Government's ambitions to provide free set-top boxes to as many as eight million needy households is pushing the cost of digital migration way beyond the current budget.
Cabinet initially set aside R2.45 billion to subsidise decoders for the poor, but that was only at half the price of the box, for five million homes. This amount was also before government decided to subsidise aerials, and fully cover the cost of boxes, and also does not take into account other expenditure - such as content production and installation.
As a result, say commentators, the entire cost of moving SA off analogue television is ballooning out of control and is now heading towards R6 billion, if not more. South Africa has been moving towards migration since 2006, but will miss the International Telecommunication Union's 17 June deadline.
Heading for disaster
Democratic Alliance shadow telecommunications and postal services minister Marian Shinn notes the February budget allocated R1.2 billion over the next three years to digital TV, via the Department of Telecommunications and Postal Services. This gives R109 million to Sentech for dual illumination for this year, and just over a billion to the Universal Service and Access Fund.
However, after February's budget, Cabinet and the Department of Communications (DOC) decided to "arbitrarily" move from a regime in which decoders were subsidised based on income, to one in which the boxes are free, says Shinn.
In addition, the Universal Service and Access Agency of SA's (USAASA's) most recent presentation to the Parliamentary portfolio committee on communications indicates the number of homes that need free boxes could be as high as eight million. USAASA is meant to issue tenders for decoders and aerials for 5.2 million Cabinet-approved homes this month, and these bids have been said to be worth as much as R4.3 billion.
USAASA will also enlist private companies to handle installation of the decoders and aerials, while the strike-beset South African Post Office will handle delivery logistics, says Shinn. She adds: "The full costs are exceptionally opaque. I increasingly feel ...that we are heading towards a disastrous rollout."
Sekoetlane Phamodi, co-ordinator at the SOS Coalition, adds Sentech will need funding for at least two more years because switchover will take at least three years overall. The DOC has yet to announce a turn-on date for digital TV.
No clarity
LINK Centre senior lecturer Charley Lewis notes USAASA had been granted R1.8 billion between 2011/12 and 2015/16 for the decoders and project management, but says there does not seem to be an installation cost available. He adds the R2.45 billion ring-fenced by Cabinet was based on a 70% subsidy for five million boxes at R700 each.
However, says Lewis, with a 100% subsidy, the cost for decoders alone jumps to R3.5 billion. Should eight million homes need boxes, the cost would leap to R5.6 billion, although the 2011 census indicates about two million of these homes have DSTV, he adds.
Independent broadcast analyst Kate Skinner says there does not seem to be clarity on how many households will be covered by the subsidy, which is a "critical issue". Lewis says the bigger cost is going to be installation and configuration of the subsidised boxes, which could add a billion or two to the rollout.
In addition, says Lewis, a help line also needs to be set up and manned. "It's a hydra-headed project, which is going to cost many more billions than the numbers currently being trumpeted around."
Skinner notes the cost of providing new content has also not been catered for. "Ultimately the migration process is about content. It is the big carrot in the whole equation. But if we are not going to be getting new, fresh, compelling content ...then there will be no reason to jump through all the hoops to get a free box or buy a box."
The problem, says Skinner, is that there has not been enough central control over the process, a situation that was partially caused by a high turnover of communications ministers, and then the creation of two ministries last year.
The DOC did not respond to a request for comment.
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