As the Universal Service and Access Agency of SA (USAASA) evaluates the tenders that will make SA's digital migration a reality, an industry association lobbies to make sure its members get up to 60% of the award.
USAASA's tender process, for the supply of set-top boxes, satellite dishes and antennas for digital broadcast migration, closed on 6 January. The agency is now evaluating the bids from 17 companies. It aims to announce the winning bids for the tender, believed to be worth R4.3 billion, at the end of this month, or the beginning of March.
Among those that want a slice of the action is the National Association of Manufacturers in Electronic Components (Namec). Its secretary general Adil Nchabeleng says it is lobbying to make sure the bulk of the decoder tender is awarded to emerging electronic manufacturers.
Although he concedes the association cannot dictate the outcome, Nchabeleng notes: "There is no way we will let government set out the process and use taxpayers' money and emerging manufacturers don't benefit."
Too late
ICT expert Adrian Schofield points out entities cannot come after the bid has closed and demand a tender be awarded a certain way, as this would be a breach of the tender process.
DA member of Parliament, Marian Shinn, notes Namec has been lobbying for some time to make sure its members benefit from the tender, and that government's position has always been that emerging manufacturers should benefit. She says, however, that with the time pressures SA is facing, and the amount of taxpayers' money at stake - around R4.3 billion - vested interests need to be put aside. "We can't have the vested interests of players jeopardising our digital economy."
It would be possible to establish subcontracting deals through which industry stalwarts, like Altech UEC, involve emerging manufacturers, but extending the net of those who take part would require specific due diligence to ensure the subcontracted companies can deliver, adds Schofield.
"The biggest risk is the delay in getting set-top boxes to market," he says, noting the companies in the supply process will need to match government's requirements, which could take some time.
Schofield is not surprised Namec is looking to further pressure government so its members can be awarded the contract, as it will be a lucrative deal and could change the fortunes of at least a few of its members. Neither he nor Shinn could comment on Namec members' capabilities, as little is known about the association, apart from a previous bust-up between its leaders over a R51 million set-top box deal.
Uplifting South Africans
Nchabeleng argues supporting emerging manufacturers will create jobs and "prop" up the electronics manufacturing sector. He adds such a deal would help establish a black electronic manufacturing class, noting SA is a net importer of electronic items. "There's a huge socio-economic upliftment and development [opportunity]."
Namec has 67 members that are at various stages of readiness and, because they bid in groups for the tender, most would be able to start producing decoders in about three months from the date of order, says Nchabeleng. He explains its members have been aligned into cooperatives based on what skills they bring to the value chain so that each venture can offer a comprehensive solution.
Emerging manufacturers only need 10 000 units a year each, and factory space of 50m2 to be viable, says Nchabeleng. He notes, in total, its members could more than meet government's targets, as the combined run rate would be around 10 million units a year, as well as supply several other African countries. However, he could not disclose which manufacturers were Namec members and had bid.
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