If 2016 could be called the year of the set-top box (with varying degrees of irony depending on where one stands on the matter) then 2017 may go down as the year of the smartphone, as far as the local electronics manufacturing sector is concerned.
STBs: To be, or not to be?
South Africa’s botched migration to digital terrestrial television (DTT) and the manufacture of millions of subsidised set-top boxes (STBs) by local companies, is a touchy subject that needs no introduction. The various enquiries into corruption, debates over technical specifications and other sticking points have been the subject of coverage in Dataweek for the past several years. In last year’s edition of this very handbook, we reported that manufacture of these subsidised units had moved into full swing, and it seemed that it was all systems go for the three manufacturers selected to produce the initial allocation.
Fast forward one year, and it feels like Groundhog Day all over again. A report was made available to minister of communications, Faith Muthambi, in March, detailing the National Treasury’s enquiry into irregularities in the procurement process, but which has yet to see the light of day. The DA’s shadow minister of telecommunications, Marian Shinn, who has been the most outspoken and dogged critic of the DTT process, has once again voiced her dismay at Muthambi and her department’s conduct.
In a recent statement Shinn emphasised that the information revealed by Muthambi about the probe painted a picture of a process “riddled with irregularities and exorbitant, escalating costs.” She went on to say that “these include serious breaches of supply chain management policies, National Treasury regulations and the Public Finance Management Act; contracts going to the highest bidder; alarming cost escalations; tender specifications being adapted after publication; and prices for STB production being adjusted upwards.
“That means that the subsidised STB installation is almost three times the retail cost and is a shocking cost escalation. Yet, Minister Muthambi has given no indication that she is taking action on the findings of the National Treasury report and whether any official(s) are being held accountable, whether any of the orders lodged with the three companies are being reviewed or cancelled, or whether any action is being taken against any of the contracted service providers to the tender process are being brought to book. I call on her to publicly state what action she has taken on this report and to immediately release it in its entirety,” Shinn’s statement continued.
Added to this, rumours started circulating almost as soon as the first batch of STBs was delivered that manufacturing had promptly come to a standstill as a result of no more orders being placed by the government and, even more worryingly, failure to pay for the units it had ordered and which had already been produced, leaving the manufacturers to foot the bill.
As a potential consumer of DTT content and a keen observer of the goings-on behind the scenes, I can honestly say at this point I still can’t be absolutely sure where the migration process is at, or when it might come to a conclusion. When I read the opinion of one commentator a couple of years ago that we ought to just ditch the whole thing, I couldn’t resist an indulgent chuckle. Now I can’t help thinking maybe he was right.
SA-made phones: a smart idea?
The South African technology community has been abuzz ever since it was announced in December that a startup company called Onyx Connect is commissioning a plant in Johannesburg to manufacture smartphones based on the world’s most popular operating system, Google’s Android.
This wouldn’t be the first South African smartphone brand – others have tried to enter this market, and some have failed – but previous efforts could boast no more than being designed, and at the most assembled, locally. If Onyx’ plans come to fruition, it will be the first to locally manufacture not only smartphones, but also tablets and possibly other devices. It has already inked a licensing deal with Google and secured healthy funding, and plans to begin production during the first quarter of 2017.
That’s at least one reason, then, to be optimistic about a strong year for manufacturing, and I truly believe there will be more good news for the local electronics sector as the year goes on.
Brett van den Bosch
Editor
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