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R8bn digital migration tender under scrutiny

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 16 Apr 2015
Orders for digital decoders should be placed in the next few weeks.
Orders for digital decoders should be placed in the next few weeks.

The Universal Service and Access Agency of SA's (USAASA's) decision to award a multibillion-rand tender to all of the 27 bidders has come under fire from commentators, who argue those who won the bid may not have the capacity to deliver.

At the heart of the matter is SA's migration from analogue television to digital; a move that will free up much-needed spectrum, but has also created tension between stakeholders. Under the terms of the International Telecommunication Union (ITU) agreement, SA is meant to migrate off analogue television to a digital platform by 17 June. However, this deadline - when the ITU will stop protecting analogue broadcast - will be missed.

The biggest obstacle has been the inclusion of a control system in the set-top boxes that users of analogue TVs will need so they can continue watching TV when the signal goes digital. Although the Department of Communications has sought to resolve this impasse with its latest iteration of the Broadcasting Digital Migration policy, this policy is being challenged legally.

On track

Despite the challenge, USAASA is working towards awarding contracts under a tender it issued towards the end of last year. USAASA CEO Zami Nkosi yesterday said he was busy with the agency's legal team to ponder the implications of etv's latest legal challenge, but - without the legal wrangle - should be in a position to issue orders either tomorrow or Monday.

Nkosi has confirmed, much to some commentator's consternation, that every company that bid for the digital tenders has been appointed to provide some aspect of the hardware requirements of the tender. USAASA has enough funds to order 1.5 million boxes, which will be dedicated to border areas as well as the Northern Cape, where the Square Kilometre Array is being deployed and TV must be provisioned via satellite.

Nkosi's statements go against what ITWeb has heard from sources - that manufacturers have not been awarded a deal, but have been shortlisted - and validates a Business Day report that every bidder has been awarded a portion of the pie. "The bottom line is, these people have been appointed," he says.

Dubious deal

However, the Democratic Alliance's shadow minster of telecommunications and postal services, Marian Shinn, says it is unprecedented that every bidder will be awarded a "piece of the pie". She suggests the move is one of political expediency to ward off legal challenges from those that have lost out on a lucrative tender, which could be worth more than R8 billion.

Among those who have "won" a part of the tender - although the actual aspects have yet to be confirmed - are decoder stalwarts such as Altech UEC and Reunert's DiviTech. Other companies without a track record of making decoders are also on USAASA's list, says Shinn.

Nkosi backs up the agency's decision to give the deal to previous unknown entities by saying each was the subject of an Ernst & Young audit into their manufacturing capability. Yet, all bidders have been asked to provide further information, such as pricing, warranty, delivery periods and test reports.

ICT commentator Adrian Schofield says the bid to award the tender to every single bidder "makes one wonder what the real motive is". He cannot fathom why, apart from pandering to one interest group, no bidder was "thrown out" of the process. He notes it will be difficult to keep track of which of the 27 suppliers have delivered as ordered.

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