite the DOC’s assurances that it wanted to grow a local industry, intentions that were repeated in the draft STB manufacturing strategy released in October 2009, the endeavor fell by the wayside until Pule said in January that the STB manufacturing strategy for digital television had been finalised and would be presented to Cabinet this month.

In the meantime, several smaller companies have been badly affected, with some having to lay off staff and others shifting their focus to projects that will brig in revenue.

ABT, which came close to closing its doors in 2010, has retrenched staff and lost investors, president and CEO Muzi Makhaye has said. The further delay is a serious blow to the sector and its ability to create jobs, he said.

Seemahale chairman Thabo Lehlokoe has said the company has refocused on alternate sources of income and has “kept the [STB] fires burning quietly on the side”. He said the company would have gone out of business if it “sat and waited”.

Seemahale trimmed its resources, while it waits for government and has lost out on potential income, said Lehlokoe.

RETRO FITTING

After Padayachie announced in January that SA would migrate using DVB-T2, Sentech has needed to refit its transmitters. The target is 80% population coverage by the end of March this year, just before the previously-planned “soft” launch in April.

Spokesperson Nthabeleng Mokitimi has stated that the state signal provider had covered 60% of the population with DVB-T, which was endorsed by Cabinet in 2006, before the more efficient DVB-T2 was decided upon.

Mokitimi said the sites that had been digitised were being converted to DVB-T2, a process that would be mostly completed by the end of March. The aim was to “to provide a fully operational DTT network in support of the official launch in the country”. A trial network is currently on-air, covering a third of SA’s population, in Johannesburg, Durban and Pretoria. “Sentech is on track to ensure that affected broadcasters migrate from analogue to digital television within the government set timelines,” noted Mokitimi.

Sentech has already spent R500 million on gearing up, and was set to spend another R900 million, said Mokitimi.

LONG AWAITED

Digital migration has been plagued by delays since it was first mooted in 2006. Government initially decided to use the European DVB-T standard, and industry started gearing up to take advantage of the opportunity to sell local technology in SA and into Africa.

Migration stalled in 2010 year when the Department of Communications decided to investigate the use of the Brazilian upgrade to the Japanese ISDB-T standard. Padayachie announced in mid-January 2011 that SA would use DVB-T2, along with most countries in the region.

Bresler expects commercial launch, optimistically, in the fourth quarter of this year. “This is a massive project with many stakeholders and complexities making 10 months not much time to get everything in place.”

World Wide Worx MD Arthur Goldstuck says the core problem with the digital migration strategy is that it is aimed at meeting two goals: digital migration and sector transformation. “You can’t have both within the given timeframe, and you were never going to be able to have both within the deadline at hand.”

Goldstuck says he challenged the original deadline as unfeasible, but was told it would be made to happen. “We challenge the current deadline too, but now we have the added evidence of inability to move quickly, nimbly and flexibly with regard to technical as well as overall project specifications. Ironically, only the much-maligned Sentech is likely to meet the required deadlines.”

The real issue is that two ideals – digital migration and sector transformation – have been conflated into the same goal, says Goldstuck. “They are two separate issues and goals, and as such should be kept separate.”