Africa’s bumpy road to the digital transition in broadcasting – issues that have to be faced

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The front-runners in the race to make the transition to digital broadcasting are now facing a range of issues including: who runs the signal carrier?; how those who can’t afford a decoder will pay for it; unrealistic deadlines and the absence of any public campaign to explain the process. The politicians seem scared by a process that could affect their citizen’s ability to watch television and are seeking to control the discussion about what’s going to happen. Russell Southwood looks at the early news from the front-runners.

Making the transition to digital broadcasting was never going to be easy for any African country. In effect, the Government has to ask those of its citizens who own a television to pay US$50-100 for a decoder/set-top-box and ostensibly all they will they will then get is the television they are watching. Of course, there are potential benefits and you’d think that African governments and regulators might make a better fist of explaining them. Although the agreement to go digital was signed at an ITU meeting in 2006, most countries seem to be determined to avoid doing anything until the last minute.

The following issues have begun to emerge in some countries and worth knowing about so that others can avoid them:

Who runs the digital signal carrier?: In Kenya, the Government was originally determined to have all the broadcasters use a single signal carrier. Its original choice was Signet, a subsidiary of KBC: it was to have raised investment from external parties to handle the transmission signal roll-out. KBC had already set up a test signal with one of these external parties. The private sector broadcasters preferred not to be in the hands of the Government broadcaster and would have liked to set up their own signal carrier.

However, the Government eventually lost patience with the slow pace of Signet’s progress and decided to let two licences for signal carriage. The Media Owners Association (MOA) had been wanting to bid as a consortium and Chinese-owned Star Times were the other bidder.

But relatively late in the run-up to bidding, the Nation Group and Royal Media (which has the most extensive private analogue transmission network) decided to bid and the MOA said it would stand aside. Only one of the two licences was awarded to Star Times. The Nation Group and Royal Media are now suing in the courts and if the case is not thrown out, it could take several years to reach a decision.

In Ghana, the Government has decided to go the path of a single signal carrier for Free-To-Air (FTA) television which because it does not have the money to fund the transition will involve an external investor. So the parties to the signal carrier will be the Government, the state broadcaster GBC, a consortium of all the FTA broadcasters (through the Ghana Independent Broadcasters’ Association) and the external investor who will operate the company on a “Build, Operate and Transfer” basis. The Government is simply saying to the bidders: come up with your best offer in terms of coverage area, rate of return and time period. There is to be a second signal carrier for Pay-TV operators.

Because the Government was slow to address the digital transition, Swedish-owned NGB had set up a joint venture with the state broadcaster GBC to run a digital signal company (prior to any policy decision) which it hoped all broadcasters would use. The regulator took the right decision in saying that there was no policy so this arrangement had to be ended. Since NGB had already done the survey work for the transmission network, the Government is now having to insist the winning bidder will do this all over again so as not to appear to favour NGB.

Both NGB and Start Times have a clear strategy of trying to get in with the state broadcaster ahead of the policy decisions. In NGB’s case, it has not been remarkably successful bit Star Times has seemed to make some big wins as we will see later.

What will have to be resolved in Ghana with the winning bidder is what assets from each broadcaster (masts, transmission equipment) are worth to the external bidder and therefore what financial contribution each broadcaster is making. What is not clear is what will happen to those broadcasters who have relatively few assets to put into the pot or whose assets will not be redeployed.

In Senegal, the Government has made the decision to set up a single signal carrier separate from the national broadcast company. The licensing process for this entity has not yet been announced but there is some talk that it might be one of the telcos, either Expresso or Sonatel. Again the existing assets of the broadcasters will be poured into it with all the ensuing arguments about the value of these assets.

In Nigeria, the Presidential Committee set up to create the policy for the transition delivered its work to a demanding timetable and sent it off to the President. It has been with the President now for two years: the death of one President and elections have delayed it but insiders say that the President will sign off on the document “within the month”. We shall see….Government does not wear the same watch as the rest of us.

In the meantime, Star Times has set up a joint venture with the state-owned broadcaster NTA and is selling Set-Top-Boxes for its single, low-cost bouquet. So far it has sold 400,000 Set-Top-Boxes and says it is selling 30,000 a month. However, this is small potatoes alongside the many million TV households in the country. It is also steadily adding transmission coverage areas with Port Harcourt being the latest added. It will be interesting to see whether the Government blesses this arrangement or (as it should do) rolls it back as was done in Ghana for a proper, transparent bidding process.

What about those who can’t afford a Set-Top-Box?: Those who have written their digital transition policies and are beginning to implement them are rightly proud of their work but there is an empty hole where they should have addressed how they will get Set-Top-Boxes (STB) on low-income. Only South Africa really has a clearly stated policy with resources committed. The digital transition committees know the issue exists but have not really dealt with it.

In most places the STB will cost US$50 and the policy-makers acknowledge that a South African scheme with subsidy direct to the user is likely to be abused: indeed, they say, what happens if we lower it to US$20 and people start exporting illegally to neighbouring countries? One of the Tanzanian signal carriers will rent the user a box for just under US$6 a month. The state broadcaster in Namibia, NBC, will give licence-payers a box for just over US$24.

But in the main, there is much vague talk about prices coming down as volume sales kick in and remove taxes but the rest is silence: there is no coherent, written policy. The truth is that between 20-40% of the TV-owning population in each country will find it hard to buy the STB. Some may have relatives who will pay for it but the rest will be left without a signal once the switch-off happens. The ideal price point is probably somewhere around US$20.

Unrealistic deadlines: Countries seem to be setting deadlines to “ginger things up” (as they say in Nigeria rather than these deadlines representing a realistic hope of completion. National pride seems to dictate a bidding war between the front-runners to set ever more stringent deadlines. For example, the Nigerian Government has a deadline of 2012, which it has not got a hope in hell of meeting. Elsewhere in the world the process has taken 3-14 years to complete.

In Ghana the deadline for switch-off is 2014 but informed sources admitted that this deadline is likely to be the point at which a switch occurs in one area alone. Playing propaganda with these deadlines will undermine the credibility of the process in the long-run. Deadlines in the original timetable have already been missed and the kick-off the prepared public campaign now waits the resolution of the signal carrier bidding.

At an APC workshop on the digital transition in Ghana last week, the new Deputy Minister at the Ministry of Communications made the mistake of comparing the process to the registration of SIM cards, where the deadline has already been postponed several times. The difference is there is no cost to the user and other than a bureaucratic few minutes registration time, no other pain involved.

No-one seems to have understood that with a process this complicated, it is important to have answers to the issues outlined above and that the transition will become a political “hot potato” unless there are clear answers, particularly on what will happen for those who cannot afford to pay.

For more information and case studies of Ghana, Nigeria and Senegal, go to:

 


 


This on Balancing Act’s Web TV Channel:

Shuaib Nda Adama, Executive Director, Engineering, NTA on the digital broadcast transition in Nigeria.

Remy Nweke, blogger, ICT Realms Online on the three big issues facing Nigeria, one which is the digital transition.

Seyram Mankra, Media Insights Manager, Synovate, the main market research company for media, on the changes in the media landscape in Ghana and respective merits of radio and television for advertisers.

In a new series, Seyram Mankra, Media Insights Manager, Synovate looks at What Ghanaians Watch on TV, drawing contrasts between male and female viewing. He also talks about his own viewing patterns as someone who is a professional in the industry.

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