Govt kick-starts set-top box industry

Johannesburg, 08 May 2008

Government has scrapped the tender for the development of a set-top box (STB) manufacturing strategy, opting to develop the blueprint for a new industry internally, ahead of SA's migration from analogue to digital TV.

Communications director-general Lyndall Shope-Mafole says the proposed strategy would build a completely new STB manufacturing industry, encouraging the entry of new players, while also including existing ones. Currently, only Altech UEC has the capability to produce STBs.

The plan is to encourage previously-disadvantaged groups, including women, to enter the arena, as the country is loathe to rely on international suppliers, explains Shope-Mafole.

She adds that the strategy will include an analysis of the domestic electronic manufacturing sector and will recommend an optimal roll-out plan for STBs. This will include an analysis of possible incentive and support schemes and viable distribution networks in primary and secondary cities.

It is expected that this initiative could cost the state anywhere between R2.8 billion and R4 billion, depending on the migration model adopted.

However, Shope-Mafole points out that, while government will aid the poor through the incentive and support schemes, consumers will have to purchase STBs at their own expense.

The strategy is expected to be completed by mid-June, and consultants have already been appointed. But Shope-Mafole says this does not mean the STB industry will be up and running at the time of the dual-illumination deadline, set for 1 November.

"The two are not necessarily related. What is strictly related is the 2011 analogue switch-off, after which there will be no analogue signal."

She explains that government is not prioritising STBs, but rather the inception of a whole new industry, which will also evolve with time.

"Obviously, at some stage, when STBs are no longer required, and a new gadget is developed, the industry will be repositioned to do that."

Government will launch an awareness campaign this month, which will inform consumers about digital migration and its impact.

Sentech funding

Sentech previously noted it is on track to roll-out digital terrestrial television (DTT) infrastructure to cover 56% of the country by November.

However, the state-owned entity needs R295 million funding to extend this to the rest of the country, and plans to have 92% covered by 2010, says media relations manager Polly Modiko.

It further needs R917 million to cover DTT operating expenses during the dual-illumination period, she notes.

Sentech submitted a comprehensive business plan to the Department of Communications and National Treasury in which it demonstrated it needs the money, adds Modiko.

Logically, Sentech will not be in a position to meet its targets of the national roll-out, if government does not allocate the required funding for DTT, she says.

Sentech CEO Sebiletso Mokone-Matabane previously noted the state-owned entity also lacks the financial resources to cover the cost of dual-illumination internally.