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Hi-tech sector in limbo over digital migration

28 April 2010 News

Delays in migrating television broadcasts from old-fashioned analog to digital signal transmission is

hampering the growth of local technology companies and stifling opportunities for job creation.

Digital migration has been delayed repeatedly, and the earliest that South Africa will now enjoy full digital terrestrial broadcasts is mid-2013 – already 18 months later than initially expected.

The delay is frustrating several local companies that are poised to produce the set-top boxes that viewers will need to receive and convert the new signals so they can still watch TV on their existing TV set. An estimated 8 million devices are required, and the government plans to subsidise at least 4 million of those for low-income households. That creates an enormous opportunity for set-top box designers, manufacturers, retailers, installers and technical support staff. But the whole sector is in limbo as the government has yet to finalise some key technical specifications.

The procrastination has forced Tellumat and several other local players to put their production plans on hold. “We have spent money developing the intellectual property and investing in research and development in anticipation of business coming our way,” says Tellumat’s financial director Graham Meyer. “We are positioning ourselves to be one of the contractors for the subsidised devices because we have the technical know-how as well as the manufacturing capability. But without knowing exactly what the final specifications and final time lines will be, it is difficult to begin.”

The government has pledged to support devices that are designed and manufactured locally when it awards its tenders. That is a commitment that Tellumat applauds. “If all the devices are manufactured locally it will lead to enormous job creation, with more jobs created for the supply chain, installation and support,” says Meyer. “It is a massive sector that is waiting to happen, but finalising the roll-out has been a bit of a shambles.”

Tellumat could begin producing set-top boxes for the commercial market instead of waiting for the government to issue tenders for the subsidised devices. But the delay in finalising the specifications has prevented manufacturers from manufacturing to a certified baseline. Meyer believes the market will boom across Africa once South Africa finally acts, as other countries may well follow the local specifications. “We see exciting potential on the continent and our production could start very quickly. But nothing can happen until the specifications are released,” he says.

For more information contact Riefqa Sterris, Tellumat, +27 (0)21 710 2911, rsterris@tellumat.com, www.tellumat.com





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