Digital Migration: progress report by Department of Communications & Sentech

NCOP Public Enterprises and Communication

14 August 2012
Chairperson: Ms M Themba (Mpumalanga, ANC)
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Meeting Summary

For the rollout of Digital Terrestrial Television (DTT) and the migration of the country from analogue to digital broadcasting, SA subscribed to two protocols. According to the SADC Roadmap for Digital Broadcasting Migration, the Southern African Development Community aimed for the migration of its members from analogue to digital broadcasting on 31 December 2013. According to the International Telecommunications Union, an agency of the UN spearheading communications technology development in the developing world, the analogue signal should be switched off in June 2015.

South Africa was not ready to comply with the SADC deadline of 31 December 2013, but would be ready to comply with the International Telecommunications Union (ITU) deadline of June 2015. Processes were underway to upgrade the transmitters and other relevant infrastructure throughout the nine provinces according to a Master Broadcasting Plan which tracked the progress of the different projects.

Initially there were plans to import the Set-Top-Boxes (STBs) from China, but Cabinet had since decided that the know-how and infrastructure existed within the country to manufacture them locally, thereby creating jobs and keeping the money inside the country. The migration would create jobs in manufacturing, installation and maintenance, in call centres which would support the STBs and in content production for the proliferation of new channels which would exist as a result of using digital technology. The number of direct and indirect jobs created could be as many as 23 500. The DoC had a training plan which was in the process of being implemented.

The DoC needed an additional R7 billion over and above the three-year Medium Term Expenditure Budget to meet all its commitments in terms of the migration and analogue switch-off in September 2015.

The launch of the Digital Migration was planned for the 26 and 27 September 2012 in the Northern Cape. The Square Kilometre Array (SKA) area was chosen to demonstrate that the frequencies used did not interfere with the SKA Project and to show people in the deep rural areas currently without access to TV that they could now have access. The services would be rolled out incrementally to provinces over the next three years. Between the SABC and ETV there would be 18 television channels. Radio reception would be universal throughout the country. Even remote areas where there were currently no radio or television signals would be covered, due to new technologies like Low Power. This would be accomplished by the analogue switch-off date of June 2015.

The Chairperson pleaded with DoC and Sentech to communicate and collaborate more with each other as well as with all the television broadcasters. Members asked what Low Power was; whether the components within the STB would also be locally manufactured; how many sustainable jobs would be created; who were the people selected for training to be installers; from which towns were the trainees and what the criteria was for them to qualify to become installers; why the Japanese standard had been rejected in favour of the DBVT2 standard and why the Sentech roll-out of infrastructure upgrades to the rural areas was so far behind. It was established that the Set Top Box was currently priced at about R400.


Meeting report

After introductions, the Chairperson said she said she was unhappy as the Director General was not present in the meeting. If the Minister could not be in the meeting due to the Cabinet sitting on a Wednesday, the DG had to be there. The DG had attended one meeting after being appointed and had never attended a Select Committee meeting again. She demanded a written apology from the DG and wanted the Department of Communication (DoC) to take the Select Committee seriously.

Mr Themba Phiri, Deputy Director General:
ICT Policy Development, DoC, apologised for the DoC not having sent a formal apology for the DG. He thought the Office of the DG would have done the necessary. He had been delegated by the DG to attend the meeting and speak on behalf of the DoC.

Ms L Mabija (ANC, Limpopo) said if neither the Minister nor the DG were present in a meeting in future, the Committee would be forced to cancel the meeting.

The Chairperson said the Committee would listen to the SENTEVCH and DoC presentations on migration to Digital TV. The Select Committee had looked again at the Strategic Plan and would listen to what was happening in the provinces and would visit the projects which it would be informed about in this presentation and by 2014 she hoped the Committee would have done justice in serving the people of South Africa.

Sentech presentation
Mr Thabo Mongake, the Chairperson of the Sentech Board, said he was aware that before he became the chairperson of the board, the board had appeared before the Select Committee and was advised to form synergies with the Committee where there were challenges in terms of accessing municipalities. He found that there were some synergies when it came to the roll-out of the Low Power Project. He was committed to nurturing the relationship between Sentech and the Select Committee. He was aware that the Committee was planning an oversight visit to the Northern Cape. The Sentech board would look at ways to assist the Committee on these oversight visits and would keep itself informed about the programme of the Committee. He handed over to the CEO to deliver the presentation.

Dr Setumo Mohapi, CEO: Sentech, said he was aware that the last time Sentech had presented to the Select Committee on the roll-out of DTT, the presentation had been skewed towards the urban areas, while ignoring the rural areas.

In its Corporate Plan for the MTEF period 2012-2015, Sentech noted that the Minister had cautioned that the country’s commitment to complete analogue switch-off by 2013 might not be met.

The Minister had made a commitment that there would be a launch of the migration
process during the third quarter of the year ahead with its completion in June 2015. The key requirements for the launch were:
• passage of the amended
Broadcasting Digital Migration (BDM) policy by the Minister,
• passage of strategies dealing with Set-Top-Box ownership support and STB manufacturing by Cabinet,
• passage of the amended DTT migration regulations by ICASA,
• network coverage in all provinces by Sentech,
• content readiness by DTT broadcasters (SABC, eTV, MNet, community broadcasters) and
• availability of STBs in the market.

In the light of the above challenges, the DoC together with its State Owned Enterprise (SOE) decided that a staggered provincial DTT roll-out would be implemented.

Sentech had since reviewed its roll-out programme. It believed that its adopted strategy would ensure that the country had a common implementation plan for DTT.

Digital Terrestrial TV (DTT) Current Status
The current coverage was based on plans that were made in 2006: 60% of the population had DVB-T2 coverage with Gauteng being covered the best at 21.44% out of its 22%. The urban-rural balance was 12% rural and 49% urban.

Sentech had a national plan broken up into provinces and broken up further into towns and areas, which tracked the work that needed to be done in each location, the projected duration and the progress of the work in that location.

The presentation contained maps showing the progressive roll-out for the year 2012/13 and 2013/14.

The target for this financial year was to complete roll-out of DTT to reach 80% population coverage. The roll-out would include eight planned stations for Limpopo, 11 for the Free State, 10 for Mpumalanga, 21 for KZN, six for the Western Cape, two for the North West, and 10 for the Eastern Cape. (see presentation for exact locations)

STB Control
The amended Broadcast Digital Migration (BDM) policy, issued under Government Gazette no. 35014 required that the STB included a STB control system to protect the investment by the government in the form of the subsidy scheme as well as the electronic manufacturing industry.

SANS 862:2012, the National Standard adopted for STBs, stated that the main elements specified for security within the STB control function were:
• A secure over-the-air software and bootstrap loader
• A mechanism to prevent STB decoders from functioning in non-RSA DTT networks
• A STB Control system that will enable mass messaging

SANS 862:2012 stated that STB decoder manufacturers were responsible for the implementation of the security requirements specified by the free-to-air individual broadcasting service licensees in SA and for the proper configuration of the chipsets. In this regard manufacturers can obtain the security requirements from the free-to-air individual broadcasting service licensees in SA or from their appointed agents (trusted third parties).

A directive from the Minister mandated Sentech to establish and operate the STB control system. The scope of the directive did not necessarily include the STB user interface and the Subscriber Management System (SMS) operations other than that for STB control operations.

Adjustment Budget FY 2012/13
During this financial year, Sentech submitted a business case for the DoC for the funding of the STB control system upgrade. The request was made as an adjustment to the budget allocated to Sentech for the FY 2012/13. The DoC could not provide the extra funds within the current financial year. The Sentech Board had agreed to use the current DTT project funds to fund the upgrade, while the company awaited budget allocations for the next MTEF cycle. An order for the upgrade had been issued and Sentech should be in a position to support both the STB Request for Proposal (RFP) from service providers process and also meet the timelines for having the STBs available in the market.

DTT Migration
The DTT project sought to migrate from the analogue to the digital broadcasting system by June 2015 as sanctioned by the International Telecommunications Union (ITU) to which the South African government was a member. Sentech has been transmitting two signals since November 2008, i.e. analogue and digital to broadcasters and would continue to do so until analogue switch off. The dual illumination funding request was to cover the incremental cost arising from dual illumination over the MTEF period. The above requisition assumed analogue switch-off by June 2015. In order to avoid charging broadcasters for the digital signal until analogue switch-off, it was vital that Sentech receive an additional R213 during 2014 and 2015.

Towards launch and 80% Coverage
Sentech committed itself as ready and capable to support a national technical launch of DTT during the third quarter of the year, within the existing DTT coverage areas for terrestrial services. Sentech further submitted that, in line with the requirements of the amended BDM policy, it was able to demonstrate the reception of digital channels via direct-to-home satellite. Sentech was also working towards providing 80% coverage by the end of the financial year with full conversion of sites in Limpopo, Free State, Mpumalanga and KZN, and additional sites in Eastern Cape, North West and Western Cape (see document for footprint).

Community Television
Community Broadcasters had been given 10% capacity on Multiplexor. Only limited allocations had been made and rural populations generally had not been catered for except for programmes generated by the public broadcaster.

Regarding cost recovery, Sentech could not recover the 10% Multiplex (MUX;
system that combines more than one service into a digital stream on a single frequency) allocation in places where no such allocation has been made from the incumbent broadcasters. As a result, Sentech had to carry the cost of the rather insufficient MUX allocation.

Sentech proposed that, in places where no community broadcasting services existed, the spare capacity could be given to regional broadcasters (province-wide at the least) for the sake of efficiency. This was consistent with the BDM Policy. Sentech also proposed that subsidies for community TV broadcasters be increased in line with the new cost dynamics facing these broadcasters.

Department of Communications (DoC) presentation
Mr Themba Phiri, Deputy Director General:
ICT Policy Development, said DTT was an International Telecommunication Union (ITU) compulsory migration of broadcasting systems from analogue to digital technology. [The ITU was a specialised agency of the United Nations which coordinated the shared global use of the radio spectrum, promoted international cooperation in assigning satellite orbits, worked to improve telecommunication infrastructure in the developing world and established worldwide standards.]

Digital broadcasting technologies would release additional spectrum which will be used to licence new mobile services. Advantages included better quality picture, added channels of more than 16 per single frequency and benefit for language and content diversity.

SA’s self-imposed digital migration timelines were November 2008 to November 2011, which proved to be unrealistic. SA’s current commitment as a member of the ITU, was to complete its digital migration by 17 June 2015.

At an ITU Regional Conference in 2006, the SADC region adopted the Digital Video Broadcasting – Terrestrial standard. In 2010 this decision was revisited. In January 2011, the SA Cabinet adopted the second generation of the same standard, DVB-2, which had almost double the spectrum efficiency of DVB-T.

The final amendments to the Broadcasting Digital Migration Policy were gazetted on 17 February 2012.The main amendments were:
• The adoption of the DVB-T2 technology in line with a Cabinet decision
• Pronouncement of new Digital Migration timelines which included the DTT services launch during the 2012/13.

The Minister, after consultation with Cabinet and the broadcasting industry, would announce the exact dates on which the DTT services would be launched and analogue transmissions would be switched off.

BDM Policy Amendments
• accommodated three tier broadcasting services – public, commercial and community television services.
• promoted competition and the introduction of new broadcasting services.
• established the Digital Migration Office to provide project management and monitoring services to the DTT Programme.

DTT: Key milestones
• The STB Manufacturing Sector Development Strategy and
Scheme for Ownership Subsidy (SOS) Framework were approved by Cabinet in March 2012.
• The DoC had finalised the DTT Communication and Consumer Awareness Campaign
• The DoC had finalised and signed an MOU with the Department of Trade and industry (DTI) and the South African Bureau of Standards (SABS) for the establishment of a STB Conformance Authority to support the digital migration process and the local electronics manufacturing industry. The procurement of the conformance test facility had begun.
• Post Office partnership: DoC had signed an MOU with the Post Office as a possible SOS logistics partner
• The DoC had finalised the STB RFP for local manufacturing of STBs.

DTT Roll-out – State of Readiness
The STB Standard through the SABS process had been finalised and was launched by the Minister. The STB Control System would be developed under the auspices of Sentech and would cost R10 million. Final selection of manufacturers would be completed by September 2012.

Sentech
DTT network coverage currently stood at 61% of the total population. Sentech was on track to hit 80% coverage by March 2013 and 88% by December 2013. The remaining 12% would be covered by satellite technology. Sentech had so far been allocated R1.8bn for the DTT roll-out and to cover the dual illumination. The satellite part of the network was ready to be launched. Small infrastructure upgrades were done to accommodate the network growth.

Broadcasters
The SABC was ready to transmit SABC1, 2 and 3 on the DTT network. The SABC would have an additional 24 hour news channel ready for DTT launch. It had submitted a business case for funding for additional channels for DTT. The SABC and eTV were collaborating on a Free-To-Air (FTA) partnership. eTV and MNet were ready to launch on the DTT platform, awaiting approvals on ICASA regulations and tariff structures. An MOU had been finalised with the SABC for joint FTA brand collaboration.

South African Post Office (SAPO)
The SA Post Office had signed MOUs with the DoC, SABC and the Universal Service and Access Agency of South Africa (USAASA) for the distribution logistics.
USAASA was a SOE established through the Electronic Communications Act, No 36 of 2005, to ensure that "every man, woman and child whether living in the remote areas of the Kalahari or in urban areas of Gauteng can be able to connect, speak, explore and study using ICTs”.

SAPO had begun designing software processes for the distribution of STBs to qualifying subsidy recipients. SAPO would be working with USAASA on distribution logistics countrywide, under DoC’s supervision.

USAASA
R940m was ring-fenced at USAASA for this financial year in relation to STB subsidies. USAASA was to place STB orders with manufacturers on behalf of the DoC and pay after STBs have been delivered to SAPO warehouses.

Independent Communications Authority of South Africa (ICASA)
Draft DTT Regulations had been released for public comment. ICASA had targeted the end of September for approval and finalisation. ICASA was also finalising tariff structures with Sentech and in collaboration with the broadcasters.

SABS
The SABS had completed its tendering process and was partnering with DTG and DTVL from the UK for their STB Conformance Intellectual Property. The STB Specifications were finalised and launched at the ICT Indaba in June 2012. The Conformance lab should be ready by October 2012. SABS had been allocated R10m by the DoC to fund the Conformance lab.

Current situation
• 61% of the population was covered including all major metropoles.
• New equipment ordered to cover 80% of population by March 2013
• SAPO distribution procedure has been finalised and MOU between DoC and SAPO signed.
• The SABC, eTV and MNet was ready to transmit all their channels onto the DTT network.
• RFP Process for appointing local manufacturers of STBs had been released and evaluation would be completed by mid-September 2012.
• Call Centres were being finalised by the SABC, eTV and Sentech, and the DoC already had a call centre running to answer the question generated by the awareness campaign.
• The SABS was setting up the conformance lab. The target date for completion was end September. R10m had been allocated to purchase the laboratory equipment.
• The launch was earmarked for September 2012. The launch would demonstrate the two ways through which the policy envisaged the services would be provided. Firstly through DTT and secondly through satellite in the remote areas. Both DBVT and DCH would be implemented.

Mr Phiri then addressed the shortfall the DoC was encountering while in the process of rolling out DTT. It needed STB subsidies to the tune of R2.635 billion, over and above the R940m he referred to earlier on. The overall shortfall, including the SABC’s technology upgrade and Sentech’s dual illumination requirements, was R7billion.

DTT Phase 1 Launch
Mr Roy Kruger, Technical Adviser to the Communications, added to the DoC presentation by elaborating on the launch. He said the DoC had targeted the Square Kilometre Array (SKA) area in the Northern Cape. The reason for choosing the Northern Cape was twofold. Firstly, Phase One of the launch was called ‘A Proof of Concept’ and the proof of concept was to show that DBVT did work, secondly that the frequencies used did not interfere with the SKA Project and thirdly to show people in the deep rural areas without access to TV before, could now have SA TV.

The launch dates were 26 and 27 September 2012. The logistics and political arrangements were in place already. The launch would have two components to it, namely Satellite or Direct-To-Home around the Square Kilometre Array (SKA) to prove that the SKA signals would not interfere with broadcast signals, and DTT transmission to a township near Kimberley, which currently had the only DTT transmitter in the Northern Cape. Hopefully the Minister would do the launch.

The DoC had received some negative press regarding the DTT Roll-Out Project, saying it did not know what it was doing. It knew what it was doing and the project was going ahead full steam. The DoC was mandated to create several categories of jobs with this project.

The first type of job created by this project would be in the manufacturing environment. Due to automation there would not be that many, only 800 to 1 000 jobs. These would include more jobs at existing factories and new jobs at new start-up SMME companies.

The second type of job created would be in the installation and maintenance of the STBs. There was a parallel project with the broadband going up. Part of the e-Skills training of the DoC was to train the technicians on both broadband and DTT. They were going to be trained to maintain and support these technologies in the long term. To start with there would be 3 500 new installers, who had been identified already. There was a list of names with qualifications, which towns they were located in and the plans for the training were in place.

The third type of job created would be call centre jobs. People asked why the SA government did not just buy cheap STBs from China. Firstly, the government wanted to create jobs locally. Secondly, SA was not China. SA had eleven official languages. SA languages would be used on the locally produced box. Thirdly, the user interface would be laid out as a SA standard. This would make it easier for the call centre staff to trouble-shoot when users called in with problems. A STB from China would not be set up like that. Fourthly, only small components would be imported. The majority of the material to build the STBs would be locally manufactured. Fifthly, e-government services would be implemented on these STBs, which would be impossible with cheap Chinese imported boxes. Sixthly, the DoC implemented a return-path capability. The box would be internet enabled and would be able to bring information to the user and provide an interactive service. Companies could make educational programmes, video-on-demand and other services available on this platform. It opened up a whole new downstream value-chain. The seventh point was that the STBs would introduce games. It would make traditional African and South African games that children played in rural villages, in digital form available to the current generation of children. This would not be available on cheap Chinese boxes.

The call centres would create a minimum of 2000-3000 jobs. These were extrapolated from the incumbent pay TV operator who had 3 400 customers on their system. They had a call centre employing 1 500 people. The DoC was aiming to have 11.4m people on its network. It would need about 6 000 call centre operators.

The biggest job creation sector in the project would be in the content sector. Mr Phiri said between eTV and the SABC, there would be around 20 new channels. This meant that tons of content was needed to fill up the space. A minimum of 10-15 000 jobs would be created in this sector.

Discussion
The Chairperson commented that the presentations of Mr Phiri and Mr Kruger should have been in one document. Mr Kruger elaborated on job creation and gave detail that was not available in the presentation. She wanted the detail of his presentation in black and white, because when she spoke to the people in her provincial constituency, she wanted to pass on the information.

Mr M Sibande (ANC, Mpumalanga) reprimanded the Sentech delegation for not being balanced in terms of gender. He warned the delegation not to underestimate the seriousness of the Select Committee regarding gender sensitivity and asked them not to come to the Committee with male-only delegations.

Mr Mongake replied the delegation had an apology from Ms Zanele Hlatswayo and Ms Sharoda Rapeti. Out of the eight non-executive directors, three were women: Ms Leah Khumalo, Ms Hlatswayo and Ms Rapeti. It was an omission on the part of the delegation to not hand in these apologies. The board of Sentech was trying hard to ensure healthy gender balance.

The Chairperson said that the next time around, the women had to hand in the men’s apologies.

Mr Z Mlenzana (COPE, Eastern Cape) noted that page 2 of the Sentech presentation did not reflect Ms Rapeti as a non-executive director.

Mr Sibande said the presentation was dealing with a national and an international competence. There was a SADC resolution on the migration to DTT that he believed stipulated that by now the migration had to be completed. There was a Geneva resolution on this matter as well. Was SA managing to stay within the bounds of these resolutions regarding the migration from analogue to digital TV?

Mr Mlenzana said the presentation talked about protocol. He was consistent with the debate. He knew the SADC Resolution as well as the ITU. There were two timeframes. Did the DoC think SA would be able to meet both the analogue switch off dates for December 2013 as per the SADC Resolution and the ITU’s of 1 June 2015? If so could the Committee be provided with a progress schedule for all provinces as shown on p10 in the presentation for the Free State and Limpopo? It would keep the Committee well informed on the progress of the DTT roll-out.

Mr Phiri replied that it was very clear that the country could not meet the SADC deadline for 2013. There was not sufficient time to complete the work. There were also funding constraints. The country would be able to meet the ITU deadline of 2015. It still had a full three-year period to do the work.

Dr Mohapi apologised for not displaying the Project Plan for other provinces in the presentation and explained that he had the detailed Project Plan for this year’s projects which was targeting 80% population coverage. The overall project plan had been developed and was being updated by the project team. The project team would give a response on that.

Mr Sibande asked whether the DoC had considered that the shortfall of R7b could become bigger over time until the finalisation in 2015.

Dr Mohapi replied that Sentech had made provision for the escalation of cost in the budgeting in the MTEF. In 2011 it worked out a three-year budget which made provision for the inflation. Labour costs were kept low by making use of local labour. Sentech was monitoring the cost on a regular basis and had not seen the cost escalate outside of the boundaries it made provision for. The DDG would be able to respond to the question on the cost of STBs. The cost was going down not up according to his knowledge.

Mr Sibande said the DoC announced in its presentation that it would launch the migration to DTT on 26 and 27 September 2012. The dates had been decided upon, but when would it be finalised?

Mr Mohapi replied that a project team had been set up, which met with the DoC regularly. Sentech’s contribution to the launch would be providing the DTT network around Kimberley and the satellite network in the rest of the Northern Cape. It wanted to demonstrate the fact that amendments were made to the policy. It now specifically said 100% access for free-to-air broadcasting services. In this case, policy said if people in SKA area could not get DTT, they would get reception via satellite. The policy went further and said that the people in that area would be subsidised for this reception. The Sentech contribution to the launch would be infrastructure and anything else the department asked Sentech to contribute.

Mr H Groenewald (DA, North West) said the Select Committee and other relevant Committees had to be invited to these launches in order to see what was happening on the ground.

Mr Groenewald asked what exactly ‘low power’ was.

Mr Mohapi replied that low power referred to where communities were situated amongst the mountains in valleys where the signals were not able to reach. It was low power because it only covered a small area. A site could be put directly over a community to provide a signal to that community. It was done across the board in all provinces. In the Northern Cape there was a low density of population. The main sites did not reach the outlying communities. Sentech could then put a local site there for people.

Mr Sibande said there was a contradiction in the Sentech presentation. On p14 it said that in KZN there were 21 sites that had been upgraded, while at the bottom of page 13 it said that Ulundi required a new mast and UHF antenna system. For STBs to be functional, the antennas already had to be in place.

Dr Mohapi replied that the Ulundi mast and antennas were on site already. They just needed to be installed. It would not happen in this financial year, but in the next. The province of KZN would be completed by the end of 2013.

Mr Sibande felt that it was a good move to call the DoC and Sentech to the Committee together, but felt that the other broadcasters like the SABC had to be included, because there were problems with radio reception in the deep rural areas.

Mr Groenewald said the presentation said when the rural area upgrades were done the whole province would be covered. However, on oversight visits to Limpopo the Committee experienced many parts of the province were not getting radio reception. Would all those deep rural areas also be covered with the DTT roll-out?

Dr Mohapi acknowledged that all did not have radio reception. Sentech was working on it together with the SABC. In Cape Town, radio stations such as Lesedi and Thobela were not available. DTT would not only bring wider geographical coverage, it would also bring diversity of languages to all corners of the country.

The Chairperson asked Mr Kruger what the timeframes for job creation were. When would training start? What criteria were used to select the people? The DoC did not communicate with the Select Committee regularly or make use of its network of constituency offices to spread information on the ground.

Dr Mohapi replied that Sentech would come back with information on job creation within this process. Sentech made lots of commitments. It engaged many local companies on the project. This process was new for Sentech too. He would get the data and make it available to the Select Committee. Local participation had increased significantly since 2006 and 2009.

Mr Phiri said the job creation figure was 23 500 direct and indirect jobs from the rollout of digital TV. These included all the categories Mr Kruger spoke about. At the launch of the DTT in September, the period would be kick-started. The training was in progress. The local companies which would be manufacturing STBs were currently manufacturing decoders and televisions. There were also some new manufacturers coming into the country. With requests received by the DoC, the industry was preparing. This sector of the industry was also expanding visibly.

The Chairperson asked whether the jobs created, would be sustainable.

Mr Phiri replied that this was definitely a manufacturing opportunity. The STBs would have to be repaired and maintained and this made jobs sustainable. Mr Phiri replied there were a detailed plan for job creation and a separate plan for training which would be run by Dr Harold Wesso:
e-Skills Institute Programme Manager. He committed to send these plans to the Select Committee in order to provide the detail the Chairperson required.

Mr Sibande said the presentation stated that DBVT2 technology had been adopted by Cabinet in March 2012 already. Where was the problem then if Cabinet had given the green light?

Mr Mlenzana asked why the Japanese ISDBT standard had been rejected.

Mr Phiri replied that the DBVT2 and ISDB Japan issue had been concluded by SADC in November 2010. The decision to adopt the DBVT2 standard was informed by the consensus reached at SADC level. There were many other reasons for adopting this standard. The whole Region 1, which included Africa and Europe adopted this standard because some of the standards of ISDBT had not been finalised by the ITU. Some countries which had adopted the ISDBT standard had to reject it again because of the uncertainty. The adoption of the DBVT2 standard was a collective decision of countries in the SADC region.

Mr Sibande was impressed with Mr Kruger’s statements about job creation, but he asked in terms of competition, was SA going to provide service in the SADC region, or was it going to stand against international competition. China had a manufacturing plant in Lesotho. SA citizens said that Chinese manufactured goods were “fongkong”, but still used it. Where were the components for the STBs going to come from? Would it be manufactured locally or internationally?

Mr Jacobs said Mr Kruger said people are going to be trained in towns. Which towns? What for? How were they identified? What were the criteria in terms of which they were chosen?

Mr Groenewald asked how many people were already being trained for this process.

Mr Mlenzana asked, if the manufacturing would be done in SA, how far was the DoC with the training of the would-be manufacturers? Who would be those manufacturers? He did not know whether the STBs would be able to go out on tender, because he did not think anybody in SA would be able to manufacture it. When will STBs be finalised? Before, the DoC was talking about a scheme, but now the DoC was talking about a subsidy more than the scheme. Which was which? The DoC had eloquent people, even today. Mr Kruger was eloquent and could articulate things well. Which ultimate mandate would SA be towing? BRICS or SADC? Would the STB only be assembled in SA out of foreign produced components or would the manufacturing of the components be done in SA.

Mr Groenewald said the presentations mentioned the antennas which were very heavy and used to put the transmitters on. Where were they manufactured?

Dr Mohapi replied that the antennas came from outside the country. Installation was done locally. When one had a mast, there were feeder cables and antennas. Strengthening of the masts were all done by local companies. Feeder cables that were used in the masts were produced locally. Generators were upgraded by local companies spread out around the country. To construct the buildings in Limpopo, local construction companies were used although Sentech still had an open tender process. All this information would be given when Sentech reported back to the Select Committee.

Mr Phiri said he had to clarify that the chip sets on the motherboard of STBs were not locally manufactured. They were made in Japan and other advanced markets which had much acceleration in terms of research and development. The motherboard was however populated in the country and in terms of the rules of the DTI, this counted as local manufacturing.

Mr Sibande asked how kids were going to be prevented from accessing games and unsavoury content internationally through the STBs? They were technologically savvy and were doing it with their cell phones already.

Mr Sibande asked Sentech to provide a list of the SMMEs that would manufacture the STBs. Typically, the companies involved would only be based in the Western Cape and Gauteng. There was no geographical spread over the nine provinces and especially the rural ones.

Mr Phiri replied that the DoC had asked SAPO to a keep record of SMMEs it was working with in terms of logistics. It had not asked the STBs to be put in warehouses yet. This list could be provided.

Mr Sibande asked how the 11 official languages were being popularised within the process of the DTT rollout.

Mr Mlenzana asked how Sentech defined rural vs urban. He was from Mount Frere, which was a town in a deep rural area. If he looked at pages 7 and 8 in the Sentech presentation where it stated the footprint of the rol-out, it only mentioned East London, PE, Despatch and Grahamstown, which were not deep rural towns and were situated in the western part of the Eastern Cape. What about the deep rural towns in the eastern part of the Eastern Cape.

Dr Mohapi replied that Sentech used StatsSA’s definitions of rural and urban. With DTT all 18 radio services channels would be available everywhere in the country. Sentech acknowledged that the previous plan was designed in 2006 and that the picture was skewed away from the rural areas. Within the new plan, all sites, for example in Limpopo, would be converted at one time. The urban-rural divide would disappear. This came with the New Provincial Project Plan.

Mr Mlenzana referred to page 14 of the Sentech presentation which said Matatiele was in KZN. Battles had been fought so as to include it in the Eastern Cape. He asked for this to be corrected with immediate effect.

Dr Mohapi acknowledged the mistake of listing Matatiele as a town in KZN.

Mr Mlenzana said the presentation referred to about four provinces. Where there were others? It stated that Sentech was almost finished with Mpumalanga. Yet it only referred to two provinces with time frames.

Dr Mohapi replied that Sentech had been asked to put together a full broadcast master plan. If there was 95% coverage, the 5% that did not get coverage comprised a lot of people. The right to information for everybody was a constitutional requirement. This led to the target for a 100% access. Sentech was working with the SABC and ICASA on the Broadcast Master Plan. It would most likely be part of Sentech’s Corporate Plan when it submitted it to Parliament in 2013.

Mr Mlenzana said Mr Sibande talked about price changes. Before, the prediction was that the unit price for a STB would be R700. Would it remain the same? He was asking so that Members could inform their constituencies in the provinces. He was scared that the price would increase drastically.

Mr Phiri explained that as countries adopted the technology, the price came down. A STB would cost the consumer around R400 instead of the previously estimated R700. The DoC got this price from local manufacturers. It took into account inflation as well.

Ms L Mabija (ANC, Limpopo) was impressed by the logo of the DTT migration campaign. To her it said: ‘Go digital’ to the Rainbow Nation. The logo said that DTT had to be right. The mandate of the DoC’s role was to provide policy direction and coordinate all stakeholders, which were4 the SABC, Sentech, eTV and MNet. The DoC also monitored how these stakeholders were delivering throughout the process.

Ms Mabija said USAASA had many internal problems, to the extent that the Minister had to appoint two caretakers. Would USAASA be able to deliver on its mandate in terms of STBs?

Mr Phiri replied that USAASA had challenges currently, but with the support of the DoC, would be able to play its part. The DoC was busy with the process of filling vacant executive positions in USAASA. It would regain its full functionality within the next few months and would fulfil its role.

Mr M Jacobs (ANC, Free State) referred to the rollout in the Free State. There was a place called Suidrand in the Free State. When the presentation talked about Ficksburg town, it excluded the township. Did the list of 11 places in the Free State mean that the Free State was complete, or did the remaining places have to wait for another budget? He asked whether the DTT, when it was installed, would cover rural areas or only areas already getting TV.

Dr Mohapi replied there were two sites. One was next to his area and another one next to Welkom on the N1. He could provide maps of all the sites. He could show provincial maps with all the sites in each province. Sentech was going to upgrade its planning tools in order to give more detailed information. As in all other provinces, the rural/urban distinction in provinces would be removed.

Mr Jacobs asked whether there would be TVs which did not need STBs?

Dr Mohapi replied that there were TVs that did not need STBs. The DoC could explain how they fitted into the programme.

Mr Phiri replied that integrated digital TVs were already available in other markets and eventually would be available in SA. It was currently too expensive. The DoC did not think poor households would be able to afford them. Hence, the government subsidised STBs. People would gradually start buying these TVs as the price came down.

Mr Jacobs asked why SA was allowing Chinese STBs to be sold in SA. Were SA scientists failing to make the imported STBs unusable in SA?

Mr Groenewald said in 2009 when the DoC did a presentation on this matter, it said that the STBs were going to be imported from China. Today it was a different story. Today the DoC said the STBs would be manufactured in SA, but the components would still come from other countries. The knowledge existed in SA to manufacture the components as well. Why could everything not be done in SA to create more jobs? The Committee had to see that jobs were created in SA and that the money stayed in SA. Why was it still necessary to import?

Mr Phiri noted that Mr Kruger had mentioned that SA wanted to keep the money here and create jobs here and grow the SA economy. There was no law that could ban Chinese STBs from SA. SA could not ban any country which was a signatory to the World Trade Organisation (WTO) to sell its STBs here. This aspect was discussed extensively with the DTI. It was taking steps to make the locally manufactured STB more attractive to the consumer, including lifting some of the taxes charged for the commodity.

Mr Phiri replied that the plan was to make it impossible for foreign manufacture STBs to tune in to the local market. The conformance testing was a way to make sure that the STB market complied, the locally manufactured STBs would then be adopted widely. The call centres would only support locally manufactured STBs. There was local capacity to manufacture STBs according to the report. The Department of Trade and Industry (DTI) and the DoC had visited factories in SA. This visit informed the decision by Cabinet to have the STBs manufactured locally. The DTI was making efforts to designate STBs as a locally manufactured product. This gave a lot of incentives to local factories to create the jobs. The SADC market was expecting SA to support it with respect to trade with the SADC countries. The DoC believed it was an opportunity for local manufacturers. The manufacturers had to beef up their capacity, because DTT guaranteed immediate demand for the decoders.

The Chairperson said the presentation talked about a consumer awareness campaign, but no details were given.

Mr Phiri replied that there was a detailed plan on how DoC was going to run a communication awareness campaign.

Mr Phiri said the plan for the DTT awareness campaign was available. The launch of the plan was in tandem with the launch of DTT in the Northern Cape. There would be a mass campaign on radio and TV in all languages as well as outreach programmes in various provinces.

The campaign would follow the Sentech finalisation of signal coverage in the provinces. There would be focussed awareness creation to make sure that the people in that province could adopt DTT. It was a project where people had to take action.

The Chairperson said the SA Post Office (SAPO) needed 200 additional outlets to meet the licence conditions of rolling out a post office for every 10 000 people, yet it would be required to partner with the DoC to roll out STBs. Would SAPO have the capacity to do the distribution of STBs?

Mr Phiri replied that the DoC believed SAPO was the correct choice to reach the deep rural areas and was an important stakeholder. The partnership was working well. It was handling the logistics and warehousing. It assured a safe way of transporting the STBs. SAPO was present everywhere in the country. Some of its facilities would need upgrading. There was a detailed plan and it was able to work with SMME players.

SAPO also helped the DoC with the online system for the STBs. This was a capability it already had because it helped with pension distribution as well. The DoC paid for services rendered by SAPO, but it was a cost-effective partnership.

The Chairperson asked where the Digital Migration Office was, what its mandate was and when it would be fully staffed. He asked how the DoC would be dealing with the requirements to create more content when additional channels were created.

Mr Phiri replied that investment and content was important. SABC’s investment for content was sizeable. The SABC and eTV expected to increase content reach to 11 channels. They had started with 8 and increased over time. It would then be phasing in the 18 channels over time.

The Chairperson asked where the call centres would be situated. She was from Hazyview, Nkomaas, Mangweni, Mpumalanga. When doing oversight over Vodacom, the Select Committee discovered that all its call centres were in the middle of cities. As rural people, the Select Committee want to be assured that by 2014, there would be call centres in rural areas, due to its efforts.

Mr Phiri replied that the issue of call centres was a sore point. The funding was not guaranteed. The DoC applied to national government for funding. The SABC had designated a portion of its building but it was not enough. It was important to have the call centre to provide all the requirements. eTV would have its own call centre.

The Chairperson asked Mr Kruger to provide the Select Committee with a written version of his verbal presentation. She said if communication between Sentech and the DoC was better, they would have put together a joint presentation. She asked whether they communicated and planned a joint presentation. She made a plea for better communication amongst the related bodies. The Select Committee would follow up on Mr Sibande’s proposal that all the broadcasters come to the Committee together in order to enhance communication and tackle common issues in a more coordinated way. She said that although the DoC was not communicating with the Select Committee, the Select Committee was promoting the DoC.

The Chairperson said in terms of the amended policy, Sentech was supposed to cover 74% of population by early 2012 but by August 2012 it only achieved 60% urban and 12% rural coverage. Why was Sentech so far behind in the rural areas?

The Chairperson asked when the awareness campaign would be conducted. When would it commence in the rural areas? She told the DoC and Sentech to let the awareness campaign start in the rural areas. She agreed with Mr Mlenzana that she also did not understand who did Sentech’s research in terms of the urban/rural balance. If the DoC and Sentech spoke to the Select Committee it would have a more realistic view of the situation. In Sekhukune (on a Taking-Parliament-to-the-People visit) the Select Committee discovered people who could not get TV reception.

Dr Mohapi replied that 74% was in Sentech’s original corporate plan but last year immediately after the first quarter, it realised the problem and made it public. The problem was that the supply chain needed to be beefed up. It had to do things fast, but also right. Hence the target changed to 60%, but on the basis that it had a stronger up supply chain department. Most of the supply chain work on DTT was complete.

Dr Mohapi replied that there was a change of standards from DBVT to DBVT2. Sentech had rolled out many DBVT transmitters already and had to upgrade them to DBVT2 transmitters. This set Sentech back.

Dr Mohapi replied that Sentech was catching up. The new provincial plan would force Sentech to catch up in rural areas.

The Chairperson asked the DDG to provide the requested information to the Committee within a 14 day deadline. Mr Phiri said the information was available and just needed to be sent. The Select Committee then agreed on 17 August 2012.

The Chairperson asked the DoC to keep the Committee updated on all DoC activities and events in the provinces. The Committee planned to have a Committee meeting on site with all the stakeholders. Even if the whole Committee could not be present, it would send a representative. She asked the DoC to please communicate with the Select Committee.

The Chairperson reiterated that the DoC delegation tell the DG that she had only attended one meeting of the Select Committee. The Select Committee needed a written apology for non-attendance from her.

The Select Committee had taken a decision to not only meet in Parliament, but to meet around the country wherever events were happening.

The meeting was adjourned.


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