Digital migration the next eNatis?

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 13 Aug 2008

Digital terrestrial television (DTT) migration may be the next "eNatis", combining good intentions with vast ambition and short deadlines.

Analysts are giving the venture to migrate from analogue to digital terrestrial television broadcasts the thumbs up, but caution that the three-year deadline is too short.

Cabinet approved the Department of Communications' broadcasting digital migration policy last week and the department has spent most of this week "selling" the concept to stakeholders.

"The announcement comes as a relief to the industry, as so much was on hold pending the details," says World Wide Worx MD Arthur Goldstuck.

"Most positive of all is government's commitment to inclusiveness, as this is one of the few technology policy decisions of recent years that has the likely effect of benefiting the poorest-of-the-poor.

"But it also has the potential of further frustrating precisely those it is intended to benefit," Goldstuck cautions.

Ambitious deadlines

"The timeframe for digital migration appears far too short, given that industry transformation must still take place before the set-top boxes (STBs) are produced, and the STBs must first not only be produced, but also be approved, before roll-out can begin."

Goldstuck adds: "Roll-out is projected to start around mid-2009, giving us just over two years to get the boxes not only to around seven million households in total, but - as part of that total - around 4.5 million subsidised boxes to the poor - all of whom have to qualify for the subsidy according to a process yet to be set out.

"We need to learn from recent history that mass roll-outs of this kind don't work in a very short timeframe," he warns.

In this connection, he cites the debacles of the driver's licences and vehicle registration systems (eNatis), FICA (Financial Intelligence Centre Act) requirements at banks and the failures associated with Hanis (the Home Affairs National Identification System) and RICA (the Act requiring full identification and address details with the purchase of SIM cards from July 2006).

"FICA and RICA were only about getting information from customers, for whom the banks and cellphone already had contact information. Here we are expecting a mass roll-out that requires both information collection and product distribution, in an environment where most of the beneficiaries are rural or deep-rural households," he says.

"Even when the analogue switch-off date of November 2011 was first announced in 2007, it appeared too ambitious. With time, we are seeing just how much more ambitious it is.

"Given that the global deadline for analogue switch-off is 2015, and given the huge logistic challenges the roll-out poses, a 2013 or even 2014 deadline would have been more appropriate."

STB price tag

Goldstuck and Africa Analysis Team media analyst David Moore also have concerns about the cost of the STB.

"On the face of it, the R700 price tag would be cheap for a device that delivers on all the requirements that have been laid out: addressability of the device, remote disabling, feedback path, interactivity, remote control, etcetera," says Goldstuck.

"However, given that more than seven million of these devices are required, it is surprising that it costs twice as much as the basic M-Net decoder, which does not enjoy anything like the same economies of scale.

"At R400, to which the allocated subsidy is then applied, the poor could receive the decoders at no cost, and resistance to analogue switch-off would be almost non-existent."

Moore agrees the decoders are too expensive for many households.

"As stated, the price was originally R400 before the extra functionality was included... While these functions may be useful if fully implemented, they might not be worth the extra R300 to the less-affluent households," Moore says.

"And there is still the fear that the SABC will be able to use the return path feature to shut off the decoder for those that don't pay their TV licences. They have stated that it will not be used for such, but the capability is there, and their position could change."

He cautions against a comparison with M-Net, noting that MultiChoice heavily subsidises its decoders, "and has recently increased that subsidy substantially" to lock-up the pay-TV market before the new licensees enter the market next year.

"They have never released exact figures, but a rough estimate would be that they subsidise their decoders by around 50%, possibly more for their standard decoders. The R399 decoder you mentioned was R799 just a few months ago, and a PVR would cost at least R4 000 if sold at full-price."