Digital terrestrial television (DTT) was likely to become irrelevant should South Africa’s migration from analogue to digital broadcasting signal not be accelerated with urgency, investment holding company Kagiso Media warned on Wednesday.
Speaking at the Independent Communications Authority of South Africa (Icasa) hearings on the Draft Diversity and Competition in DTT regulations, the company said that, as satellite pay television (TV) gained traction in the broadcasting industry, digital take-up could fail, as demand for terrestrial digital signal faltered.
Kagiso cited the market's growing preference for high-definition (HD) satellite pay TV services with several channel offerings, over analogue standard definition free-to-air broadcasting with limited channels.
DTT, if the spectrum was allocated efficiently, would enable the free-to-air and pay TV terrestrial broadcasters to offer significantly more channels, some of which could be in HD.
However, several roadblocks have hampered the country’s digital ambitions since 2006.
The continued delay prevented broadcasters from offering a multichannel bouquet, which would enable them to increase advertising revenue and broaden their audience, free-to-air broadcaster e.tv noted.
Kagiso commented that “there is a real danger of DTT failing if delayed any longer, as satellite [broadcasting] takes over”.
There were no clear digital switch-on and signalling dual-illumination dates, the emerging broadcaster said, adding that the country was years behind other countries, including some African countries.
Concerns had emerged that the migration would only reach completion by 2020, instead of the 2015 deadline promised by the Department of Communications (DoC), with Kagiso citing the “difficulty” of undertaking the project within two years.
The South African Broadcasting Corporation (SABC) said significant challenges remained, including the public’s limited awareness of the project, the accessibility of set-top boxes (STBs), signal availability, funding, audience fragmentation and the public’s resistance to change.
It added that any further delays would result in the rise of satellite pay TV, resulting in the public broadcaster and free-to-air operators losing ground.
The SABC's market share had declined from 71% in 2001, to 53% in 2012, as DStv increased its share from 13% in 2007, to 31% in 2012.
Further, the delays in rolling out the project, combined with the delays in issuing new licences, were likely to further hamper the introduction of competition on the digital platform, Kagiso added.
Kagiso expected the licensing of new broadcasting entrants on the DTT multiplex 3 to be finalised before June 2015. The group said the licensing process should not be another factor weighing on digital migration.
However, potential new entrants into the digital broadcasting sphere were labelled as a threat to incumbents, which demanded incubation during the dual-illumination period.
The SABC countered that while it welcomed new broadcasters into the industry, they should only be licensed following the completion of the migration, to ensure the viability of existing broadcasters, which were injecting significant funds into the digital roll-out, resulting in narrowing profits.
The sudden introduction of competition, which would hold minimum obligations, owing to its late entry, would “flood” the market and position the new operators with an unfair advantage, the broadcaster believed.
“It would be in the best interests of the industry to focus on the migration without exacerbating the delays with the addition of new entrants,” the broadcaster added.
Meanwhile, the various broadcasters also presented their views on the SABC’s call for an in-depth market review to gain a better understanding of the current market and its needs, as well as to assess the readiness of the market to carry new players.
The public broadcaster insisted the study precede the issuing of the licences for DTTs multiplex 3 – a concept slammed by Kagiso.
Kagiso was of the opinion that Icasa should rather conduct a review parallel to the licence applications to avoid dragging out the approval process any further.
It also believed that, owing to rapidly changing market dynamics, any results from a study would be outdated and obsolete, regardless.
E.tv expressed a preference for an examination of the impact of pay TV on existing free-to-air players, while other studies would consider the impact of DTT on the role-players.
The broadcasters were asked by Icasa to table their proposed terms of reference for the proposed study within seven days.
Meanwhile, Kagiso stated that the inter-operability of STBs was a requirement to ensure DTT's market success and stimulate competition. TV-owning consumers would require a STB to gain access to the digital broadcasting signal.
Limiting broadcasters’ access to the STBs would require consumers to acquire several STBs to access all the content offered by the various broadcasters, which would only benefit the decoder manufacturers, Kagiso stated.
It suggested implementing Icasa-regulated amendments to ensure existing broadcasters include access when establishing standards for the manufacturing of STBs.
The DoC, SABC, e.tv and other broadcasters, under the guidance of Icasa, were currently in talks to establish access control for the decoders.
Following this, the DoC would award the long-awaited tender for the manufacture of the subsidised STBs.