Digital delight doesn't come cheaply

Digital television is set to add to the thrills of the 2010 World Cup in South Africa, but will poor households be able to afford the R700 required to make the switch from analogue?

By November 2011, all South African households must be switched to digital television, according to the government’s digital broadcasting migration policy, which was accepted by the Cabinet last week.

The policy determines the framework for changing broadcasting from the existing analogue signal to a digital one. To enable South Africans to make the switch, the government will provide so-called set-top boxes.

However, these boxes will cost R700 each—much more expensive than the current standard TV decoders of about R300, used by MultiChoice subscribers.

There are about eight million households with television sets in South Africa, says the South African Broadcasting Corporation, and it has 7,1-million TV licence accounts on its database—some fully paid up, others only partially paid.

If eight million households paid the one-off R700 decoder fee in full, it would earn the government R5,6-billion.

According to Joe Makhafola, a spokesperson for the Department of Communications, “the costs [of digital television] outweigh the benefits by far”. He says the boxes will provide specialised new television services and programmes dedicated to education, health, the youth and small and medium enterprises.

Because analogue broadcasting takes up so much room in the frequency spectrum, converting to digital broadcasting will create space for more channels.

The government will therefore offer services such as provincial content and parliamentary and government information, and provide television content in more South African languages.

Lara Kantor, chairperson of Digital Dzonga (“digital south”), the body appointed by the government to advise on the implementation of digital television, says: “If you go in with a simple box, you will lose the opportunity to offer additional services.”

She emphasises that the government only asks R700 one-off, and that there will be no recurring subscription costs such as MultiChoice’s. Also, over time the decoders will become cheaper, she says. “In other markets we experienced that prices will fall down by 20% to 30% every year.”

‘Heavily overpriced’
However, according to Arthur Goldstuck, media analyst and commentator on information and communications technology (ICT), the government’s set-top boxes are “heavily overpriced”.

He says: “I asked the government why their decoders are so much more expensive. They told me it was because of the ‘cream on top’.”

Goldstuck says that this “cream on top” mainly refers to the government decoders’ ability to receive an individual signal, enabling the government to pipe specific information to specific households. The new decoders also offer the ability for viewers to give feedback and send information.

The set-top boxes will also be more expensive because of strict security features. Says Goldstuck: “You cannot use your box outside South Africa. They don’t want people to buy it cheaply here and go abroad.”

He understands that the boxes therefore would be more expensive, but adds: “A hundred rand extra would be acceptable, but more than double the price [of current standard decoders] doesn’t make sense.”

Professor Guy Berger, head of the school of journalism and media studies at Rhodes University, Grahamstown, is more optimistic. He thinks R700 is “not that bad” for a middle-class household, but admits working-class and poor people will find it more difficult to come up with the money.

Still, he says, in the end “a wide range of boxes will be developed, with different prices and different possibilities”.

According to Berger, several factors can make a decoder more expensive.

Firstly, the cost of a set-top box depends on how much technology it contains. He thinks the government’s set-top boxes might contain software and hardware to provide conditional access—meaning that consumers will only be able to receive certain information by entering a code. “It’s possible that you only get this code if you buy a TV licence.”

However, according to Department of Communication spokesperson Joe Makhafola, viewers won’t need a TV licence to obtain a government decoder.

What makes today’s standard decoders cheaper, says Berger, is that they are imported by companies like MultiChoice. Because the government wants to give local industries the opportunity to manufacture its new decoders, these boxes will be more expensive.

Thirdly, Berger says it’s also possible that subscribers get their decoders cheaper at companies like MultiChoice because such companies earn their money from the monthly subscription fees. “Like mobile phone companies—they offer cheap phones because they make their money out of the calling costs.”

According to Berger, the extra services the government promises—such as specialised television services dedicated to education, health and the youth—do not matter in terms of the cost. “But, they make it more intense to people to buy one [a decoder] and you will pay a price for it.”

Subsidy
The government has allocated R2,45-billion during the three years of dual illumination—the conversion from analogue to digital, during which both signals will be available—to assist the estimated 4,5-million poorest TV-owning households with a subsidy of up to 70%.

It’s not yet clear how it will determine which households qualify for these subsidies, only that an “anti-poverty strategy” will be introduced by the deputy president.

According to Goldstuck, this will be a time-consuming process. “We are talking about an unknown population, the poorest of the poor,” he says.

In his blog on the Mail & Guardian Online‘s Thought Leader, he writes: “We are expecting a mass roll-out that requires both information and product distribution in an environment where most of the beneficiaries are rural or deep rural households.”

Goldstuck therefore doesn’t believe that the government will make its November 2011 deadline. “There is no chance that they will make the deadline. It will take one year to develop a good decoder, and then there is only two years left to roll out six million decoders to the public.”.

He fears that come 2011, millions of viewers will still be waiting for their decoders—and the government will be forced to extend the deadline. He thinks the government needs to acknowledge this from the start, “otherwise people will start to panic”.

Berger is more upbeat and doesn’t think the deadline of November 2011 will come too early. “Whenever you extend it, people will always wait till the last moment.”

He thinks that by August 2011, between 50% and 60% of South Africans will enjoy digital television, and that there will be a rush to obtain decoders after the deadline.

He says: “South Africans do like technologies; they use mobile phones a lot ... And in 2010 they want to see football on their digital TV.”

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