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Are you ready for the Big Switch?

16 May 2007 News

Earlier this year, the South African Cabinet approved a plan to migrate to digital TV by 1 November 2011.

This means that television transmissions, which until now have been analog, will become exclusively digital.

An important device that will play a key role in providing the digital viewing experience is the settop box that will allow analog TV sets to receive and decode digital broadcasts (the M-Net and DSTV decoders that have been common in South African homes for years are examples). With continuing advances in technology, settop boxes are also being designed to serve as an interface to the Internet and provide enhanced capabilities such as interactive gaming.

Since home entertainment devices are also shifting from analog to digital transmission, providing numerous channels and constant coverage, settop boxes are likely to become a necessity in more homes in the near future. Due to technological changes, settop boxes are already entering the international market with advanced features such as video on demand (VOD) and personal video recorders (PVRs).

The latest trend in the settop box space is the use of settop box technology in applications such as wireless communications, video gaming, and aircraft platforms. These applications typically use the computing, storage, and processing power of the units.

Generally, settop boxes fall into four categories depending on the platform in which they are used.

Satellite settop boxes are already used in South Africa, where ever-increasing subscriber numbers sustain the market. A recent study from Frost & Sullivan forecasts that the global satellite settop box market is likely to be driven by the increase in the number of boxes per household in North America, new service launches across India, the replacement of boxes due to conditional access changes across Europe, and the emerging demand for free to air (FTA) satellite receivers.

The second type of settop boxes is terrestrial. This market is likely to grow as the termination of analog signal transmission takes place worldwide. High definition television (HDTV) penetration in the market is likely to boost the growth of terrestrial settop boxes. The major contribution internationally is expected to come from the European region and the North American markets.

Cable settop boxes are used primarily in North America, where customers are now expecting service providers to supply PVR and HDTV enabled boxes. Digital subscriber line settop boxes will grow in demand as telecommunication providers deploy TV services internationally.

Overall, the settop box market is experiencing an increasing growth rate worldwide. Frost & Sullivan's study forecasts that the unit shipment for settop boxes is likely to increase by millions of units annually. As the United States is expected to terminate analog transmission from 2009, the market for digital settop boxes still proves to be profitable. Additionally, the cable settop box market is expected to grow significantly in the United States and is experiencing increasing growth in Europe.

For more information contact Patrick Cairns, Frost & Sullivan, +27 (0)21 680 3274, patrick.cairns@frost.com





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