JSE-listed Ellies, which provides consumer-oriented audio-visual equipment, as well as renewable energy solutions, has spent just north of R50 million gearing up for digital terrestrial television.
The company, which this morning released its interim results, is selling aerial and antennae packs into Africa, while awaiting the outcome of a legal wrangle between the Department of Communications (DOC) and broadcaster etv.
The free-to-air broadcaster took the department to court last year, arguing that the DOC's appointment of Sentech to handle set-top box controls was unlawful. Controls are meant to stop stolen subsidised boxes from being used, and prevent grey products entering the market.
The South Gauteng High Court found free-to-air broadcasters should handle controls and the issue should be regulated by the Independent Communications Authority of SA. The department has subsequently decided to appeal the matter, but continues to have discussions with broadcasters to find a solution that will not delay migration.
SA was meant to turn on digital TV last month, after a successful soft launch in the Northern Karoo. However, the court bid meant the DOC could not issue tenders for the estimated five million subsidised boxes, and turn-on has been delayed.
Pushing north
Ellies has been gearing up to benefit from migration across Africa and has spent just over R50 million on raw materials, machinery and new manufacturing plants in the past six months, says CEO Wayne Samson. He says the group sold 100 000 aerial and cable kits in Africa in December and the pipeline is good, especially in West Africa, where migration is moving more rapidly.
With the continued weakening of the rand, greater export penetration into Africa is expected to continue, says Ellies. With the growth of local production, trade within the Southern African Development Community (SADC) region is also expected to improve.
Ellies has a joint venture with set-top box producer Altech UEC to distribute decoders in the SADC region.
It reported revenue of R1.13 billion in the six months to October, up from R721.2 million a year ago, and net profit of R128.8 million, compared with R62.4 million.
The International Telecommunication Union has set the middle of 2015 as the date when it will stop protecting analogue broadcast. Samson says Ellies now has just more than 51% local content in its kits and has not been hamstrung by SA's delayed launch.
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