Sentech will pump almost R1 billion into infrastructure over the next three years to build a platform that will make over-the-top (OTT) content delivery a reality.
The state-owned entity is evolving to be prepared for the converged digital communications ecosystem, a necessity because of its investment in digital television, as well as pending market disruption that will be caused by digital TV and the converged content distribution ecosystem.
To build its new business, Sentech will invest R902.3 million in capital items over the next three years, although its financial performance depends on several issues being wrapped up, including the launch of digital television, and new broadcasters being licensed, it notes.
The state signals provider is set to develop digital multi-screen content distribution and management network services that will offer community and public television content on an array of devices, including tablets, smartphones and PCs. Coupled with this, it is accelerating its efforts - in collaboration with the private sector - to develop custom-built content distribution network services, which will also include OTT services.
Sentech is turning the Soccer World Cup hub at Nasrec into a content management, play out and disaster recovery centre, which - from the start of the 2016 financial year - will pilot an OTT platform delivering content directly to user devices, including television, laptops, tablets and smartphones.
Open to all
These concrete plans, contained in its recent presentation to the dual communications committees, outlining its corporate plan for the next three years, give impetus to its 2013 aims to change the way it distributes content through an ambitious project that seeks to put SA's television - and other offerings - onto personal devices and PCs around the country.
Citing PricewaterhouseCoopers research, Sentech says the OTT market is expected to double between 2013 and 2017 to reach R709 million in spend each year. "South Africa, as most territories in the world, is experiencing an unprecedented surge in the on-demand and over-the-top content distribution and consumption segments."
Sentech's goal for the next three years, informed by government's plans, is to provide an "open access interoperable platform service that enables universal access to digital content and communication services for all South Africans".
To do this, it says it must look further into the future, in which rapid technological changes are the only constant detriment of advancement, while consumer preferences constantly evolve. It notes that, as a result, content aggregators, broadcasters and ICT service providers want to serve customers on "all available digital networks".
Disruptive
Ovum analyst Richard Hurst notes Sentech - no longer the problem child it once was - is perfectly poised to offer a free-for-all content platform because of its broadcasting network. He says this will likely prove to be more profitable than its signal distribution service, but involve less investment.
Hurst adds this could disrupt mobile operators' plans of offering content over their own networks, although the cellular companies could choose to climb on board with Sentech as its platform would have a bigger reach.
If Sentech moves fast, it would have an edge over other players planning similar offerings - such as Telkom, Hurst says. While OTT is now finally on the way, he notes it remains to be seen whether Sentech can meet its own deadlines. "Luck favours the brave."
In a bid to meet its aim, Sentech has rolled out digital terrestrial television to 84% of the population, with the balance to be covered by satellite by the end of next March. It has also launched Freevision, a direct-to-home satellite platform, and installed mobile terrestrial broadcasting infrastructure at two sites (Brixton and Helderkruin in Johannesburg) with plans to launch a test pilot in the third quarter of the current financial year.
Sentech is also talking with broadcasters and handset makers to make mobile TV - on the European DVB platform - a reality. Yet, the short- to medium-term is challenging because of regulatory uncertainties and shifting spend in the entertainment and media segment. It is confident the ICT policy framework will be reviewed in the 2015 financial year, which will provide long-term certainty, a pro-competitive regulatory regime, and streamlining of state communications infrastructure.
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