South Africa: Government issues RFP for digital TV

Investment

The request for proposals gives interested bidders just one month to respond. It also makes no specific mention of a return path for Internet access.

Prospective manufacturers of the set-top boxes that government will subsidise for as many as 5m poorer SA households to receive digital terrestrial television signals have just a month to submit their proposals to the department of communications. 

Government published the long-awaited request for proposals (RFP) for the set-top boxes on Friday, giving local manufacturers until 31 August at 11am to submit their bids. Intriguingly, the document does not require inclusion of a “return path” for Internet access, which some industry players, led by the SA Communications Forum, had been lobbying hard for. Communications minister Dina Pule had suggested at the recent ICT Indaba in Cape Town that the RFP would include a return path. 

However, Muzi Makhaye, CEO of ABT, one of the companies that intends submitting a bid, believes bidders will include a return path, perhaps in the form of USB and Ethernet ports, to make their submissions look stronger technically. “You can’t design a set-top box without high definition, or an Ethernet or USB port,” he says. “Without those specifications, your set-top box will stay on the shelves.” 

Government wants to subsidise the cost of the set-top boxes into as many as 5m of SA’s 11,5m television households. The set-top boxes will be needed by consumers to unscramble digital terrestrial broadcasts after the country switches off its analogue signals. This must happen by mid-2015 if government is going to meet a deadline set by the International Telecommunication Union. Telecommunications operators want it to happen sooner so they can get access to valuable radio frequency spectrum that will be freed up through migration from analogue to digital. 

The department of communications says that by subsidising set-top boxes for poorer households, it should “offer opportunities for local [set-top box] companies to export to the rest of the African continent”.  It says it expects that new and emerging manufacturers will enter the market and create an opportunity for the “growth and transformation of the industry through increasing participation by historically disadvantaged persons”. 

Government says it hopes the RFP will also assist it in understanding how many potential manufacturers and emerging set-top box and electronics manufacturers there are in the country. 

The department of communications will place orders with a number of successful bidders to manufacture specific quantities of boxes per company within stipulated timeframes. The boxes, which must be delivered to designated SA Post Office warehouses, must conform to the final SA Bureau of Standards specification, known as Sans862. 

The department will establish a bid evaluation committee, which will evaluate all bids received by the deadline. Evaluation will be based on a points system. Bids that score the highest points for technical fitness and functionality will be subjected to further evaluation under a “90/10” scoring system, where 90 points will be allocated for price and a maximum of 10 points will be awarded for broad-based black economic empowerment (BBBEE). Any service provider that scores less than 80 out of 100 points for technical fitness and functionality will not be considered further. 

Prospective suppliers must be accredited for BBBEE. Service providers that wish to enter into a joint venture or subcontract a portion of the contract to other BBBEE entities must state in their submissions the percentage of the total contract value that will be allocated to such entities. 

A supplier will not be awarded points for BBBEE if it intends subcontracting more than 25% of the value of the contract to an entity that does not qualify for at least the same points that the service provider qualifies for, unless the intended subcontractor is an exempted micro enterprise with the capability to deliver. 

A short list of service providers will be submitted to an adjudication committee for final approval.  Minister Pule has said previously that she wants SA to switch on commercial digital broadcasts by September 2012, marking the start of a “dual-illumination” period where both analogue and digital broadcasts will coexist as consumers are encouraged to buy set-top boxes ahead of analogue switch-off.