The South African electronics industry has the capacity to design and manufacture set-top boxes for digital terrestrial TV. However, the trick will be to make them cheaply and keep the intellectual property in the country, say observers.
The departments of communications and trade and industry are developing a manufacturing plan for the devices that will be used to convert digital TV signals so they can be received on a conventional analogue TV set.
According to Department of Communications statements, the plan is to have these set-top boxes (STBs) manufactured in the country and this should give the local electronics sector a boost of about R4 billion. However, details have not been released yet.
David Jarvis, CEO of ISP Uninet, which manufactures its own customer premise equipment, says making electronic components is relatively simple once the support is in place. His company took advantage of the Department of Trade and Industry's Support Programme for Innovative Industries (SPII) to set up its own manufacturing plant and bring products to market.
"They have been great in matching our spend for the research and development of our equipment. For every R100 000 we put in, they have matched that."
Jarvis says it is important to manufacture electronic products in-country and to retain the intellectual property here, because it allows a company to retain control of the upgrade path.
The fact that SA does not manufacture chipsets is not an issue, as they have essentially become commodities and the country would more than likely never match the scale of economics of which China is capable, he notes.
SPII's senior fund manager, Farouk Mangera, says the country is capable of manufacturing STBs and other sophisticated equipment.
He says SPII disburses between R60 million and R80 million per year for innovative projects and that more than half of that goes to software and electronics.
Mangera says SPII bridges the gap between research and development, and creating and commercialising the prototype product, while the actual marketing is left up to venture capital companies and the commercial banks.
Once a company has received SPII funding, it must manufacture the product here for at least three years or incur penalties, Mangera says.
"It is important that this type of manufacturing capacity is built up in SA as that is indicative of the way the economy is going."
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