South Africa's inability to pick a digital terrestrial television standard - and stick with it - could spell the end of an industry that has yet to get off the ground.
Local set-top box (STB) manufacturers are concerned the market could be flooded with Chinese and Brazilian imports. This is because a key specification has been left hanging while the Department of Communications (DOC) dithers about which television standard to implement.
SA decided in 2006 to implement the European DVB-T standard. However, in April it controversially started to review the decision, and is now pondering the Brazilian version of the Japanese ISDB-T standard - a move that has stalled the entire migration process.
One of the issues yet to be resolved is a STB control, which would protect the local industry. The control would ensure only approved decoders that meet the specifications will be able to receive television signals from free-to-air broadcasters.
STBs are required to convert the old analogue signal for reception in digital. Only people who own a television with a built-in digital tuner will not need the decoders and SA has a potential market for 10 million boxes.
Vital stimulus
The DOC intends using the move to digital to stimulate a local STB manufacturing industry, which would target the African market. The department's concept is for larger companies such as Altech UEC, which also manufactures satellite decoders, to share knowledge with smaller, empowered firms to create a sustainable electronics manufacturing sector.
However, despite the DOC's assurances that it wanted to grow a local industry, intentions that were repeated in the draft STB manufacturing strategy released last October, a key protection measure has stalled.
Last July, the South African Bureau of Standards released hardware specifications for manufacture of decoders.
However, the Digital Dzonga, which was overseeing digital migration and has since been dissolved, warned manufactures not to go ahead with production because the software specifications, which would include the STB control element, had not been approved.
Since then, the standards seem to have been moved off the table while the DOC contemplates switching to the Brazilian digital television standard. This has raised concerns that the market could be flooded by Chinese or Brazilian manufactured boxes.
Floodgates
Shaun Hendricks, managing executive of Tellumat's strategic projects group, hopes the control will not fall by the wayside. He says the specification needs to be well-defined because it is a way of protecting the local manufacturing sector.
Without a control, he warns, “every second grey box coming out of China ... will be able to work in our market”. Hendricks says there are many companies that are looking for a backdoor into the local market.
Hendricks says manufacturers are also battling to finish the design of the boxes without the control specifications.
No charge
Bertus Bresler, who heads up Reunert's STB project, points out that government has a duty to protect the local industry, especially as boxes can be imported without any duties being levied on them. He is confident, however, that government will put the control back on the discussion table.
Bresler has previously stated it will take at least a year for local manufacturers to get boxes on shop shelves once the standard has been decided.
Arthur Goldstuck, MD of research company World Wide Worx, says the dithering by government has negated any intended benefits for the local manufacturing sector that may have come out of the migration to digital. He warns that small companies are likely to collapse if the market is flooded.
Goldstuck says government is, in effect, abrogating its responsibility to the industry by deciding to review the standard, which has left manufacturers in the lurch. “They've completely messed up the whole process; it's been a fiasco.”
Meanwhile, Brazil has indicated it wants to sell its STBs on the Africa continent, and envisages a market of millions of people, if it gets the region to agree to adopt ISDB-T.
ISDB-T Forum VP Roberto Barbieri last week said Brazil aims to investigate the commercial opportunities of selling the boxes to SA. Barbieri says the country will also target sales of STBs into the Southern African Development Community region, a market that is potentially lucrative as it has more than 200 million people.
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