South Africa could save more than R1 billion by rolling out a less complicated analogue-to-digital converter to poor households that will require the set-top box subsidy.
The country is gearing up to switch to digital television in April next year and turn off outdated analogue broadcast by the end of 2013. However, South Africans will either need to replace television sets, or buy decoders to convert the signal for viewing on older televisions.
Cabinet has set aside R2.45 billion to subsidise about five million poor households and will cover about 70% of the cost of the set-top box, which is projected to come in at about R700. The price tag could be higher depending on final specifications that still have to be wrapped up.
M-Net director of regulatory and legal affairs Karen Willenberg says SA could save just over R1 billion by adopting boxes that retail for as little as R350, which is about half the current proposed cost.
Government wants to use the boxes to deliver interactive services to citizens and is also looking into a control mechanism that will prevent stolen boxes from being used outside of the country. However, this adds cost to the decoder.
Willenberg says stripping out these aspects and rolling out a basic set-top box will save the country at least a billion rand.
Economic enablement
There are about 10 million households with televisions in SA, and government aims to aid five million of the poorest households by subsidising 70% of the cost of the decoder, Willenberg says.
However, this means poor South Africans will still have to pay R210 in order to continue watching television, notes Willenberg. She explains that SA could choose a cheaper box, subsidise households by 100% and still save more than R1 billion.
Willenberg points out that the Digital Migration Group found that about 4.4 million South Africans would not even be able to afford to pay anything for a decoder and would need a fully-subsidised box.
“Issues of affordability are critical in SA; if you want this to work, you can't go with the Rolls Royce of set-top boxes,” says Willenberg. “Where are these people going to find R210?”
Peter Balchin, CEO of Altech Multimedia, says abandoning the concept of set-top box controls would trim the final cost and allow decoders to be on shelves within a shorter time frame.
Balchin says it would be possible to strip out even more cost if an entry-level box, at around R200, were used. He explains that these entry-level boxes could co-exist in the market with more sophisticated sets.
Government could cut the cost of subsidising boxes for migration in half if it used a simpler box and abandoned the idea of interactivity, says Balchin.
While the simple converters are available across the globe, manufacturers in SA would be in a good position to produce them, which would support government's aim of using migration to reinvigorate SA's electronics sector, says Balchin.
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