A cloud currently hangs over South Africa’s move from analogue to digital television broadcasting after the Department of Communications (DoC) announced in April that it would review the accepted European standard and consider the Japanese standard. Manufacturers and broadcasters alike are now anxiously awaiting the outcome of the government review, as it will determine whether years of research and investment may have been in vain.
South Africa and the world have until 2015 to move from analogue to digital television broadcasting, under an agreement with the International Telecommunications Union (ITU), after which the frequencies will no longer be protected.
In 2006, all South African Development Community (SADC) countries agreed to take on the digital video broadcasting terrestrial (DVB-T) standard as the primary technology so as to facilitate a flow of skills and technologies between the countries in the region. Mauritius has already started its digital migration process and has 70% set-top box penetration on the selected standard.
South Africa’s Cabinet approved the European DVB-T transmission standard under the Broadcasting Digital Migration Policy for South Africa in August 2008 and the acceptance of the standard was gazetted in September 2008. Communications Minister Siphiwe Nyanda also publicly committed to the deadline of November 2011 for South Africa’s own migration – a commitment which led local industry to invest millions of rands in developing set-top boxes and to run trials based on the European standard.
The DoC review, thus, came as a shock, as did the department’s announcement in April that it was considering supplanting the European DVB-T standard with the Japanese integrated services digital broadcasting terrestrial (ISDB-T) technology, thereby stalling the process of converting to a digital standard.
Considering Standards Nyanda argued that South Africa had initially failed to fully interrogate other standards, a statement that was rebuffed by both free-to-air channel e.tv and pay television channel M-Net in June.
M-Net head of regulatory and legal affairs Karen Willenberg said that the broadcaster had done a thorough investigation of all available digital terrestrial television (DTT) standards.
“In 2002, the Ministerial task team appointed the Digital Broadcasting Advisory Board, consisting of independent industry experts appointed by the Minister, which recommended DVB-T to the then Minister, Dr Ivy Matsepe-Casaburri,” she noted.
A further analysis was conducted in 2005, when the DoC set up the Digital Migration Working Body, which again recommended DVB-T to government.
Technology house Altech UEC, which designs and manufactures set-top boxes for domestic and foreign clients, reports that the European DVB-T standard and the Japanese ISDB-T standard are equivalent in terms of capability. However, the DVB-T standard has a proven record spanning about 120 countries, while the ISDB-T standard is only used in Japan and Brazil. Peru also began conversion to ISDB-T in March and it is understood that the standard is being widely adopted in South America.
Democratic Alliance shadow Minister of Communications Niekie van den Berg says he is equally perplexed by the DoC review and described the reasons given by the department for the study as “vague”.
“One of the most important considerations in choosing between the two standards is that the European standard uses 8-MHz broadband, like South Africa, while the Japanese standard runs on 6-MHz broadband. Many changes will have to be made for South Africa to run on a frequency of 6-MHz,” says Van den Berg.
State-owned signal distributor Sentech is uncertain about the implications on signal distributions, should the 6-MHz Japanese standard be chosen, but believes that there is less impact on its infrastructure roll-out than that of broadcasters, viewers and set-top box manufacturers.
“It is all still speculation. In line with the Minister of Communications’ Budget speech on April 20, 2010, Sentech continues to roll out its DTT infrastructure and, therefore, planning for any other standard is premature,” says specialist of technical regulatory and government affairs Thato Toko.
The company states that the DVB-T standard is rolling out as planned and it will continue implementing that standard until government, which is funding the project, says otherwise.
Investment and Price
The Department of Trade and Industry (DTI) reports that the transition from analogue television to digital television requires signifi- cant investment, such as transmission infrastructure, studios, content production and set-top boxes, or a new television, including a digital receiver.
DTI chief director for advanced manu- facturing Nomfuneko Majaja says that substantial investment in both equipment and human resource training will be required before the full potential of digital television can be realised. The impact of the cost on the con- sumer must also not be underestimated.
Cabinet plans to subsidise about five-million households that cannot afford set-top boxes. Funding for this support is expected to be sourced from the Universal Services and Access Fund, fed by cellphone companies. Tenders for manufacturing these boxes must still be awarded.
However, the price of the Japanese standard is estimated to be double the price of the European standard. Willenberg asserts that a DVB-T set-top box will cost about R700, while an ISDB-T box will cost in the region of R1 400. This may result in fewer government subsidies being awarded than initially planned, owing to a lack of funds.
The price of the set-top box can make or break the decision in the eyes of consumers. Altech UEC business development director Anton Lan says that volumes and time drive the costs of set-top boxes. Because of all the research and development that has already been done for the DVB-T standard, the price points will be lower for this standard.
M-Net and e.tv agreed that the adoption of a new standard would only result in additional costs to consumers, government and broadcasters.
Research and Development
Van den Berg asserts that choosing the Japanese standard can put South Africa back about three years in terms of research and development.
Altech UEC has done significant research and development around government’s requirements for interactive eservices. Lan notes that there is a good chance that this, and other stakeholders’ research, will be lost.
“Sentech has already started rolling out transmitters and the South African Broad-casting Corporation (SABC) has spent about R80-million on trials. An estimated R500-million has already been spent for the DVB-T development,” he says.
The SABC contracted technology house Reutech, part of the Reunert group, in 2006 for the local design and manufacture of its set-top boxes for digital television trials. The company invested in research and development and received significant government support for the local design and manufacturing of the set-top boxes under its subsidiary brand, Nashua.
No Turning Back
By 2008, Reutech had supplied the SABC with more than 2 000 locally designed and manu-factured set-top boxes. “There’s no turning back; we have acquired specialised skills and knowledge, which has allowed us to develop this product for South Africa and Africa, and are ready to start manufacturing,” says Reutech head of the set-top box project Bertus Bresler.
Meanwhile, Reutech has also investigated the ISDB-T technology. Bresler concedes that the company can apply some of the research and development already done to design and manufacture set-top boxes for the Japanese standard in three to six months. However, it will be a setback and will probably be significantly less cost efficient.
“Reutech is capable of supplying a million set-top boxes for the tested DVB-T standard right now, if required. But to manufacture the ISDB-T standard that runs on 6-MHz or 8-MHz broadband, depending on government’s final decision, will involve a whole new process,” he explains.
M-Net CEO Patricia Scholtemeyer added that M-Net and e.tv had been running DVB-T trials successfully for two years. “We are satisfied with the trials and the DVB-T standard. The DTT transmission networks are ready and manufacturers are ready to proceed with producing set-top boxes,” she said at a media conference.
She noted that the network was using DVB-T because the standard was approved by Cabinet, implemented in policy and confirmed in regulation. “As a business, we believed this gave us the necessary regulatory certainty to proceed to make investments in DVB-T. This last-minute about-turn on standards could derail all the gains made to date,” she said.
e.tv CEO Marcel Golding said that the set-top box specifications had been approved by the South African Bureau of Standards (SABS) and the Independent Com-munications Authority of South Africa (Icasa) had published its DTT frequency plan. “The DoC’s standards review undermines all the stakeholders who have been working on the DTT project for the past ten years,” he asserted.
He added that the adoption of ISDB-T would prejudice the local manufacturing industry, because the market for set-top boxes produced in South Africa would forever be restricted to those few countries that had adopted ISDB-T.
The DTI notes that the local set-top box initiative could significantly increase growth in revenues and skills within the electronic manufacturing environment. It could also grow a new subsector, which currently only has one established domestic manufacturer. The subsector’s medium- to long-term goal is to export set-top boxes to African countries, which will all require these boxes by 2015.
The local set-top box manufacturing sector has the potential to produce up to 5,6-million boxes yearly when running at full capacity. This creates an opportunity to build a globally competitive export sector, which is an aim of the Industrial Policy Action Plan.
South Africa has at least nine-million households with TV sets, and some commercial entities also have TV sets, while there are more than 100-million television users in Africa. Lan notes that there is significant export potential for South Africa if the SADC countries continue to look to this country for guidance. However, the current delays decrease this export opportunity.
“The rest of the SADC countries will use DVB-T, because the region is on an 8-MHz frequency, so South Africa will cut itself off from the rest of Africa if government decides to opt for the ISDB-T standard,” he points out.
When government gazetted the new DVB-T standard, in 2008, Altech UEC invested significantly in local intellectual property. The company developed its own hardware and software to support government’s vision.
Lan says that the private sector looks at digital migration in terms of risks and costs. “ISDB-T is a bigger risk because it is deployed in fewer countries and there is no knowledge of it locally. All the intellectual property investment and skills have gone towards developing DVB-T. There is not enough time to create the same base of intellectual property for ISBT before 2015,” he notes.
He adds that the risk will increase significantly if government opts for ISDB-T, as the Japanese standard will then be deployed in an 8-MHz frequency for the very first time and certain modifications will be necessary. “The country will then run the risk of being the tester, while we are already geared to deploy the tried and tested standard,” he explains.
Meanwhile, Majaja points out that the local manufacture initiative also provides an opportunity to diversify the television industry. Employment statistics for the tele- vision industry show that employment is on the decline. The manufacturing of set-top boxes can provide a lifeline for the industry and other related sectors.
“There are numerous opportunities for the set-top box manufacturing sector and, to ensure the maximum benefit to the economy, the sector will need to be equipped to meet the challenges ahead. Therefore, the DTI encourages capital upgrading within the sector and support companies which display the same commitment,” she asserts.
Future of Digital TV
Van den Berg says that it is significant that the decision on whether to use the European or Japanese standard of digital television must not be taken in isolation. The preferences of SADC countries should be taken into account, as the decision to use the European standard was made unanimously at the ITU gathering in Geneva, in 2006.
Industry players feel it is unlikely that many of the SADC countries would be interested in changing standards at this late stage, as broadcasters will probably have to write off millions already invested in digital TV.
e.tv head of regulatory and legal affairs Lara Kantor agrees, saying that if South Africa adopts the Japanese standard, the country will be undermining the African consensus as all countries on the continent have agreed on DVB-T.
While Nyanda says that the digital television standard is merely being reviewed, local manu-facturers are restless as DVB-T is just about to launch and the set-top boxes are already SABS approved.
“Altech UEC currently manufactures locally and has significant infrastructure in place for the development of the new set-top boxes. The possibility of import, if the Japanese standard is adopted, is a concern. The company is anxious about government’s review of the standard,” Lan explains.
Bresler points out that it makes more sense from a technical point of view to follow the European standard. DVB-T software is readily available and affordable and a follow-up standard – DVB-T2 – has already been developed, enabling up to 50% more channels to be broadcast. There is no follow-up standard in the pipeline for ISBV-T yet, which decreases the development possibility.
“If you take into account price and the future of technology, the European standard would be a better choice,” he asserts.
He adds that, should the Japanese standard be decided on right now, the research, development and regulations that must be adopted for ISDB-T will not be ready before 2013. “It will have a fundamental impact on the pace of local digital migration. Just the regulations that must be adopted and rewritten will take almost a year,” he notes.
Sentech will continue rolling out infrastructure for the DVB-T standard, as news has yet to be received of the standard changing. All the groundwork for upgrading the analogue infrastructure has been done, such as improving space requirements, electricity and civil works, and will continue until 2014, as set out in the government plan.
However, Toko explains that more time is needed to achieve analogue switch-off before the November 2011 deadline, as a result of factors such the late publication of the Terrestrial Broadcasting Frequency Plan and the DTT Migration Regulations by the regulator. “Sentech could not fully roll out its infrastructure plans and order frequency-dependent infrastructure until it knew what the frequency plan stipulated,” he asserts.
Time is an important factor. Bresler explains that it will be challenging to produce, distri-bute and sell 10-million set-top boxes once the relevant research and development has been done in time for the 2015 cutoff date. “If ISDB-T is chosen as standard, a new deadline will have to be negotiated with the ITU,” he says.
However, the biggest challenge remains the consumer. “Even if we manufacture 10-million sets in time, 10-million households must be allowed enough time to buy them,” Bresler remarks.
Repeated attempts to get an update on the situation from the DoC were unsuccessful.