Brave new world of digital TV

The broadcasting sector is set for sweeping changes as a result of the analog-to-digital switch-over.

Not only will consumers be forking out anywhere between R210 and R3 000 to access digital television, but additional channels are in the offing and the freed-up radio spectrum could result in more competition in the market come November 2011.

When digital airs on the scheduled date of November 1 2008, consumers who fork out R700 for the set-top box converter will be able to access additional channels for free.

The Mail & Guardian understands that consumers will be able to access the current three SABC channels and as well as a mooted additional free channel provided by

M-Net, which will also be available to subscribers through the new set-top box converter, could be providing an additional two free channels to its customers.

The SABC is also planning additional channels but it is unclear how many would be available on the new set-top box converter.

These new channels were included in an early Department of Communications implementation plan dated March 2007, but have been removed from the new policy document released last week.

The M&G understands that this was because the department could not be seen to be telling the regulator which stations to license but that plans, according to industry sources, for these new channels are still on track.

The department has allocated two radio spectrum frequencies for digital broadcast from November; each of these frequencies has the potential to carry up to nine channels.

One band has been allocated to public broadcasting and the other to commercial channels — the latter will carry the and M-Net channels.

These additional channels are part of the plan to incentivise consumers to make the switch to digital as soon as possible because the department needs to have all 7,5-million television households switched over to digital by November 1 2011.

When the period of dual illumination is completed in 2011 and the analog broadcast is switched off, the spectrum that will be freed up could allow for numerous new broadcasters to enter the market through the new set-top box.

The new policy document makes vague reference to these opportunities when it says that “the phased migration to the new digital services offers existing market participants the scope to plan their own commercial strategies to take advantage of the new digital opportunities”.

There is a reluctance to allow new competitors in from the beginning of digital broadcast in 2008 because they would have an unfair advantage over existing broadcasters, who would be paying for both analog and digital broadcasting while the new entrants would be paying only for the digital broadcast.

The M&G understands that once the analog broadcast is switched off, enough spectrum space could be freed up for an additional 45 channels, but it is unclear what government is planning to do with this spectrum.
While broadcasters would argue for diversification of the sector by allowing new competitors into the market, the spectrum could also be allocated to telecoms and IT companies.

These companies could use the freed-up spectrum to offer lucrative mobile telephony and wireless broadband services, while government could also have an eye on part of the spectrum for the delivery of government information and services.

Most international countries that have completed the analog-to-digital switchover auction off the excess spectrum. The United States’s recent spectrum auction raised a whopping $19,6-billion. However, it is unclear what South Africa’s communication’s department has in mind.

The options: from R210 to R3 000
It could cost consumers anywhere between R210 and R3 000 to join the digital TV revolution in South Africa.

Consumers have two options when it comes to switching to digital TV: a set-top box that will convert the digital signal into an analog one, so an old analog set could be used; or the viewer could purchase a new digital television, which could set you back a few thousand rand.

An entry-level set-top box converter will retail for R700, according to department of communications estimates.

An entry-level digital television, the 48cm Hisense, retails at Hi-Fi Corporation for R3 000 — more than four times the price of the entry-level analog television, a 37cm Wharfedale at R750.

The department estimates that of the 7,5-million South African households with television sets, 4,5-million will not be able to afford the R700 for the entry-level set-top box.

It is proposing a 70% subsidy programme for the poorest five million households, which would see them forking out R210 for their set-top boxes.

This proposed subsidy will cost the government R2,45-billion.

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