It appears that General (Ret.) Siphiwe Nyanda, the new communications minister, doesn't care much for the previous incumbent's grand scheme to establish a government-sponsored local set-top box manufacturing industry. See, for example, recent news articles by Candice Jones, Audra Mahlong and Nicola Mawson.
The suspicion all along was that someone was feathering their nest for when their term in office expired. That nest is, perhaps, no longer needed.
The original plan was for government to procure set-top boxes for digital terrestrial television (DTT) from a consortium, probably led by Altech's experienced decoder maker, UEC, which developed most of the specifications. This consortium would be licensed to make and sell the boxes to consumers.
The state-approved group would employ previously-disadvantaged people, particularly women, and exclude foreign suppliers, on whom South Africa is "loathe" to rely, in the words of former director-general, Lyndall Shope-Mafole. The ultimate aim appeared to be to use tax funds to seed an electronics manufacturing industry in South Africa, both by awarding the tenders or licences to a hand-picked consortium, and in subsidising consumers to buy the product from the monopoly so established.
I once speculated on who might emerge as shareholders of such a venture, but that speculation is now moot.
Minister Nyanda appears keen to get the bureaucratic red tape out of the way, so manufacturing can start in earnest.
Ivo Vegter, ITWeb contributor
The general's plan is much more in line with the freedom that South Africa's constitution espouses. Perhaps he also knows, thanks to the military's ill-fated Rooivalk helicopter project, what can happen if an isolationist government tries to create a local industry from scratch, in the face of established competition elsewhere.
Instead of mandating local manufacture or licensing a monopoly, minimum standards are to be set by the SA Bureau of Standards. These include, for example, MP4 video capability, a feedback channel and a working USB port. Minister Nyanda appears keen to get the bureaucratic red tape out of the way, so manufacturing can start in earnest.
This leaves any manufacturer free to make boxes that meet the standard. At least two, the aforementioned UEC, as well as Nashua Electronics, have expressed their intention to compete in this market. It would not be surprising to find that foreign manufacturers will also want in on the action, and the competition will likely result in higher quality, more features and lower prices for consumers.
The only question that remains is how the R2.5 billion subsidy for poorer households will be paid. Hopefully, it will not take the form of a contract with one supplier to supply these subsidised units. Better to pay the subsidy directly, as a voucher or a rebate, to the consumers in question. This will leave them free to choose the brand they prefer and ensure that healthy market competition remains unaffected.
General Surprise is making a surprisingly good first impression. His instinct appears to be to leave risk-taking capitalists free to compete in an open market. Long may it last.
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