Set-top box manufacturers could be forced out of business because of yet another delay in turning on digital television, which is now expected to happen in the third quarter of this year.
Yesterday, recently-appointed communications minister Dina Pule said the expected April launch will not happen, as set-top box (STB) manufacturers said they would not be ready on time.
About 10 million households will need the decoders to continue watching television on analogue sets once the old signal is turned off, a deadline that has been set for the end of 2013.
However, manufacturers cannot start assembly lines until several issues are wrapped up, which is expected to happen by the end of the third quarter of this year. From then, manufacturers say it will take nine months to get boxes onto shelves.
The country has been moving towards digital television since 2006, but several switch-on dates have already lapsed. The latest delay will negatively impact job creation and will lead to producers closing down, and others consolidating, say industry commentators.
Lost interest
Pule says the delay “will have an impact on job creation, because if we were to switch on in April then already we would have had an opportunity to create jobs”. However, she believes that the later switch-on will allow SA to “create the same number of jobs that we expected”.
The department anticipates creating about 23 500 direct and indirect jobs through the manufacturing value chain.
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.
Arion Bomema Technology (ABT), which came close to closing its doors in 2010, has retrenched staff and lost investors, says president and CEO Muzi Makhaye. The further delay is a serious blow to the sector and its ability to create jobs, he adds.
Makhaye has heard of some companies that have closed down because of a lack of cash flow, and the additional delay will lead to small companies closing, or merging in a bid to stay alive.
Seemahale chairman Thabo Lehlokoe says the company has refocused on alternate sources of income and has “kept the [STB] fires burning quietly on the side”. He says the company would have gone out of business if it “sat and waited”.
Seemahale has trimmed its resources while it waits for government and has lost out on potential income, says Lehlokoe. He has heard “rumours” of companies closing because of the delays.
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