Brazil ready to roll
The Brazilian government wants the entire Southern African Development Community (SADC) to adopt its digital television standard, and is already running tests on the protocol in a simulated South African environment.
Brazil sees the SADC region as an untapped and potentially lucrative market, into which it hopes to sell technology and hardware to carry its relatively unknown digital TV standard.
SA is in the midst of a dual-illumination period, during which both digital and analogue signals are being broadcast. However, the Department of Communications (DOC) recently took a controversial decision to review the adoption of the European DVB-T standard, a move that flummoxed industry and could set back the entire migration process by years.
The DOC review process, launched in April, has resulted in the move to digital television stalling. Industry - manufacturers and broadcasters - had previously been running trials on the European standard and developing the decoders needed to view the new signal.
Industry expects to invest heavily in new technology if the South African government goes ahead with implementing ISDB-T - the Brazilian version of a Japanese standard. A shift in standards is also expected to add years to the migration process, and could cause the collapse of small empowered manufacturers that had invested in the hope of developing South African set-top boxes for sale to the rest of the continent.
About 10 million houses will need the set-top boxes, which are required to convert the new signal for viewing on older television sets, which can only currently receive an analogue signal. Government has set aside R2.45 billion to subsidise the boxes - which were expected to cost about R700 each - for poor households.
South African industry commentators say implementing the Brazilian standard would be problematic. They explain that millions have been spent on developing decoders and transmitters that were tested on DVB-T, and the current Brazilian protocol works on a different frequency, which would result in more time and money being spent on developing and testing new technology.
Brazil decided to adopt an enhanced version of the Japanese standard in 2006 and started testing the signal in Sao Paulo a year later. This decision was made after years of testing three global standards and met with the approval of an industry body in the form of the Brazilian Digital Terrestrial TV Forum.
Flavio Esteves, a diplomat in Brazil's Department of External Relations, says several South American countries, representing about 500 million people, including Argentina, Chile, Peru and Bolivia, have adopted the Brazilian standard. In addition, the standard is also in use in the Philippines. Esteves was answering questions from a delegation of South African journalists at a meeting of the forum.
He says the country now also wants the entire SADC region to adopt the standard, which would drop the cost of implementation, and make set-top boxes cheaper. A SADC decision on which standard to go with is expected to be made this month and published in September. SA is likely to also implement the same standard as the rest of the region.
Etv's group executive for regulatory strategy, Lara Kantor, has questioned why government is looking at changing the standard. She says there is no advantage in moving to ISDB-T, and there would be a number of disadvantages in changing now.
Kantor says the Brazilian standard is not in wide use, and there would be no economies of scale that could lower the cost of the technology. DVB-T, however, has been adopted in more than 100 countries, which brought the cost of that technology down.
In addition, says Kantor, SA operates on an 8MHz frequency range, while Brazil uses the 6MHz band, and the technology to make ISDB-T work in SA has not been locally developed. As a result, more money would have to be invested to make the Brazilian standard work in SA.
She says these factors could easily double the current expected price of entry-level set-top boxes. SA will have to import skills and intellectual property, as there is not enough time before the international analogue switch-off, in November 2015, to develop the technology locally.
Altech CTO Ashraff Paruk says the technology is not an issue, as the ISDB boxes would require another chip to be developed. However, he says set-top box manufacturing is a highly competitive business, and every additional dollar that would have to be paid for the final product trims the size of the accessible market.
In addition, says Paruk, the size of the market that may buy boxes designed to work on 8MHz and the Brazilian standard would be limited to Africa. Because of a smaller target market, he expects the prices of the boxes to be higher.
A DVB-T decoder costs under $80, but a Brazilian box, with the additional chip, could come in as high as $200, almost double what the South African government expects the boxes to cost, he says.
In addition, if SA goes with the new standard, it would be another three years before the boxes appeared on shelves. Paruk says this could mean the country would be unable to create a viable manufacturing industry that could benefit from African sales, as other players such as Chinese companies may move in on the continent.
Ready to go
However, during a visit to Brazil this week, it transpired that not only is Brazil already testing its digital television standard on an 8MHz frequency, but it has set-top boxes available for around $50, and wants to sell these boxes into SA, which could scuttle government's aims of setting up a manufacturing sector.
Towards the end of last year, the DOC released a draft set-top box manufacturing strategy. The aim of the proposal was to develop an environment in which small and empowered companies could set up manufacturing facilities with the aid of larger players to participate in the decoder market.
The strategy also wanted to create a thriving electronics sector and envisioned larger companies sharing their intellectual property with smaller players. The issue was debated in a colloquium last year, but has fallen off the radar as nothing has been heard about the concept since. An e-mail to the DOC last week to ascertain what is happening with the strategy was not answered.
Meanwhile, Brazil wants to sell its set-top boxes on the Africa continent, and envisages a market of millions of people, if it gets the region to agree to adopt ISDB-T. Forum VP Roberto Barbieri says Brazil wants to investigate the commercial opportunities of selling the boxes to SA.
Barbieri says the country will target sales of set-top boxes into the region, a market that has more than 200 million people.
Esteves adds that Brazil is in talks with countries in the SADC region, as well as other East African countries, such as Kenya and Tanzania, with a view to persuading them to adopt the standard.
Brazil has an advantage over SA, as decoders that work on the 8MHz frequency are already in production there - and were seen broadcasting high-definition digital signal in a Sao Paulo university's laboratory. Mackenzie University professor Fujio Yamada says the set-top box is expected to sell in the $50 range.
* Nicola Mawson is being hosted in Brazil courtesy of the Brazilian Embassy in SA.