2010 offers ideal digital opportunity

2010, and the much-anticipated Soccer World Cup, offers a good opportunity for SA to speed up the relevant processes and make technology available to all South Africans, says Fernando Usera, Accenture SA managing executive: communications and hi-tech.

The need to move SA onto a digital broadcasting platform before 2010, as well as Telkom's moves into the IPTV space, have been well publicised recently, as have the associated challenges with rolling out digital television technology in SA.

Says Usera: "In the past three years, post the Net boom and bust, companies have been excessively prudent in terms of investments. This is changing now with IPTV."

The opportunity here for SA is huge, he says, noting that investment needs to be made pragmatically and practically. "But," he says, "we need to look at how we can speed up, or accelerate things [the move to digitisation]."

Local regulation is a challenge, he says. "The regulation needs to focus on avoiding problems of competence. It can also help to speed things up. It is very important that things don't stop while the market waits for regulations. ICASA, for example, could look at how it could speed things up in terms of facilitating the move to a digital world."

IPTV, says a survey released by Accenture* in February, is likely to yield significant returns in the first three years of service. According to a statement released at the time: "The business case for IPTV, its value-added benefits and its potential remain strong," said Dan Elron, MD of Accenture's communications practice.

"In the long-term, the key to achieving high performance through IPTV is to be visionary, ambitious and open to innovation from many sources. For the shorter term, the key is to quickly adapt to consumer feedback and jump over technology hurdles."

Further, says the statement: "When asked what they believed would be the principal revenue source for IPTV, about half (46%) of the industry executives surveyed selected advertising. However, network operators, as a subset of all respondents - which included equipment vendors, consumer electronic companies, content providers and broadcasters/studios - disagreed, with three-quarters (74%) of network operators saying they believe subscription fees for premium content will provide the largest recurring revenue stream, followed by basic content subscription fees and then advertising fees."

On the other hand: "One-quarter (25%) of respondents said the primary short-term obstacle to IPTV adoption is a quality-of-service issue relating to unproven architectures, low bandwidth and other technology issues. The same number (25%) said they believe quality-of-service issues will be resolved over the next three years, leaving stiffer competition from alternative TV providers as the toughest challenge to the adoption of IPTV. Another challenge to IPTV adoption, cited by 19% of respondents, is high subscription fees due to the high cost of network access and equipment."

* The Economist Intelligence Unit surveyed 341 media executives in October 2006 to identify their beliefs about the potential of IPTV. The survey, conducted via e-mail, covered 46 countries in three major geographic regions.