Africa’s digital switchover – nothing much happening except a handful of pioneers

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Africa’s television broadcasters are supposed to be making the switchover to digital broadcasting by 2015. Eight years to go sounds like a long time but even some developed nations are taking 10 years to make the switch. South Africa has set itself an eye-wateringly short timetable of three years and started the process this month. It is among a handful of African pioneers who have even begun to think about the issue. The vast majority of African countries have not even started writing plans for how they will tackle the issue, let alone scheduled a deliverable timetable. Unsurprisingly, the private sector has already started the process in two countries. The transition offers significant advantages if it is got right but the costs will be considerable, both for the Government and its state broadcast organization and for consumers who will need to buy new set-top boxes or televisions. The digital transition is also probably the precursor to a wider shift to High-Definition TV. The transition raises key competition issues in terms of how the digital set-top boxes are commissioned. Russell Southwood looks at what’s happening and who has actually done any work on the issue.

With the World Cup due to arrive in 2010, the South African Government is clearly seeking to use the event as a springboard to update its broadcasting services. According to Lara Kantor, SABC’s General Manager, Policy and Regulatory Affairs who spoke at the Media and Broadcasting Congress in Johannesburg at the beginning of this month, the advantages offered by the transition were:

- There will be more TV channels (using less spectrum) and interactive services can be put in place. This has to be advantageous in those countries where there are two or more large language groups.

- Control of the signal through a Set Top Box means that all broadcasters can control their licence or subscription income more easily. If a person does not pay, the signal can, in theory, be switched off. (Tell that to the 300,000 or so pirate viewers in Nigeria.)

- Government gets a spectrum dividend because Digitial Terrestrial Television (DTT for acronym collectors) is more efficient in its use of the spectrum. Once the transition is completed, there will be spectrum that has been freed up that can be sold for other uses.

However, the factors weighing against a successful transition are considerable in the African context. This doesn’t mean the transition should not be done: it would be hard to avoid it if the rest of the world completes the transition. But African countries will need to complete a process that is causing some challenges even in developed countries. The factors against are:

- It requires equipment upgrade of broadcast distribution infrastructure, transmitters, compression technology and set-top boxes. It requires broadcasters to digitalise their production processes (including studios) and key parts of their archive. The more sophisticated may want to consider provisioning for a converged world where things mobile TV and the Internet play a part. The regular tussles between Government and the State-owned broadcaster just to keep them at a level of minimal operation indicates that this scale of upgrade is simply outside of the thinking of many policy-makers outside of Africa’s pioneer countries.

- Mobile phones were easy-peasy alongside the complexity of both installing and operating most set-top boxes. How will African broadcasters put in place the delivery mechanisms to ensure that its viewers don’t simply give up?

- Television viewing in Africa is still largely an urban phenomenon and usage levels are usually much lower than for radio. A multi-channel environment will fragment the viewing landscape. The challenge for broadcasters will then be to produce programmes that deliver enough of a “critical mass” of an audience to attract advertisers. Although inertia in viewing habits favours the current Free-To-Air broadcasters, a combination of Pay-TV competition and multi-channels from all broadcasters may take as much as 25% of the mainstream TV audiences away from mass audience programming. Crucially, it will be the younger viewers who will probably desert first. It goes without saying that a multi-channel environment requires resourcing. This can only come from three sources: increased Government subsidy; the viewer (either through licence fees or Pay-TV subscription); or advertising. Discuss.

- Analog signals degrade at the edge of coverage but you still get some form of picture, even if it’s like watching through a snow-storm. However, with DTT, poor signal at the edge of coverage areas will mean no picture rather than the current limited picture.

The biggest issue is what form of Set Top Box will be on offer and how much it will cost. South Africa has approximately 7.5 million households with TVs. Over three years, each and every one of them will need to either buy a new digital television or a Set Top Box. In theory, this means that 2.5 million set top-boxes will be sold each year over the three year transition. However, since the process is already behind, the number needing to be sold escalates. And not only do these set-top boxes have to be sold, they have to be manufactured first.

The key issue in the transition is the cost of the Set Top Boxes to users. Wealthier users may be able to afford the new generation of digital televisions but these remain high cost even in developed country markets. Kantor told the Media and Broadcasting Congress that it was estimated that the set-top box would cost R500 (US$73.82). Although relatively cheap as they will be ordered in some considerable quantities, this is still a large amount of money for those on low-incomes. Therefore as in developed countries, the South African Government is talking of subsidizing those on low-incomes to make the transition. However, a subsidy scheme on this scale is an absolute invitation to corruption in a number of African countries.

With decisions needing to be taken by both State and private broadcasters and for them to agree on key issues, things will not be easy. There is an issue as to whether the Set Top Box should have “conditional access” (the ability to control whether a signal is delivered) or be conditional access ready. Pay-TV operators who have already rolled out their own proprietary Set Top Boxes are not keen to see these replaced with one that can receive anyone else’s signals. Proprietary Set Top Boxes offer a good level of “lock-in” when competing on content fails.

But in competition terms, this ability to switch providers without requiring to pay for new equipment is crucial. Imagine the outcry if you had to pay US$75 every time you changed Internet service providers because you needed a new proprietary modem. And this is only one of several knotty issues with competition implications. Where you are in the Electronic Programme Guide will probably dictate “default viewing”: the nearer the top, the easier you are to access. There are also similar issues that will need to be resolved with middleware and multiplexes.

Outside of South Africa, those preparing for the digital transition are few in number. From our research, these would seem to include: Kenya, Mauritius, Namibia, Tanzania and Uganda. The francophone members of UMOA have a sub-committee that have identified the issue as important but it appears to have little impact on national policy. From the private sector, Multichoice went DTT in Namibia in 2005 and another Pay-TV operator launched a service in Mauritius in 2006.

In Kenya a Task Force was set up in March 2007 to look at the implications of the transition and its report was published in July 2007. It said that the existing broadcasters could set up their own independent signal company and that the transition should take place through one of two options: either a policy-driven approach or a switch-over taking place over three years. No policy option has yet been chosen and the deadline for the start of the process has not been set.

Tanzania issued its “Consultation Document on switchover from analogue to digital broadcasting in Tanzania” in August 2005. This promised that the regulator would start the planning process in mid-2006. The consultation document envisaged the switchover starting in 2006 and concluding in 2013. A second consultation document was issued a year later which recommended the setting up of three multiplex operators; two commercial and one public. It also recommended what it described as a “managed market take-up”, starting with the gradual roll-out of digital infrastructure in 2007/2008. We await with interest to see whether the start of the process will meet this deadline.

In Rwanda, the Government has said that it will stop issuing licences to investors intending to broadcast using analog. Director General Rwanda Utilities Regulatory Agency (Rura) Diogene Mudenge said the country is in transition to digital terrestrial broadcasting. "By 2015 we have to be digital".

Beyond this handful of pioneers, there is only silence. Occasionally a national broadcaster or policy-maker gets up and makes a speech saying how important the issue is but there appears to be no substantive public discussion of how Africa will get “from here to there”. If this continues, this will be Africa’s loss as the whole process might help regenerate public broadcasting and offer the chance to get television out to a wide group of viewers.