Digital Terrestrial television (DTT) migration state of readiness: input from SABC, Sentech, M-Net, USAASA, SAPO, NEMISA
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Communications and Digital Technologies
28 November 2012
Chairperson: Mr E Kohlwane (ANC)
Meeting Summary
Members again expressed unhappiness that the Director General in the Department of Communications was not present at these hearings.SABC continued its response to questions directed to it the previous day. On the question about the Atos / Siemens contract, the SABC Group CEO made statements alluding to the Committee being abused to forward the agendas of certain parties. The difficulty of this question was that many people had an interest in Atos and she believed the interest of the party concerned went beyond normal ethical practice. The Chairperson refuted this – it was the Committee that had instructed the SABC to evaluate the Atos contract. All that had followed was as a result of that instruction by this Committee. The Committee instructed the SABC to stop entering into unnecessary contracts. When Members had information on pertinent issues, they normally forwarded it to the Chairperson’s office and the Committee formulated a response collectively. However, he could not stop Members on their own from raising issues directly at Committee meetings.
The SABC also addressed questions about consumer contracts, how it informed its audiences about digital migration and if it was working with SAPO or taking sole responsibility for informing consumers. SABC replied that it had been collaborating very closely with the DoC on consumer education. The initial awareness campaign ran on all SABC platforms. The SABC was running a programme called ‘Nation at Work’, of which four episodes in the series were devoted to digital migration. The SABC would embark on a strong campaign as soon as there was finality about when the switch-on was going to happen
Sentech provided the infrastructure from which the analogue broadcast signals of the major broadcasters were sent. As the country moved closer to the promised ‘digital implosion’, Sentech was confident that the Committee, its Shareholder and all partners in the DTT ecosystem would provide the necessary impetus to realise this dream. Sentech however remained concerned with a number of uncertainties in the DTT ecosystem, most notably:
• Digital Terrestrial Television Migration Regulations;
• Industry Coordination Project Office/Team; and
• Set-Top Box Subsidy Scheme.
Looking at maps, Sentech had reached 60% rather than the projected 74% population coverage. However, the DTT coverage still touched every province even though there was a skew towards urban areas. The provincial rollout programme would ensure that, moving forward, there was always a balance between rural and urban areas. By the end of November 2012, an additional eight sites would be completed – adding an additional 2.02% in population coverage to 63% and geographic coverage to 25%. All SABC channels would be transmitted from the same sites, with varying degrees of increases in both population and geographic coverage. The coverage requirements for e.tv and MNET remained a technical and financial challenge for Sentech.
Sentech’s tariff model was based on the consideration of a number of factors, including but not limited to: - acceptance of the discretion that broadcasters retain on the elements of the Sentech network they may choose to use; - shared assets and operating costs; and - costs that vary depending on multiplexor allocations and coverage areas. The tariff model was based on re-valuation of assets and consideration of operating costs specific to DTT and service level agreement commitments. The tariff model had been shared with broadcasters and the regulator. On finalising the DDT tariff model, Sentech said it had completed its tariff model, generated draft tariffs and continued to engage broadcasters on the new tariff regime.
The amended Broadcast Digital Migration (BDM) Policy, provided that the Set-Top box (STB) must include a STB Control System to protect the investment by Government in the Subsidy Scheme. SANS 862 stated that the main elements specified for security within the STB control function for government-subsidized STBs are: - a secure over-the-air software and bootstrap loader; - a mechanism to prevent STB decoders from functioning in non-RSA DTT networks; - STB Control System that would enable mass messaging.
SANS 862 also 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 South Africa and for the proper configuration of the chipsets. In this regard, manufacturers could obtain the security requirements from the free-to-air individual broadcasting service licensees in South Africa or from their appointed agents (trusted third parties).
Only 4 million of 12 million TV owning households were used to the complex home environment that would come with digital terrestrial television. The remaining 8 million households would need support as they got used to the increased technical complexity in the home;
In its MTEF 2012 – 2015 Corporate Plan, Sentech submitted that the Analogue Switch-Off (ASO) date of June 2015 required Sentech accelerate Network Infrastructure rollout. In order to meet this deadline, Sentech would require all CAPEX funding for DTT to be allocated in the 2013/14 financial year to enable procurement of capital infrastructure. In the Corporate Plan, Sentech further submitted that in terms of the rollout plan and the planned regional ASOs, the company would require Dual-Illumination funding for the 2014 and 2015 financial years until national ASO. Additional funding of R207 million had been requested. Subsequently, National Treasury had approved Sentech’s request to retain interest earned on DTT CAPEX & OPEX funding. The total cost for the STB Control was R3.2 million. Accordingly, the STB Control CAPEX and OPEX for Year 1 were now fully funded. Sentech, however, submitted that there were additional costs associated with STB Control, and these would be provided for in the STB request for proposal (RFP) between the STB Control Vendor, STB Manufacturers and the Department of Communications.
The presentation further set out the roll-out plans for the 2012/13 FY.
Community broadcasters allocated 10% capacity on Multiplexor (Mux) with only limited allocations having been made so far. Rural populations have not been catered for in local television (outside the programmes that may be generated by the public broadcaster);
With respect to cost recovery, Sentech was not in a position to recover the cost of the 10% Mux allocation in places where no such allocation had been made, from the incumbent broadcasters. As a result, Sentech had to carry the cost of the rather insufficient Mux allocation.
Sentech had made the following proposal in response to the DTT draft regulations: In regions where there were no community broadcasting services, Sentech was of the view that an allocation of the spare capacity should be assigned to any interested broadcaster at regional level (i.e. minimum provincial coverage) in the spirit of efficiency, fairness and enhancement of competition in the broadcasting industry.
Members asked if clients would have to pay for the aerial separately from the STB; what would happen to unused spectrum; whether clients would pay for spectrum allocated rather than spectrum used; if one would have DTT reception throughout South Africa; whether Sentech would use direct to home signal distribution; what would happen in informal settlements and rural areas where people could not hang their aerials outside; whether the only obstacle in the way of the DTT roll-out was financial, or whether there were capacity constraints in the form of engineer shortages.
M-Net had last presented to the Committee on Digital Terrestrial television (DTT) Readiness in September 2011. Its message then was that globally countries were moving to digital broadcasting and that the future was digital. Set-Top boxes (STBs) or digital converters were an interim step for analogue TVs to receive digital transmissions. South Africa was the first African country to commence DTT trials in 2001, but the rest of Africa had caught up and overtaken SA. DTT had commercially launched in Uganda, Nigeria, Kenya, Tanzania, Rwanda, Zambia, Mozambique, Burundi and Namibia. Fourteen months later DTT had not launched in SA yet.
While the delay in launching DTT in SA had a negative impact on M-Net in the sense that it lost money to the maintenance of deteriorating analogue networks and losing subscribers, it had the positive spin-off, that the company had had time to experiment in the field which gave it valuable insights into the DTT roll-out process, which meant it would make fewer mistakes during the actual DTT migration when it happened.
There were a number of hurdles to overcome before the launch could happen. Government still had to complete the following tasks: DTT Regulations, Channel Authorisation, STB Control (e.tv litigation), Conformance Regime, Dates for Dual Illumination Period, DTT Project Plan for ASO, Sentech Rate Card (correct pricing). Other challenges were:
▪ STB Manufacturer uncertainty which was delaying the commencement of manufacturing.
▪ Consumer uncertainty - No consumer campaign or Digital Certification Mark Scheme in place.
▪ Sentech tariffs were too high (3.8 times higher than it should be) and ICASA had not formulated regulations on the matter yet.
The planned starting date for digital migration was December 2013. If the (1) DTT Regulations were published, (2) the Digital Channel Authorisation was fast tracked, (3) the Minister published the dual illumination period, (4) FTA channels could be received on all STBs (FTA/Pay) in the interest of a single STB per household, and (5) the Sentech Rate Card was finalised, M-Net would be ready to launch.
Members asked whether one would need a STB if one already had a M-Net decoder, and what the difference. Members were surprised to learn that STBs would be phased out eventually, as people started to use Integrated Digital TVs (IDTV). They asked what exactly IDTV was. Members asked what the criteria was for selection to be trained as an installer, and how long it took trainees to get up to speed in the Soweto Trial. Members asked where the projected 24 000 installers would be located and who would pay their salaries. Members asked why M-Net showed repeats all the time. Members asked what alternative broadcasters like M-Net had if it did not want to use Sentech’s signal distribution network anymore.
USAASA had to manage the Universal Service and Access Fund (USAF). Cabinet had approved funding from the USAF for subsidies for the cost of a Set-Top box (STB), antenna and installation for poor TV-owning households. USAASA was required to manage the disbursement of the subsidies to such households. Eligible households had to meet the following criteria: The household had to own a functioning TV set, the applicant had to be a South African citizen and the combined household income had to be equal to or below R3 200. Households depending on a child support grant, old-age grant or a disability grant were automatically eligible. Households that were already covered by a Concessionary TV Licence were also eligible. When an applicant had successfully applied for the subsidy, he had to pay a 30% contribution to receive the STB and aerial as well as an installation voucher. After installation, the client would sign the voucher and hand it over to the installer. The installer would present the signed voucher to a SAPO branch, where it would be exchanged for payment.
USAASA had signed MOUs with the Department of Communications (DoC), SAPO and the SABC for each to perform its role in the STB roll-out. USAASA would manage the ordering of STBs from appointed manufacturers and payment of subsidies through SAPO, while SAPO would manage the application and logistics processes. DoC would manage the training and accreditation of installers, and the SABC would be crucial in the applications for TV licences and verification. USAASA, the DoC, the SABC and SAPO were almost ready for the launch of the roll-out, and were prepared for the majority of possible eventualities.
Members asked how many concessionary TV licences had been issued; how many households were projected to benefit from the STB subsidies; would SAPO or USAASA check for eligibility; what was USAASA’s role in the process and why SAPO had most of the responsibility during the roll-out. Comments from some Members included concern that this was an over-complex, cumbersome programme and was the cost justified if it was going to create only a few thousand temporary jobs. Another concern was that USAASA did not seem to have a proper project plan in place and nor were there time frames. Several Members were skeptical of USAASA’s competence to fulfil its role in the STB-roll-out.
SAPO had been appointed by DoC and USAASA to assist with the distribution, delivery and installation process of the STBs to get the signal to needy households. Five million households were projected to be eligible for the STB subsidy. A high-level process-flow working document for the Set-Top -box distribution had been designed covering the areas from qualifying criteria to installation as well as the replacement of faulty devices. DoC, USAASA and SAPO had agreed on their respective duties and signed an MoU which was signed-off on 26 July 2012. A Service Level Agreement (SLA) with final commercial details based on the agreed upon processes will be completed by the three. A table showed the progress in the implementation process. The early preparatory steps were all completed, but subsequent steps were not. Training had been scheduled for 25 September 2012, and the start of implementation was 5 November 2012. It was 28 November 2012 and the implementation process was still under discussion.
Members asked why SAPO did not take over the STB roll-out process from USAASA; what the 5 million beneficiary figure was based on and if it had been checked against Census 2011; how those post offices which were not digitally networked, would participate in the STB roll-out and what risk they posed; whether the risks in the roll-out process had been assessed and if mitigation measures were in place.
Nemisa focussed on training installers for the DTT roll-out process. The training would happen in three phases. The first would be the up-skilling of existing DSTV installers. There were more than 1500 of them and they would be trained to do the DTT installations, which did not differ much from DSTV installations. The second phase would involve the training of Community Support Representatives. Experience had been derived from the M-Net test DTT installations in Soweto where it was recognised that people with DTT installation prefer to have a local community person assist them when they have problems with the installation. The most important skills were soft community support skills. The third phase would involve the training of new installers. This group would consist of newly trained installers with both DTSV and DTT technical installation capabilities. The learners/new installers would have to be selected and managed and the finance for the programme needed to be secured.
The idea was that the training for this project would not happen in isolation, but would be the start of a learning pathway i.e. from digital migration to digitisation, leading to a formal qualification. The training programme would have to be subject to monitoring and evaluation to determine its strengths and weaknesses.
Members asked where the training would take place and how long it would take; whether enough installers would be available in the different language groups; whether National Treasury would pay for the training and how much it was going to cost.
Meeting report
Mr Schneemann, who had been delegated to chair the first part of the meeting, noted that the Minister and Deputy Minister had sent apologies. He was not sure whether the Director General would attend.Ms Lesoma said it was a serious matter that the DG was absent from the meeting and could not be contacted. She asked for progress on this matter.
The Chairperson replied that the DG might not be coming.
Ms Lesoma said that the absence of the DG had serious connotations and the Committee had to deal with this at another time.
Mr Schneemann recalled that the SABC had delivered its presentation the previous day but some questions went unanswered. The SABC delegation was on hand to answer those questions.
SABC Responses to questions asked on 27/12/2012
Ms Lulama Mokhobo, Group CEO, SABC, said she believed the questions not responded to, related to the Atos and Siemens matter. She questioned the agenda and the ethical soundness of the interest of the person asking the question. The difficulty of this question was that a lot of people had an interest in it and she believed the interest of the party concerned went beyond normal ethical practice.
The SABC’s decision, which had been ratified by the board, not to proceed with Atos, angered a lot of people that SABC management now believed had an unethical interest in the matter.
The bottom line was: When Atos did its due diligence of the company to find out what it needed to do, it came up with four thick folders of information. When SABC management went through the information meticulously, it discovered that the bulk of the work had already been done. This suggested that the Atos people probably did not walk through the SABC to see what was and what was not there. According to their calculations, the total value of the work that still needed to be done, was R500m. According to a slide in its presentation the previous day, the remaining work amounted to just over R100m. This related to work in the post-installation aspects of the work Siemens did. She was very worried about that.
One of the statements made was that the skill to do the work that Atos specialized in was not present in the SABC. To the contrary, she said, the SABC had people with incredible skills. SABC staff completed the work Siemens could not complete. It was because of SABC’s own technical people that the SABC could broadcast a digital signal out of its studios. All that was needed was the digital platform, the DTT, and the people would see a much better picture. It was extremely frustrating for the SABC that there were people who would put their self-interest above everything else, to the extent that they attempted to abuse this Committee to drive their agenda.
To attest to the fact that Atos actually had no claim, it attempted to force the hand of the SABC’s authorities in government to force the SABC to proceed with an agreement which was non-existent. She wrote a letter to the SABC’s superiors in government to explain that there was no further work for Atos to do and if the SABC entered into a contract with Atos, she knew she would land in jail, because she would lead the organization into massive fruitless and wasteful expenditure. She knew it would be a difficult thing to do, but she wanted Members to pass the information and the names of the individuals on to her. As Group CEO of the SABC, she promised not to abuse the information. As CEO, she felt it was her responsibility to find out from the individuals concerned what the root cause of their assertions was. If there were gaps, the best way to address these gaps was through proper dialogue. If the organization was going wrong, it had to be pointed out to her so that she could understand and then deal with it. The current situation was untenable. It had a negative impact on progress. There were a few production studios still being worked on and the digital library had to be completed.
The SABC had not bought any Hitachi equipment. There was no Hitachi equipment in the SABC broadcasting and production studios. The fact that people lied about this was disconcerting. She reiterated her appeal to the Committee to furnish her with full details so that the matters could be addressed.
The Chairperson, Mr Kholwane, replied that he had been briefed by the acting chairperson, Mr Schneemann, that the Group CEO of the SABC had made statements alluding to the Committee being abused to forward the agendas of certain parties. He said on the contrary, this Committee had instructed the SABC to look at the Atos contract. All that followed was as a result of this instruction by the Committee. The Committee instructed the SABC to stop unnecessary contracts. When Members had information on pertinent issues, they normally forwarded it to the Chairperson’s office and the Committee formulated a response collectively, but he could not stop Members from raising issues directly in the Committee meetings on their own.
Ms Shinn asked if these allegations of self-interest had been proven or were they just rumours? What steps had been taken? Did Atos sign an agreement with the SABC on 30 September 2011? Was there any legal action pending from Atos against the SABC as a result of the way this contract had been handled?
Mr Lumko Mtimde, SABC board member, replied to that an agreement had been signed on 30 September which had expired. Currently there was no contract between SABC and Atos. Arising out of that agreement was the due diligence report that was presented to the SABC by Atos. The CEO explained what then transpired. After that point, the SABC could not continue the relationship with Atos.
On the question on self-interest and proving it, what the SABC was referring to, in the process of attending to this matter, was that the ethical question arose whether there was self-interest involved. Those remained questions. As the process unfolded, the SABC would come to a determination on whether it was the case. On legal action, there had been correspondence to and fro between the SABC and Atos. At this stage no case had been opened against either party.
Atos had queried the merit of the decision of the SABC not to proceed with the relationship and had received an answer. The SABC was focused on getting ready for the process of digital migration. As the CEO had indicated, the SABC was ready to a large degree. The challenges and uncertainty that were mentioned, were regulatory and financial. He appreciated the Members’ input on the challenges, especially the financial one, and how they should be handled, and the Committee, Ministry and SABC had to work together to overcome them.
With the progressive vision the country had, and its investment in infrastructure, SA had to take on the priorities of a knowledge and information economy. DTT and broadband were priorities that would assist in bringing content so that the country would have both the infrastructure as well as content in order to sustain the country’s democracy. Working together, the parties mentioned would be able to build a case that would be acceptable to National Treasury, in order to go forward.
Ms Newhoudt-Druchen asked that her question on consumer contracts and consumer messages be answered. How did the SABC inform its audiences about digital migration? Was it working with SAPO or taking sole responsibility for informing consumers.
The CEO replied that the SABC had been collaborating very closely with the DoC on consumer education. The initial awareness campaign ran on all SABC platforms. The SABC was running a programme called ‘Nation at Work’, of which four episodes in the series were devoted to digital migration. The SABC would go out on a strong campaign as soon as there was finality on when the switch-on was going to happen. The campaign would span technical aspects, programming, what people could do with the user interface, how many platforms were going to go live and more. Based on the presentation of the previous day, the content advertising was well known. SABC would start with the three channels already in existence. These channels were already dealt with, but when the migration to digital happened, people would be educated on how to switch on and tune their sets.
Mr Steyn said he realised that there was a difference in shareholding between e.tv and the SABC. Would the SABC care to comment on whether they shared the same concerns as e.tv about the control of STBs.
Mr Mtimde replied to Mr Steyn by saying that an applicant and a respondent were needed in the matter he referred to. The SABC was part of the project map and was engaging with all the parties, ensuring that all challenges regarding DTT were resolved in the best interest of all parties.
Mr Steyn said he did not ask if the SABC was a respondent in the case. He simply asked if the SABC shared the concerns of e.tv about the control of STBs. He preferred that the SABC exercise its choice not to answer, rather than give a diplomatic answer.
Mr Mtimde replied that the project map was projected. It depicted all the role players in the value chain. When the SABC had concerns, it raised the concerns as part of the team and discussed them. The SABC even met with the team before coming to Parliament to talk about the possibility of having written down agreements on roles and responsibilities throughout the value chain. To the extent that the SABC had concerns, it raised them at these meetings and resolved them.
The Chairperson added: “No, the SABC does not share the concerns of e.tv”.
Ms Newhoudt-Druchen was pleased the TV program ‘Nation at Work’ was mentioned. It was not accessible to the hearing impaired. She had notified the Chairperson about this. It was a good programme and it needed to be accessible to all.
The Chairperson added that the fundamental question was: Which nation was the SABC addressing, if people with hearing and other challenges, which were part of the ‘nation at work’, could not access it. This matter of accessibility had been raised for a long time. The deaf community could not access the programme, because there were no enabling features that would make the programme accessible to them. The SABC did not need to respond immediately, but had to note and address it.
Mr Steyn said the Group CEO indicated that it required R150m for a news channel. When it was refused, the SABC made do with R20m. If National Treasury had agreed initially, it would have meant that R130m would have been spent inefficiently. In the light of that, the SABC had to look at everything through the same lens. Look at what you can get by with to make it possible.
The CEO said the original R150m was aimed at offering fresh news around the clock. The SABC did not want to loop news, because then it ceased to be news. The lack of funding made it impossible to have fresh news around the clock, but it had fresh news for the first 12 hours of the day and would have looped news during the second 12 hours. The programming included straight news and current affairs as well as archived content.
Sentech Presentation
Dr Setumo Mohapi , CEO, delivered the presentation which contained a DTT Migration Map which graphically depicted the different role players and how they related to each other. The current coverage was based on plans that were made in 2006. However, the DTT coverage still touched every province even though there was a skew towards urban areas. The provincial rollout programme moving forward would ensure that there was always a balance between rural and urban areas. By the end of November 2012, an additional eight sites would be completed adding an additional 2.02% in population coverage to 63% and geographic coverage to 25%.
Sentech had engaged with its customers on the DTT roll-out and how it would impact on their footprints. All SABC channels would be transmitted from the same sites, with varying degrees of increases in both population and geographic coverage. The coverage requirements for e.tv and MNET remained a technical and financial challenge for Sentech.
Sentech’s tariff model was based on the consideration of a number of factors, including but not limited to: - acceptance of the discretion that broadcasters retain on the elements of the Sentech network they may choose to use; - shared assets and operating costs; and - costs that vary depending on multiplexor allocations and coverage areas. The tariff model was based on re-valuation of assets and consideration of operating costs specific to DTT and service level agreement commitments. The tariff model had been shared with broadcasters and the regulator. On finalising the DDT tariff model, Sentech said it had completed its tariff model, generated draft tariffs and continued to engage broadcasters on the new tariff regime.
The amended Broadcast Digital Migration (BDM) Policy, provides that the STB must include a STB Control System to protect the investment by Government in the Subsidy Scheme;
• SANS 862 states that the main elements specified for security within the STB control function for government-subsidized STBS are:
- a secure over-the-air software and bootstrap loader;
- a mechanism to prevent STB decoders from functioning in non-RSA DTT networks;
- STB Control System that would enable mass messaging.
• SANS 862 also states that STB decoder manufacturers were responsible for the implementation of the security requirements specified by the Free-To-Air individual broadcasting service licensees in South Africa and for the proper configuration of the chipsets. In this regard, manufacturers could obtain the security requirements from the free-to-air individual broadcasting service licensees in South Africa or from their appointed agents (trusted third parties).
A directive from the Minister mandated Sentech to establish and operate the STB control system. Sentech understood that the scope of the directive did not necessarily include the STB User Interface (UI) and the Subscriber Management System (SMS) operations other than that for STB control operations. Further, Sentech’s current understanding was that this mandate was limited to Government-subsidized STBs;
In this regard, Sentech had already started with the upgrade of its existing conditional access system (CA) to cater for the needs of some basic DTT functions such as distribution linking and the DTH gap filler system. A subset of this system would also be used for the STB control function for Government-subsidized STBs. This design would meet the minimum requirements of the broadcasting digital migration (BDM) policy, when read in conjunction with SANS 862.
Currently various disputed issues around the STB control function, including but not limited to, its definition, applicability and ownership and control, had been brought to the South Gauteng High Court for resolution
Sentech had been asked by the DTT Project Office to assist in the establishment of a Contact Centre that would provide citizen support on all matters technical, including but not limited to signal reception and the general increased technical complexity of the home environment. The development of this Contact Centre was currently in planning phase, but would be operational at the start of commercial DTT services. Some of the key considerations that Sentech was taking into account in modelling the Contact Centre were:
• Only 4 million of 12 million TV owning households were used to the complex home environment that would come with digital terrestrial television;
• The remaining 8 million households would need support as they get used to the increased technical complexity in their homes;
In its MTEF 2012 – 2015 Corporate Plan, Sentech submitted that the Analogue Switch-Off (ASO) date of June 2015 required Sentech accelerate Network Infrastructure rollout. In order to meet this deadline, Sentech would require all CAPEX funding for DTT to be allocated in the 2013/14 financial year to enable procurement of capital infrastructure. In the Corporate Plan, Sentech further submitted that in terms of the rollout plan and the planned regional ASOs, the company would require Dual-Illumination funding for the 2014 and 2015 financial years until national ASO. Additional funding of R207 million had been requested. Subsequently, National Treasury had approved Sentech’s request to retain interest earned on DTT CAPEX & OPEX funding. The total cost for the STB Control was R3.2 million. Accordingly, the STB Control CAPEX and OPEX for Year 1 were now fully funded. Sentech, however, submitted that there were additional costs associated with STB Control, and these would be provided for in the STB request for proposal (RFP) between the STB Control Vendor, STB Manufacturers and the Department of Communications.
The presentation further set out the roll-out plans for the 2012/13 FY.
Community broadcasters allocated 10% capacity on Multiplexor (Mux) with only limited allocations having been made so far. Rural populations have not been catered for in local television (outside the programmes that may be generated by the public broadcaster);
With respect to cost recovery, Sentech was not in a position to recover the cost of the 10% Mux allocation in places where no such allocation had been made, from the incumbent broadcasters. As a result, Sentech had to carry the cost of the rather insufficient Mux allocation.
Sentech had made the following proposal in response to the DTT draft regulations: In regions where there were no community broadcasting services, Sentech was of the view that an allocation of the spare capacity should be assigned to any interested broadcaster at regional level (i.e. minimum provincial coverage) in the spirit of efficiency, fairness and enhancement of competition in the broadcasting industry.
Discussion
Ms Shinn said on Slide 35, the third bullet point 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 South Africa and for the proper configuration of the chipsets. In this regard, manufacturers could obtain the security requirements from the free-to-air individual broadcasting service licensees in South Africa or from their appointed agents (trusted third parties). Did this mean as new broadcasters emerged, the STBs would need to be reset every time?
The CEO replied that once the specifications had been finalised for manufacturers, it would be valid for any new manufacturer that would come into the system. Manufacturers were responsible for the security requirements in the box, but got the requirements from somewhere else. New features would be added to STBs through updates, not new STBs.
Ms Morutoa said Slide 16 stated that ‘…the multiplex would lie unused unless otherwise’. What did ‘otherwise’ mean? The Committee had to understand what it meant, because it was there to assist. The Committee had the same interest as the stakeholders.
The CEO replied that whether broadcasters or otherwise, whether they would allow other broadcasters to come on board.
The CEO replied to the ‘unless otherwise’ question by Ms Morutoa. The sentence meant unless otherwise allocated by the Regulator. Sentech had proposed that unused spectrum had to be allocated to additional community broadcasters in the short term.
The CEO replied that whether broadcasters or otherwise, whether they would allow other broadcasters to come on board.
Ms Shinn referred to Slide 55 where the presentation referred to spectrum not taken up by community broadcasters, which could be assigned to a regional broadcaster. Could this space be used by cell phone companies for local e-government roll-out programmes, or did it have to be a conventional broadcaster.
Mr Steyn said the unused spectrum was a premium commodity. One needed to find a way to prevent a situation where spectrum was allocated but not used. If it was allocated, it had to be paid for. The process hinged on regulation, the STBs and the tariffs. He urged the role players, especially DoC and ICASA, to reach finalisation on these matters. He appealed to the parties to work together to finalise these matters.
The CEO replied that unused spectrum use would be determined by the Regulator. The Frequency Plan was the guiding document. ICASA was dealing with it, consulting with the industry, including international bodies, for best practice. There was some intimation the previous day about the Y-Space. It was a similar concept, but not the same.
Mr Willie Curry, ICASA Councillor, replied that Sentech indicated that it made a proposal that the unused spectrum on Multiplex 1 had to be allocated to new community broadcasters in particular areas. This was something ICASA was considering and it would be finalised soon..
Ms Newhoudt-Druchen referred to Slide 41. She asked if the new aerial came with the STB or did it have to be bought separately? Would TVs bought 5-10 years ago require new STBs?
The Sentech CEO replied that sometimes aerials were not effective. The frequency plane affected the type of aerials used. Sentech was worried about the situation where many structures and environments that people lived in were not conducive to using outside aerials. This was why there was a strong focus on citizen support in this roll-out process, to find solutions to such practical problems. He believed the provincial roll-out plan would allow the stakeholders to focus on small geographical areas.
Regarding aerials, not everybody would need a new aerial. Many existing aerials should be able to work for DTT. If one had an old tv, it did not necessarily mean that one had to have a new aerial. The requirements for the new aerials would come from the new frequencies for DTT. It would also depend on the power of these frequencies on the transmission on DTT. Having said that, there would still be a huge number of people that would need new aerials. Sentech had provided some numbers, together with the industry, on this matter. The subsidy included STBs and aerials for people who needed aerials.
Ms Lesoma asked why Sentech had a positive response from National Treasury. She understood that it was as a result of the merit of Sentech’s Annual Report, but this was one project where there were different role players, so why would National Treasury fund one entity, but not another for its role in this important project.
Ms Killian thanked Sentech for the presentation and said the project plan instilled confidence. It was not necessarily happening, but there was control. If it was not happening, it was because of a lack of funds, or other challenges. She thought this aspect of sound management influenced National Treasury’s decisions to decline or agree to requests for funding.
Ms Killian asked what interventions could be made. How soon could it be made? Was it only financial matters inhibiting roll-out or was it also capacity in terms of the number of engineers? What impact would capital and operational expenditure have on the situation?
Ms Shinn asked if there was any indication that National Treasury would respond favorably to the application for R172m.
Ms Morutoa was worried about capital expenditure, but at least Treasury had shown interest. The budget for the Dual Illumination had not been finalised and was a risk as was stated on Slide 58.
The CEO replied that a formal response would come through the Budget Speech. At this stage there was no indication of what the possible outcome could be.
Mr Steyn said an amount was budgeted for STB maintenance costs. How many sets was the amount supposed to cover?
The CEO replied that the maintenance cost was geared at 5m STBs. The mandate was to physically protect the government subsidized STBs. The solution had nothing to do with broadcasting services, but worked on the box itself. If the mandate changed to all STB, the number and amount would change.
Ms Morutoa referred to Slide 58 where the presentation stated that the tariffs for community broadcasting would increase sharply.
The CEO replied that this was a difficult topic. Tariff issues needed to be finalized and one had to work with the Regulator to further optimize what had been done for community broadcasting on analogue and apply it to DTT. For example, Soweto TV was at one site but according to the new frequency plan, it would have to be at 10 sites. It could be tweaked to be at one site only, but that would be technically difficult. This meant that the potential audiences increased significantly, but it did not necessarily mean more revenue.
Ms Shinn referred to Slide 32 where the presentation discussed the possibility of e.tv and N-NET sharing facilities. This arrangement however might require regulatory interventions. She asked what the status of this was. Did it need new regulations or was there a way around that because regulations took a lot of time.
The CEO replied that Sentech had nothing to do with that arrangement. It depended on what happened between the two broadcasters.
Ms Killian asked what would attract people to buy STBs. She asked that the SABC make DTT attractive for the people, especially in the rural areas.
The CEO replied that if someone in an area did not have an STB, and the analogue signal was switched off, it became a public interest issue. It was probably not advisable to switch off. Government would like to see all the people in the province migrate before the signal gets switched off. Switch-off would happen per province. Content on the digital channels would be the key driver. The availability and logistics of the subsidy system had to work well. Interaction with the consumer and citizen awareness were very important.
Ms Morutoa asked what would happen to those people who would still be using the analogue signal at the point of switch-off. If this issue was not addressed, the DTT migration process would not be successful. The DoC especially had to focus on this area.
Mr Steyn asked what the risk was relating to finding and constructing new buildings. Was it funding?
Ms Lesoma said some risk could affect the roll-out of projects. What would happen if municipalities did not want to give Sentech access to sites?
The CEO replied that those were risks and Sentech had contingency plans in place to mitigate those risks. The risk was that the project would move to the next financial year.
Mr Steyn was feeling confident that Sentech was in the starting blocks ready to go when the gun fired. He referred to Slides 37 and 38. Coverage was 60% in March 2012 (instead of the projected 74%) while in November 2012 it was only 63%, which indicated that there had not been much progress since March.
The CEO replied that the roll-out had only started now. The first part of the year was spent on procurement and planning. This was the beginning stages of a rapid increase in deployment. The fourth quarter would be the most important quarter for this. The map on Slide 10 showed that Sentech had spent lots of time doing civil works, building and installing electrical networks. This basic work had been happening.
Ms Killian referred to Slides 31 and 32, dealing with coverage. The Chairperson said he did not want to hear about population coverage only but also geographical coverage. If one looked at the benefits of universal access to educational programmes and support for the education sector, she was concerned about the Northern Cape and Eastern Cape. According to the information presented, large areas would not be covered.
Mr Schneemann also wanted clarity on Slides 31 and 32. He did not understand the discrepancy in coverage between the different SABC channels as well as the analogue digital ratio.
The CEO explained that in the past, the approach was to maximise the incremental population coverage. Currently the approach was to finish the entire province, including the rural and urban areas. Gauteng had been completed first. The red on the maps showed the analogue coverage. Blue showed the digital coverage DTT in addition to the analogue coverage. DTT coverage was shown by red and blue combined.
In certain areas there were cases where the analogue signal was on low frequencies and the digital on high frequencies. There might be a loss of provincial coverage in such cases, but satellite would cover those.
Ms Lesoma referred to the map on Slide 26 showing 60% population coverage for the transmitter network. What benefits did the rural areas in particular get? The infrastructure investment was only concentrated in the affluent urban areas.
Mr Schneemann also referred to Slide 26. There was a skew towards urban areas for DTT coverage. We should not just be focusing on population coverage, but rather geographical coverage. Was Sentech sure that the whole of SA would be covered? Would it not consider Direct-To-Home (DTH) transmission to ensure that nobody missed out.
The CEO referred to Slide21 and said Sentech had changed the model to take away the skew, out of the roll-out plan. In Slide 22, the last block showed satellite coverage. The yellow areas had no terrestrial coverage. One would need a satellite dish to have access in those areas. Yes, everybody would be able to receive radio and TV signals. This guaranteed 100% access geographically. DTH was in the plan, via satellite.
The CEO replied that on Slide 15, the 1st column showed what Sentech planned do for this FY and the 2nd column showed the total number of sites per province and those would be covered in the next financial year.
Mr Schneemann asked if there was a national coverage plan.
The CEO had been asked before to have a Broadcast Master Plan, particularly for public broadcasting. It was something it was still working on. It had been challenged to work with ICASA and the public broadcaster to come up with a plan, particularly for public broadcasting for both radio and television.
There was a Frequency Plan for DTT and it provided coverage for public broadcasting. If DDT covered the bulk of the surface of the country and coverage in the remaining areas was provided by satellite, then government had a formal method now, supported by policy of providing universal access. The bigger question for public broadcasting services was how one made provision for the different languages in this environment. Not only was a Frequency Plan needed, but also a plan at concept level, defining the problems. This was still a work in progress.
The CEO added that the reason why Sentech said it was a regulatory issue, was if one looked at the policy and the draft regulations that came through, it said that broadcasters would have the same licence conditions as they migrated, which meant that M-Net and e.tv were not obliged to increase its coverage. If SABC2’s coverage would be maintained, SABC 1 and 3’s coverage would be increased at no additional cost. The key issue for the other broadcasters was that they had to be on new sites. This was the reason why it was a regulatory problem. He wanted to see how the regulations would deal with it.
The DDG ICT Policy & Strategy, Mr Themba Phiri, said the Government Communication and Information System (GCIS) was working on e-Government services that would be made available to people on the digital platform. Potentially 20 million households could have immediate access to this.
Ms Lesoma made a general comment for the state owned companies (SOCs) as well as the DDGs of the DoC. She advised them to make sure that there was a thorough citizen education campaign, otherwise communities could decide not to accept the change. If people found out that their TVs would be useless and they had to spend money to get the TV service they would not be happy, if they had not been prepared adequately. She did not get a clear feel of a marketing or education process .The change had technical and financial implications for ordinary citizens as well.
The Chairperson of the Board of ICASA, Dr Stephen Mncube, commended Sentech for doing a good job. Colleague Curry would provide answers. ICASA had a MOU with the Universal Service and Access Agency of South Africa (USAASA) in terms of education because the parties could not do it alone. ICASA would now go out and educate people about DTT.
Ms Morutoa asked what the role was of GCIS in educating people about DTT. She believed it had a responsibility as well.
Mr Schneemann referred to the delays caused by ICASA and said this situation demonstrated the fact that where one stakeholder delayed the process, it had a ripple effect on the others as well. The parties concerned needed to cooperate and work closely together. One entity could not be relaxed and cruising along, because their attitude had an effect on the business of another entity and of the whole process. Effective and clear communication was needed. This was not business as usual.
Ms Morutoa said the outstanding Regulations, which ICASA was responsible for had not been addressed the previous day when ICASA was in the hot seat. She asked ICASA to send a response. The Committee needed to understand how ICASA and DoC would address this risk.
The Sentech CEO replied that ICASA did confirm that the regulations were coming soon and that would remove that risk. The regulations would have been consulted on widely within the industry, with the result that any lawsuits against ICASA were highly unlikely. Everybody knew what the country was working towards.
Ms Killian asked how soon was soon.
The CEO explained that the regulation making process was a long process, and rightly so because it was shaping the industry in a way it had not been shaped since the birth of television. Whatever decisions were made now would affect the industry and the economy for many years to come. It was not a case of ICASA being slow. It had taken the industry time to finalise the regulations. Sentech would do its part in making sure the regulations were finalized ASAP.
Mr Willie Curry, ICASA Councillor, said ICASA had consulted with its lawyers and should be ready to table regulations at a conclusive meeting on 4 December 2012. Then the regulations would be published in the gazette. The final step in the regulation making process would be to present the regulations to council for approval, after which it would have to be gazetted.
The Chairperson said ICASA had to address the issue of interoperability.
Ms Marcia Socikwa, ICASA Councillor, said interoperability had been on ICASA’s radar screen since it started with the licensing of pay-TV. Then ICASA had a conundrum of five operators with five different STBs. ICASA had gained some insights from its work over the years. The reality was that, despite SA’s challenges, an interoperable STB was not aligned with developments elsewhere. Research established that it failed in Singapore. ICASA would conduct an inquiry to see what was feasible and there would be issues of cost. For a comprehensive answer, ICASA would have to consult with the industry.
Ms Lesoma referred to Slide 12 under the heading Macro Activities and asked if the tariffs referred to were the finalised DTT tariffs or Sentech’s own tariffs. She asked this question against the background of Slide 33 dealing with the Invested Cost Recovery Model (Tariff Principles and model). Flowing from this, how did Sentech charge the broadcasters who carried the community broadcasters? USAASA responded yesterday in terms of the limitations of the Act. How did they recover cost in terms of tariffs?
The CEO replied that Sentech had finalized the tariffs and there was a tariff model as shown on Slide 33, but there were questions being asked by industry and the tariff issue was subject to engagement.
Mr Curry said he had had a discussion with the Sentech CEO and they were on the same page about finding solutions to the tariff question.
The Chairperson asked when the tariffs would be gazetted.
Mr Curry said the tariffs were on a separate track.
The Chairperson said ICASA was the Regulator and had to be clear on issues like ’Must Carry’ and unused spectrum. These were regulatory matters and influenced DTT. Also price-capping needed to be clarified. He warned ICASA that he was sure that the next court battle would be about tariffs. If this happened, the whole process would have to be shelved until the court battle was over. Sentech was the player, but ICASA was the regulator.
Mr Pieter Grootes, ICASA General Manager: Markets and Competition Division, said the Regulator had a dual role as far as Sentech tariffs were concerned. Firstly it had to see that broadcasters pay a fair tariff to Sentech for signal distribution, and secondly it had to see that the financial viability of Sentech was enshrined, because the financial viability of Sentech would make DTT a success in the future. ICASA conducted an inquiry under Chapter 10 of the Electronic Communications Act. That process defined the effectiveness of competition in the provision of signal distribution services. The Regulator would soon release the findings of this enquiry and it was likely to indicate a review of Sentech’s tariffs towards a cost-oriented basis and this was something that Sentech had already committed to based on the fact that it was a state-owned entity and it was in the interest of the development of the country. The development of this cost orientated model must take into account the significant investment cost that Sentech had incurred in upgrading its network in order to provide these services across the country.
At the moment the view of ICASA was (and it was a view, not the final position) that an efficient pricing model was one where the tariff was based on the spectrum assigned to the licensee. This was spectrum assigned, not spectrum used. The model also had to take into account that, not only did Sentech have to upgrade its existing sites, it also had to build new sites. This meant, from a CAPEX point of view, the cost of providing the digital signal would increase. Cost drivers like electricity, wages, import duties as well as efficiencies in all these areas would also influence Sentech’s cost.
The Regulator would have to see that these environmental factors were managed efficiently, very much like NERSA was managing the price cap environment for Eskom, although that would be an extreme step. ICASA was not considering doing that at this stage.
The time frames would be draft regulations by the close of the financial year, with closure by June 2013. The draft regulations would be transparent on how Sentech’s cost was incurred, and if everybody understood how the cost was incurred, the outcome of the cost, was the price. It was about tariff transparency, rather than that the tariff was too high or too low.
Ms Morutoa said Sentech had shown that there was some light at the end of the tunnel. It was important that Treasury, ICASA and the DoC should deal with the challenges highlighted.
For the following questions there, were no direct answers
Ms Lesoma referred to Slide 10 depicting the DTT migration map, where some processes were on track, while others were ongoing and under higher levels of risk. If one was unable to mitigate the risk, what did it mean in terms of the progress of the project?
Ms Lesoma referred to Slide 41 and asked if it meant that she would need two aerials. Did she have to replace the aerial she had? What did it mean in practice especially in rural aerials and informal settlements where people could not put their aerials outside?
Ms Lesoma asked about the picture portrayed on Slide 41, whether the country was really technically ready for DTT migration. Was the delay only with the readiness of STBs, notwithstanding e.tv’s challenge to the department?
The Chairperson asked how many households owned TVs in the country. It was said that it was 11-12 million, but where did the figure come from and was it correct?
M-Net presentation
Ms Patricia van Rooyen, CEO: M-Net, said M-Net had last presented to the Portfolio Committee on DTT Readiness in September 2011. Its message then was that globally countries were moving to digital broadcasting and that the future was digital. Set-Top boxes (STBs) or digital converters were an interim step for analogue TVs to receive digital transmissions. Communication, cost of STB and new content would drive DTT take-up. After Analogue Switch-off (ASO) Analogue TVs with converters will gradually be phased out and replaced with Digital TVs (with integrated digital tuners).
South Africa was the first African country to commence DTT trials in 2001, but the rest of Africa had caught up and passed SA by. DTT had commercially launched in Uganda, Nigeria, Kenya, Tanzania, Rwanda, Zambia, Mozambique, Burundi and Namibia. 14 months later DTT had not launched in SA yet.
Background
M-Net did its first trial with Orbicom 11 years ago. Delays in launching DTT had a negative impact on its business. It lost money due to having to maintain ageing analogue networks. It also lost subscribers because it stopped the sale of analogue STBs as one knew they would become redundant. A positive aspect of the delay was the lessons learnt in its Soweto Trial (see document) of which one was how to effectively support the client base implementing a programme of community-based customer service representatives. It was also a job creation project. It had shared this information with the DoC.
Regulatory hurdles
Government had completed the following tasks: National Policy – BDM, Supportive Legislative Framework – ECA, Terrestrial Frequency Plan, Digital Standard Adoption – DVB-T2, Set Top Box standard, Digital Migration Project Office.
The following tasks were still outstanding: DTT Regulations, Channel Authorisation, STB Control (e.tv litigation), Conformance Regime, Dates for Dual Illumination Period, DTT Project Plan for ASO, Sentech Rate Card - correct pricing (see document for their significance).
Other challenges included:
▪ STB Manufacturer uncertainty which was delaying the commencement of manufacturing.
▪ Consumer uncertainty - No consumer campaign or Digital Certification Mark Scheme in place.
▪ Sentech tariffs were too high and ICASA had not formulated regulations on the matter yet.
In 2011, ICASA indicated it would proceed with Tariff Regulations. Delay in publishing these regulations meant any commercial DTT launch would be at risk. SABC, e.tv and M-Net had difficulty in concluding negotiations with Sentech on the DTT rate card as it appeared to be 3.8 times higher than what the costs should be on comparison of analogue and digital. This might also impact on e.tv and M-Net’s decision, in the absence of “reasonable tariffs”, about using Sentech as the signal distributor for Mux 2.
Digital Switchover Date
The planned starting date for digital migration was December 2013. M-Net, depending on the capacity allocated in DTT Regulations on MUX 2, intends offering:
▪ more TV channels at better quality than currently received on analogue;
▪ EPG with on-screen now-next information over seven days;
▪ Visually Impaired Audio service and Hard of Hearing subtitling for people with visual and audio impairments; and
▪ Basic Interactive features, at a later stage, using MHEG SA Profile engine.
The presentation contained the M-Net Project Plan outline, which plotted the projected timeline from the month in which ICASA publishes the Tariff Regulations until the DSO–date.
M-Net’s message to its subscribers
M-Net would notify its subscribers directly and through a communication campaign about migration from analogue to digital broadcasting and the need to acquire a DTT STB. Subscribers would be provided with a coverage map of the service and be provided with list of accredited DTT installers in their area. Subscribers would have to purchase digital STBs during the dual illumination period and potentially check to see if a new TV aerial is required before ASO. After ASO, subscribers would be notified of potential need to re-tune STB to accommodate the digital to digital migration
Conclusion
If the DTT Regulations were published, the Digital Channel Authorisation was fast tracked, the Minister published the dual illumination period, FTA channels could be received on all STBs (FTA/Pay) in the interest of a single STB per household, and the Sentech Rate Card was finalised, M-Net would be ready to launch.
Discussion
Ms Newhoudt-Drochen referred to the presentation under the heading ‘Keys for Success’ where it stated that M-Net was different from other broadcasters in that it must convince subscribers who have already bought an analogue STB, to pay for a second DTT Pay TV STB. The last time M-Net presented, it said that people who already had a decoder would not need a STB. What did that statement mean?
Mr Schneemann also asked whether one would need another STB for M-Net.
Ms Van Rooyen explained that M-Net was an analogue broadcaster and the decoder was an analogue box which was last sold to M-Net’s customers 10 years ago and was outdated. M-Net decoders differed from the STBs or decoders which were going to be used in the DTT migration. DSTV boxes/decoders were digital and DSTV subscribers did not have to buy any other box. Free-to-air and the M-Net subscriber base had to get STBs. The M-Net subscriber base had declined over the last 10 years, because they could not be serviced properly, as M-Net was waiting for this digital migration. The M-Net subscriber base was distinct from the DSTV subscriber base, which was much bigger and growing. M-Net would promote the digital box, at its launch. Its existing subscribers would have to go out and buy a new box and it would hopefully gain some new subscribers.
Ms Shinn asked whether the integrated digital TVs would be imported or locally made. She wanted an explanation for what they were exactly.
Ms Morutoa referred to Slide 5 in the presentation where it stated that the set-top boxes will also be phased out. No other presentation had mentioned this before and the public also had to be made aware of this. People needed something sustainable.
Ms Killian referred to Slide 10 in the presentation which dealt with the impact of the delay on M-Net’s business, and the SA consumer. It meant that people who had to replace TV sets, bought sets and STBs which would be outdated soon. The M-Net bouquet was very popular in low income areas. What would the impact be there? What business model was aimed at the poorer areas?
Mr Dave Hagen, Technical Director, M-Net, replied that in the old days, everybody had the Cathode Ray Tube (CRT) TV with screen aspect ratio 4:3. One would plug an aerial into it and scan the VHF and UHF bands and one would pick up SABC, e.tv, CTV etc. These sets had analogue receivers.
An IDTV was the same analogy as an analogue TV set. It was a digital flat-screen TV set, but most flat screens had no receiver in it. One could plug a computer into it, external decoder or a USB into it to see pictures on it. An IDTV integrated the decoder/receiver which converted the digital signal which was displayed on the screen. It had a built-in DBVT2 receiver in it. When switched on, it scanned all the digital frequencies, picked up all the multiplexes and all the channels within the multiplexes. IDTV was mainly available in DBVT1. DBVT2 was the new standard. All the big brands like Samsung, Hi-Sense, LG, Panasonic had DBVT2 IDTVs available. Some would be assembled here to cut down on import duties. It was costly, up to $200 a piece. The cost would be brought down if it was assembled here. 42 000 TVs were sold in SA every month. As the cost came down, more people would buy IDTVs.
Ms Shinn asked how long it took to get the trainees up to speed in M-Net’s Soweto Trial. What were the minimum requirements for selection and did the person have to be tech savvy? Were there any criteria and did age play a role?
Mr Schneemann asked where exactly the 24 000 projected jobs would be located, in the communities, or in the wards? The DoC could also answer this question.
Mr Hagen replied that the implementation of Customer Service representatives was something that came out of M-Net’s trial run in Soweto and was a recommendation from M-Net to the DoC, firstly, to create jobs, secondly, to make the DTT migration a success, and thirdly to sustain the system through which South Africans would receive digital TV.
A Customer Service representative would be a person who lived in the community, 25 years or older, male or female. They would receive one week’s training in human interaction and customer service skills. They had to be trustworthy and respect the people’s homes they visited to install the STB and aerial.
They had to have some technical skill at a basic level. They had to know how a remote control worked and how basic menu systems worked. If the installation did not work, they had to know how to escalate the problem or send the decoder back for repair.
It was a recommendation. It worked very well in the Soweto trial and it was the only way in which M-Net could support its participants in the trial. DTT roll-out would also happen in rural areas where people never had TV reception before, or never worked with remote controls before. In his opinion, derived from his experience, this was the only way to do it successfully. He had had a discussion with the Department of Rural Development and Land Reform. They were very interested. The customer service reps needed to be paid. He did not know how. They also needed a cell phone because they needed to be contactable. On the 4th December 2012 an E-Skills workshop would be held with the DoC.
Ms Lesoma commented that the customer service foot soldier system worked for M-Net and the DoC could draw from the lesson. She said SAPO had a role to play in the process.
Mr Steyn asked M-Net for a copy of their customer service representative programme in Soweto so that when the Portfolio Committee engaged the DoC on the matter, it would be able to guide the final decision in an acceptable direction.
Mr Schneemann asked who would pay the customer service reps’ salaries/stipends.
Mr Aynon Doyle, Regulatory Affairs, M-Net, replied that where M-Net was rolling out its DTT programme, this system of community-based customer service representatives would be used. M-Net would pay for its own programme. He could not comment on who would pay the representatives in the case of the 24 000 jobs that could potentially be created by the DTT rollout.
Ms Lesoma said she knew the first generation M-Net decoders used to be silver, but currently there was a black one. Would these function as STBs?
Ms van Rooyen replied that M-Net was one of many companies Multichoice owned. She could only speak for M-Net, but she knew that Multichoice upgraded its decoders from time to time, with the result there were a variety of models of different colours out in use by its subscribers
Ms Lesoma said in M-Net’s presentation it seemed as if it had an option not to use Sentech’s signal distribution network. If this was the case, why did government not pre-empt the other option. It created the potential for government’s intention to be undermined.
Ms Shinn referred to the fourth bullet point on slide 20which referred to the impact of Sentech’s high tariff rates. It stated that M-Net may be forced off Sentech to other options for transmission. What were the other options?
Mr Doyle replied that when the cost of the Sentech service was 3.8 times higher than it should be, and than what it was in other countries, one had to look at other options. e.tv and M-Net also had broadcasting signal distributor licences like Sentech and M-Net had started considering self-provisioning. The Electronic Broadcasting Act allowed every broadcaster to provide its own signal.
Sentech rolled out a transmitter network. This transmitter network or Mux2 would use a selection of frequencies. Those frequencies were not owned by Sentech. Those frequencies would be licensed to e.tv and M-Net. M-Net and e.tv could use another signal distributor. The factors to consider would be the cost and the time involved to set up a network. Sentech already had a network which was convenient, but self-provisioning was a fall-back position if agreement could not be reached on a more reasonable tariff. Sentech had to be transparent in terms of how it arrived at those figures. M-Net was still engaging with Sentech on the tariff.
Ms Lesoma said that while she appreciated the fact that M-Net was a well-oiled machine and was running smoothly, she could not detect any sympathy for the challenges government was struggling with in this process of realising the DTT migration. Why did M-Net not assist government in this process, or was government not open to listening to an organisation like M-Net.
Ms van Rooyen replied that M-Net tried its level best to work with all stakeholders. M-Net proposed four years before a hard switch-over, which would have cost M-Net a lot of money. It wanted the country to take only six months to convert to digital. If that happened, it would have handed back a digital dividend by now, three and a half years later. M-Net wanted the digital migration to happen and happen quickly and it worked with all the stakeholders concerned. Having said that, she wanted to put it on record that M-Net had sympathy for ICASA, because it had many stakeholders to consider. It had multiple rounds of consultations and had to take everybody’s opinions into account. Its role was a difficult one. Stakeholders needed to pull together and find solutions together as they were all interdependent as one could not progress without the other.
Mr Schneemann referred to the presentation under the heading ‘Keys for Success’, where the pace of migration was listed as a key to success. If people did not buy the STBs, the process would not work. Awareness campaigns were necessary to inform and educate people, because large numbers of people did not know about the DTT migration process. Whatever had happened up to this point was not enough.
Mr Calvo Mawela, Regulatory Affairs – Orbicom, replied that in M-Net’s interaction with the DoC, it emphasised the fact that communications would be one of the key aspects determining the success and smooth running of the roll-out process. M-Net proposed that communications needed to be centrally coordinated in order to send the same consistent message across all broadcasters. In the interactions between M-Net and the DoC, there had been an attempt to form a sub-committee that dealt with communications from time to time. M-Net had given input on some of the documents that had been drafted by the DoC on the matter. The DoC would be phasing in these communication fora in gradual manner. Some advertisements had been placed in the newspaper, but he hoped DoC would heed M-Net’s call to make sure communications were taken care of.
Mr Schneemann said there were community development workers (CDWs) in wards. CDWs and ward councillors could play a role in educating and informing communities. This was a programme of government and the more people that were involved, the faster the word would spread.
Ms van Rooyen thanked Mr Schneemann for the good advice for involving community development workers and councillors in the awareness campaign around the DTT migration.
Ms Morutoa referred to slide 20, which stated: ‘Delay in publishing these regulations means any commercial DTT launch would be at risk.’ What did this mean?
Mr Schneemann said as long as ICASA caused delays, the programme would not be able to move.
Ms Killian asked whether the M-Net Project Plan Outline on slide 25 implied that the period from the date the DSO was gazetted to the DSO Date could not be less than six months. This meant that, if the ICASA Regulations were published in December 2012 and gazetted in January 2013, a launch date of June 2013 would only be achieved. This meant that for every month of delay, the whole programme was pushed back another month.
Mr Schneemann said high-income earners moved over to pay-tv, and then refused to pay TV licences, because they said they did not watch SABC-TV. Should Multichoice not also require a TV licence before providing the service? Multichoice could get M-Net to collect the TV licence fees and pay it over to the SABC. He wanted M-Net’s views on this.
Ms Morutoa said Ms Killian had referred to low income earners with dishes. She knew, because she lived there, that everybody wanted a dish just for the idea of having a dish, but they did not continue paying for the service. Something had to be done. Somebody talked about TV licences. When they had a decoder they did not want to pay for a TV licence.
The Chairperson said the question was linked to the ‘Must Carry” rule of ICASA. He asked how relevant was what Mr Schneemann suggested, in the new environment. Should it not be a matter of a commercial arrangement between the relevant parties? There was a Regulator which was not clear in this regard. If one said ‘Pay TV must carry SABC’, what did it mean? There should have been another obligation on the SABC to meet pay-tv halfway. The reason the ‘Must Carry’ rule was put in, was because people had to have access to free-to-air-tv regardless of whether they only watched and only wanted to pay for pay-tv. His problem with this rule and the way it had been set out, was that there was no balance. The regulations as they stood put all the obligations on SABC. In the discussion the previous day, it came out that community TV could go to any broadcaster and negotiate to be carried on its infrastructure and he felt the SABC also had to have the option to negotiate a situation for itself where it could provide universal access to its channels for all within the boundaries of SA, and was adequately compensated for it. His question was whether M-Net was going to carry the 16 SABC channels free-to-air. These were issues ICASA had to enlighten the relevant parties on.
The Chairperson said ICASA had to explain the ‘Must Carry’ rule.
Ms van Rooyen replied she could only speak for M-Net, but there was somebody present in the meeting who was mandated to speak for Multichoice, with the permission of the Chairperson.
Ms Clarissa Mack, Multichoice group executive for regulatory and policy affairs, said the idea of Multichoice acting as a collection agent for TV licence fees had come up before. From DSTV‘s point of view, it would not like to function as a collections agent for licence fees. It meant that subscribers needed to divulge information to a third party. It was also not the core business of DSTV. Who would pay for the administration around the collection and channelling of the fees? It complicated matters. As a commercial venture, it did not want to act as a collecting agent for a state owned company. The obligation was where it belonged, with the individual to pay his TV licence fee.
The Chairperson said it was a regulatory matter, but the Regulator was silent on it. It could be dealt with by formulating a regulation on it. When there was a regulation, it would not matter what M-Net or Multichoice felt.
Mr Steyn said everybody agreed that content was king as far as subscription TV was concerned. He was not sure what was in M-Net’s business plan for the future, but he had an issue with the number of repeats it screened. If this situation was perpetuated, the business would not be as viable, going forward. The SABC and e.tv had also started copying the same pattern. Acquaintances and members of the public often raised this with him as a Member of the Portfolio Committee on Communications.
Ms van Rooyen replied that in the genre of movies, if M-Net were to book all the movies made in Hollywood in a year, it would not have enough movies for a year. Only 220 movies were made in Hollywood per year. The Channel broadcast 24 hours a day, 365 days a year. The average movie lasted two hours. To broadcast unique movies all the time would be logistically difficult.
In a multi-channel environment, people did not watch one channel vertically. They scrolled through the channels horizontally to see whether there was something on another channel they liked. If they had 20 channels, they had 20 choices. Repeat programming meant if one missed a movie or news bulletin on one channel, you could catch it again on another channel or in a later slot on the same channel. Statistics showed that, in a multi-channel environment, the uptake was extremely high, to show it again for other people’s convenience. If it was shown once only, and a person missed it, it would be gone. Broadcasters also had contractual agreements on the number of screenings of movies to factor in.
Ms Killian understood from the presentation that the awareness programme was important for M-Net. Viewers would have to be convinced. There had to be a strong consumer launch. To what extent could SA learn from its African neighbours? How long ago did they launch? How recent were the launches in Mozambique and Namibia?
Mr Hagen replied that in these countries digital migration was driven by commercial operators of Chinese, South African and African origin. It was not driven by government as was the case in SA. The commercial operator then did the awareness campaign as part of the business, which benefited the country, because by the time the government migrated to DTT, the public would already have the understanding of what it entailed.
Ms Morutoa asked whether it was fair then to compare SA to these other African countries.
The Chairperson replied, as he had said the previous day, that more than 2/3 of countries in Africa were beyond 2015 in their undertaking at the 2006 International Telecommunications Union (ITU) conference [where it was resolved that all countries of Europe, Africa, Middle East and the Islamic Republic of Iran should migrate from analogue to digital broadcasting services by 2015]. One could engage the question and ask whether the comparison was legitimate. The point was that these other countries were ahead in terms of their digital migration.
Ms Morutoa said she was told that the transmitter at New Canada Road gave the signal to the houses in Soweto. Was it a Sentech or M-Net transmitter? What was going to happen to it after the migration?
Mr Hagen replied that when the Committee visited the Soweto trial a year ago, it was running a network of transmitters consisting of Orbicom and Sentech transmitters. It was still the same. The people in Soweto received their signal from the Brixton Tower in Auckland Park from Sentech as well as from the JSM Tower in Hillbrow.
Ms Morutoa asked whether decoders were STBs and vice versa?
Mr Hagen replied that decoder, STB, converter, adapter all meant the same. SA should define one common word for it.
Ms Morutoa asked whether the DoC could explain why STBs were more expensive in SA than in other countries.
Ms Killian asked if any neighbouring countries would be late for the ITU 2015 date. What would be the implications if SA fell totally behind? She heard that there would be distortion and interference with the signals.
Mr Doyle replied that in the ITU GO6 there was a footnote and there were countries in that footnote which indicated that they would only migrate in 2020. 2015 was not a switch-off date; it was an end-of-protection date. If by 2015 a country had not migrated digitally, it would no longer be protected by interference from their neighbours, but that only impacted on them if their neighbours had digital TV. The SADC Region initially decided to switch analogue off by 2013, but had changed the date to 2015. It was critical as a region to coordinate around the analogue switch-off date. Failing that, the region would have to deal with interference issues.
The Chairperson noted that the delays in the DTT roll-out even threatened the sustainability of companies and caused harm. He thanked M-Net for its presentation.
Universal Service and Access Agency of South Africa (USAASA) presentation
Mr Thabo Makenete, Universal Service and Access Fund (USAF) and Broadcasting Manager, said USAASA’s mandate within the Broadcasting Digital Migration process was prescribed in Section 82(5) of the Electronic Communications Act (ECA). The Agency had to manage the USAF in accordance with provisions of Chapter 14 of the ECA. Cabinet approved funding from the USAF for subsidies to go to poor TV-owning households towards the cost of a Set-Top box (STB), antenna and installation. USAASA was required to manage the disbursement of subsidies to such households. STB Subsidy Programme Approvals were:
▪ 70% subsidy towards the cost of an STB per household for a total of 5m poor TV-owning households;
▪ 100% subsidy for costs of an antenna/dish and installation for such households;
▪ 100% subsidy for STB, dish and installation for all households within the SKA affected area.
Eligible households were those that met the following criteria:
The household had to own a functioning TV set, the applicant had to be a South African citizen and the combined household income had to be equal to or below R3 200. Households depending on a child support grant, old-age grant or a disability grant were automatically eligible. Households that were already covered by a Concessionary TV Licence were also eligible. Applicants had to prove their status in terms of each of the above criteria with the appropriate documentation when applying for the subsidy.
When an applicant had successfully applied for the subsidy, he had to pay his 30% contribution, receive his STB and aerial as well as an installation voucher. After the installer had installed the devices to the satisfaction of the client, the client would sign the voucher and hand it over to the installer. The installer would present the signed voucher to a SAPO branch, where it would be exchanged for payment.
USAASA had signed MOUs with DoC, SAPO and the SABC for each to perform its role in the STB roll-out. USAASA would manage the ordering of STBs from appointed manufacturers and payment of subsidies through SAPO, while SAPO would be managing the application and logistics processes. The DoC would manage the process of training and accreditation of installers, and the SABC would be crucial in the applications for TV licences (where required) and verification.
Relevant business rules have been defined, which had enabled SAPO to commence development of the system and database required to manage processes. SAPO also procured application form design and printing services and was preparing its warehouses to receive and distribute STBs. USAASA, the DoC, the SABC and SAPO were almost ready for the launch of the roll-out, and was prepared for the majority of possible eventualities.
Discussion
Mr A Steyn (DA) said according to the presentation one of the criteria for eligibility was that the beneficiary had to be in the possession of a functioning TV set and a concessionary TV licence. Was it both, or one or the other, or did USAASA assume that people had a TV if they had a TV licence.
Mr Makenete replied that USAASA and SAPO resolved to use the fact that people possessed valid TV licences as proof that they had a functioning TV at home. Other ways to determine this would be impractical and expensive.
Mr Makenete added that quite a number of households had no TV licence. There were situations where a son when buying his TV set would buy another TV for a mother or grandmother. He would then own the licence, but the mother/grandmother would be the beneficiary of the subsidy. USAASA and SAPO would have to work within the bounds of the law and a TV licence would be required to qualify for the subsidy.
A person would apply for the subsidy. SAPO would verify the information and a week later the person can collect his STB from the SAPO. The process had to be seamless. SAPO already did SASSA payouts, and that system worked well, which was a positive prediction for the STB roll-out. SAPO was in the process of developing the system.
Mr Steyn asked how many people currently qualified for a concessionary TV licence.
Mr Makenete replied that the last figure he received was between 800 000 and 900 000 households had concessionary TV licences. It may have changed.
Mr Steyn asked if the 30% contribution by the beneficiary could be paid off, or had to be paid once-off in full.
Mr Makenete replied that the 30% payable by the beneficiary emanated from policies approved by Cabinet. USAASA could thus only work within those frameworks.
Ms W Newhoudt-Druchen (ANC) asked who would be responsible for checking whether beneficiaries qualified: SAPO or USAASA?
Ms Sibonsile Mokobi, Chief Director: Shareholder Management, DoC and USAASA board chairperson, replied that SAPO would handle the qualifications process. SAPO had enough outlets. USAASA had a Service Level Agreement with SAPO to ensure that the applications were handled correctly by SAPO.
Ms M Shinn (DA) asked where in the process the eligibility criteria were assessed.
Mr Makenete replied that USAASA had met with the DoC and made its recommendations on the qualifying criteria. The criteria had been assessed by the DoC legal team and the risks had been assessed. The next stage would be to gazette the qualifying criteria. The DoC would be in a better position to explain at what stage the gazetting process was.
Ms Shinn asked if applications via cell phone were possible and why an electronic application process was not opted for instead of a paper based one.
Mr Makenete replied that USAASA would look at the possibility of cell phone applications. The applications at post offices would happen on a paper application form, but the form asked for a cell phone number to contact the applicant regarding his application, so the process was at least in part electronic.
Ms Newhoudt-Druchen asked if one STB could be used with multiple TVs or whether each TV needed its own STB.
Mr Makenete replied that only one STB would be issued per household. In cases where many family units lived in one yard, the tenants would have to present a letter from the landlord that they were sub-letting. In rural areas where there were no addresses, the applicants would have to present letters from the traditional leader, or affidavits, confirmed by neighbours. A STB could only be used with one TV and each individual TV needed its own STB. This would be the case until new technology became available.
Mr G Schneemann (ANC) asked which information the 5m poor household estimate was based on. Did this number correspond with the numbers generated by the 2011 Census?
Mr Makenete replied that the 5m figure dated from 2008, when this process started. The Minister appointed a Digital Migration Working Group, whose brief had been to see how SA as a country would migrate from analogue broadcast technology to digital. The 5m households figure came out of that process and it went on to become policy. Since then the figures had changed. Currently there were 12m TV owning households. The 2011 Census showed the increase. Basic calculation put the number of possible beneficiaries of the subsidy at roughly 7m households. This figure had not been confirmed, as USAASA was still engaging with Stats SA on the matter.
Mr Schneemann asked why USAASA still used a figure from 2008. This showed that there was not proper communication amongst the partners in this process. Only now was the Committee told that the actual figure was closer to 7m.
The Chairperson said the 7m showed what happened to the cost of projects when they were delayed. He asked whether another memo had to be submitted to Cabinet to change the 5m to 7m.
Ms R Morutoa (ANC) asked what made SAPO suitable as the distributing agent for the STB roll-out. She asked how SAPO was going to detect whether people had paid their TV licence fee.
Ms Gontse Dlamini, USAASA board secretary, replied that SAPO was chosen for its reach into communities. USAASA was in a crisis but at the same time it could not let the project down. It anticipated that SAPO would be able to keep the process on track as close to the required timelines as possible. SAPO had dealt with large share schemes before and was the most suitable organisation to manage the STB roll-out.
Ms Mokobi said the decision to use SAPO was made when USAASA was at a standstill.
Mr Schneemann said SAPO, by its own admission, was short by 2000 outlets. USAASA could not ask for chances. When the money of the state was at stake, there was no time for chances. The Committee needed assurance that the STB roll-out would be successful.
Mr Steyn asked what role USAASA was playing in this process apart from being an intermediary in channelling funds to SAPO. Why could SAPO not be given the responsibility to do the roll-out of STB directly?
Ms Shinn asked how big the fund was which had to pay for the STBs and how many it had to pay for. The figure 5 million was mentioned. If the number of STBs were not enough, would the DoC apply for more funds?
The Chairperson said earlier in 2012 when USAASA presented to the Committee, there was a question about how many boxes would need to be procured. The number of boxes was arrived at without considering the cost of installation and aerials. The Committee had pointed out that these costs had to be taken into account and perhaps the total number of boxes would diminish if a set budget had to pay for everything inclusively. USAASA had replied that it was buying in bulk, and thus there was economy of scale.
Ms Dlamini replied that currently and until 2015, only R1.3b was available, while USAASA estimated that R2.5b would be needed for the projected 5m households. If 7m STBs had to be bought, at least R5.1b would be needed, so one was looking at a deficit of R3.5b. The DoC had applied for the deficit to National Treasury and would get a response in the near future.
Ms Shinn said she was sceptical before, but was horrified currently. The STBs, at R960 a piece would amount to R6.7b in total. This excluded soft services such as education, support, training. This was a horrendously over-complex cumbersome programme. The local assembly and support of the STBs was supposed to be a job-creation project. Looking at the cost one had to ask whether the cost was justified if it was going to create a few thousand temporary jobs. She suggested the whole process had to be re-assessed in terms of balancing cost and gains.
Mr Schneemann said USAASA’s presentation stated on the last page that the process was almost ready for launch. He did not get a sense of what the process was.
Mr Makenete replied that USAASA was working closely with SAPO on the process of the roll-out of the STBs. SAPO was acting as an agency through which applicants would apply, which would assess the application and distribute the boxes and aerials. The SAPO presentation would clarify the state of readiness of USAASA and SAPO to launch the process.
Mr Schneemann said USAASA did not seem to have a proper project plan in place. There were no time frames either. If there was no project plan, one needed to be put in place quickly. If there was one, the Committee needed a copy.
The following questions were answered collectively by Ms Mokobi:
Mr Steyn said the public awareness campaign had to start with the government institutions driving it displaying the logo on their communications. This would add to community awareness. The logo was nowhere to be seen on the USAASA presentation.
Ms R Lesoma (ANC) asked what guarantees the country had that USAASA would actually do what it was supposed to do in this process, as opposed to previously, when it failed in its duties. What USAASA would be managing in this roll-out process, apart from the transfer of payments?
Mr Schneemann expressed scepticism about USAASA’s ability to fulfil its role in the STB roll-out. He was sceptical because USAASA had failed to effectively run Tele-centres. On an oversight visit, a USAASA official was quite happy to take Committee members to a Tele-centre, only to be surprised by the fact that the Tele-centre had been closed down and was deserted. Government could not afford failure again.
Ms Morutoa said she also questioned the competence of USAASA to fulfil its role in the process of the STB-roll-out. Was USAASA a valid vehicle to use? She wanted an answer from the DoC.
Ms Lesoma asked if people and circumstances in informal settlements were taken into account in this process. When would installer training start?
Mr Steyn asked what processes were in place to minimise corruption and what prevented beneficiaries from selling off their STBs when they needed money. What “eventualities” did the presentation refer to, which USAASA was ready for? It appeared to him that USAASA did not think through the possible risks in the process, or how to minimise them.
Ms Newhoudt-Druchen asked why the installer could not bring the STB and aerial as opposed to the beneficiary carrying it home from the post office.
Mr Makenete replied that the STB and aerial would be small enough to carry. The aerial was not much bigger than the STB, which was not big.
Ms Newhoudt-Druchen asked if the citizen would have to pay an extra amount for the installation service, separate from the amount he paid for acquiring the STB and aerial.
Mr Schneemann asked where, according to Stats SA, would the bulk of demand be?
Ms Sibonsile Mokobi, Chief Director: Shareholder Management, DoC and USAASA board chairperson, said she wished she could definitely say that USAASA would deliver, but a lot of investigations had been done to determine where things went wrong regarding service delivery, and whether irregularities occurred. She wanted to separate the irregularities from the delivery that had to take place.
From this point onward, the organisation would craft the way it wanted to be seen, delivering on its mandate. It would soon report back to the Committee, where its roll-out plan would be interrogated. The Board of USAASA was well aware of its challenges and undertakings, and it supported the organisation and took responsibility for it. She took responsibility for the missing project plan and the fact that the presentation did not spell out the possible risks in the process, but nevertheless asked for an opportunity for USAASA to prove itself.
Ms Mokobi said USAASA appreciated the comments from Members regarding the gaps in its plans, such as the lack of an awareness campaign and the importance of the display of the campaign logo on all its communications, the possibility of an electronic application process, risks in the process and whether it was the best option to let people carry the STB and aerial away from SAPO outlets.
She understood from the feedback that there were four areas USAASA had to report on to the Committee:. the risks, the detail and motivation for the funding changing from 5m to 7m beneficiaries, plotting of where households were versus where SAPO outlets were located and what then would be the fall-back position.
Ms Lesoma questioned the absence and silence of the DoC in this whole process. The DoC had to be the main coordinator in the process. Yet, the previous day when she asked exactly who the project leader of this project was, there was no reply from the DoC. She was still waiting for an answer.
Ms Lesoma reiterated that she was not comfortable with the role of the DoC being downplayed in the readiness of its subsidiaries for the roll-out of STBs. She still demanded that the DoC itself report to Parliament on its readiness. It was imperative that the DoC assisted its entities with their programmes.
The Chairperson said the DoC noted the comments from the Members.
South African Post Office (SAPO) presentation
Mr Nhlamulo Ndhlela, Chairperson: ICT Subcommittee of the SAPO Board, SAPO led the delegation. The presentation contained project maps of the DTT migration process as managed by the DoC, and the roles of the different players, including the DoC, USAASA, SAPO, STB manufactures and installers (see document).
It outlined the background against which the STB roll-out would happen. It stated that:
▪ SAPO had been appointed by the Department of Communications and USAASA to assist with the distribution, delivery and installation process of the STBs to get the signal to needy households.
▪ The introduction meeting took place at Senior Executive level by SAPO with the DoC and USAASA on 17 January 2012 and since then the process had been planned.
▪ The following projected numbers and dates were indicated for the planned STB rollout by the DoC/USAASA during the meetings held to date:
- Projected number of needy households: 5 000 000
- The following two types of decoders will be installed: DTT decoder with standard grid antenna – Projected number 3.5m; DTH decoder with satellite dish – Projected number 1.5m.
▪ The rollout will take place in a phased-in manner per province and SAPO will prepare distribution plan.
▪ A high level process flow working document for the Set-Top box distribution had been designed covering qualifying criteria to installation as well as the replacement of faulty devices (see presentation).
▪ Against the background of the discussions on the high level process flow document, the parties agreed in principle that the main obligations of the DoC/USAASA and the Post Office will be included in the MOU:
The DoC shall in conjunction with USAASA:
1 finalise the qualification criteria and business rules for the rendering of the Services by the Post Office as part of the Service Level Agreement;
2 ensure that all materials and services relevant to the STB will be provided to the Post Office on consignment in line with the terms and conditions to be agreed to in the Service Level Agreement; and
3 be responsible to pay to the Post Office the agreed remuneration for the rendering of the Services.
The duties and obligations of SAPO in the process were outlined from the application process to the replacement of faulty equipment (see presentation). The MOU was signed-off on 26 July 2012. A Service Level Agreement (SLA) with final commercial details based on the agreed upon processes will be completed.
After the sign-off of the MOU, the SAPO Business Rules workshop was held with the DoC, USAASA and SABC to discuss and formulate the SAPO Business Rules working document for the Set-Top box project covering everything SAPO had to do to prepare for the project, such as the setting up of the qualification database on behalf of USAASA, and the mapping of the SAPO branch network with radio stations, satellite areas, type of signal and location of needy households per municipality area to determine the number of needy households, number and type of STBs and marketing material to be distributed per post office outlet, to the order and distribution process for STB boxes and related equipment to the transfer of collected funds to USAASA and SABC.
The Process Flow Document was updated and aligned with the outcome of the discussions held at the SAPO Business Rules workshop.
The SABC informed the Post Office that the following Television Licence requirements would apply for the needy households:
▪ When taking out a licence for the first time, the full annual tariff was payable (i.e. R250).
▪ Where a person qualifies for a concessionary TV licence, the current licence fee is payable.
In accordance with TV Licence Regulations, the following persons will qualify for a concessionary TV licence:
▪ A receiver of a social grant from the State, on the basis of being an aged or disabled person as defined in the Social Assistance Act of 1992;
▪ A person of 70 years or older, as from the beginning of the first licence year after turning 70, provided that such person does not share residential premises with anyone (other than a spouse or life partner) who is younger than 70 and who is not a family member of the holder of a domestic licence.
▪ The person will have to apply to the SABC for a concessionary TV licence.
SAPO currently provides for the processing of normal TV licences (i.e. applications and renewals) plus the renewal of existing concessionary TV licences through its third party payment system at SAPO outlets.
The presentation ended with a table showing the progress on each step in the implementation process. The early preparatory steps were all completed, but the subsequent steps leading to actual implementation were all still in progress. Training had been scheduled for 25 September 2012, and the start of implementation was 5 November 2012. It was 28 November 2012 and the implementation process was still under discussion.
Discussion
Mr Schneemann pointed out the contradictions between the USAASA presentation and the SAPO one. The USAASA presentation stated that USAASA managed the ordering of the STBs, while in SAPO presentation, it stated that SAPO would manage the ordering of the STBs.
The Chairperson asked SAPO if it could do without USAASA. Did SAPO need USAASA for the data? USAASA clearly had other challenges. He needed to know if SAPO could do without USAASA so it could be freed from all the responsibility except the funding. It could then focus on its other responsibilities.
Ms Morutoa said it was clear that better communication was needed amongst the parties collaborating on this project. The parties were working in silos, and not cooperatively.
Mr Schneemann asked if SAPO would not work more efficiently if it just took over the process, instead of doing everything on behalf of USAASA and having to report to back USAASA. USAASA would then need a smaller team. It could also then concentrate on its normal work and turnaround strategy. The chairpersons of the entities also had to communicate more.
Ms Killian agreed with Mr Schneemann and asked if SAPO would not perform better if it did not have to act as an agency for USAASA. She was scared the roll-out plan could collapse if SAPO relied on USAASA to map out the SAPO outlets versus beneficiary households.
Mr Steyn asked if SAPO could not act as a retailer of STBs to people who did not qualify for a subsidy. It was uniquely positioned in the sense that its brand was already known in the communities; it had a nationwide footprint and had experience with other similar campaigns. It was uniquely placed to do it, and it could generate extra income for SAPO.
Ms Lancaster said SAPO collected the 30% from the beneficiary and paid it over to USAASA. USAASA then paid the manufacturer. SAPO did not manage the relationship with the manufacturer, as it did not fall within the ambit of its strengths and capabilities.
Mr Bandlela replied that SAPO would collaborate with USAASA and try to understand what USAASA would like the SAPO to help it with. There were instances where USAASA could help SAPO. He noted the concerns of the Committee and agreed that there was a need to improve on the collaboration between SAPO and USAASA.
Ms Killian asked how the geographical mapping of beneficiary households would happen, if USAASA failed to come up with the information.
Ms Shinn asked if USAASA and SAPO would liaise with Sentech in order to synchronise the roll-out of STBs with the roll-out of the signal in terms of geographical location.
Mr Chris HHlekane, SAPO CEO, admitted that if the parties concerned had looked at the roll-out process slightly differently, it would have realised that volume would drive demand and distribution of the 5m -7m STBs. If SAPO had a pre-model, which quantitatively indicated where the demand was, it would be one step closer to the reality. SAPO delivered mail all over SA and it could map the demand for STBs, using its data generated by the mail delivery programme. He admitted that SAPO did not think about the associated costs and needed to evaluate these. The security SAPO already had probably needed to be enhanced.
Ms Lancaster added that the mapping of the demand was 50% completed. The database had been built. USAASA and SAPO met every Friday. The parties had to finalise the numbers to generate the data.
Ms Lesoma asked if a call centre was going to be used to address consumers’ questions, was there already a call centre in existence, or would one be set up especially for the DTT roll-out process?
Ms Lancaster said the call centre referred to was an internal call centre, which would handle queries which came from post offices. These calls would come from post office staff when the client/beneficiary was in the post office. It was not a call centre which beneficiaries could call into.
Ms Lesoma was from the Eastern Cape and she knew there were post offices there and elsewhere which were not digitally networked. How would the distribution work from these post offices, as the distribution system relied on the SAPO digital network?
Ms Morutoa said while most post offices in urban areas were adequately resourced, she was also aware of post offices which she had seen on oversight visits, which were not. She asked if SAPO thought it would be able to handle the STB roll-out.
Ms Lesoma feared that the digital network infrastructure would not be installed in time in the currently non-networked SAPO outlets for the DTT roll-out. The staff would also need to be up-skilled to work the system.
Mr Bandlela replied that SAPO was embarking on a network upgrade and by the time of DTT roll-out, all post offices would be online. The project was on track.
Mr Hlekane said it was a legitimate concern of the Chairperson to want to understand the implications for the roll-out of DTT if the 800 post offices that currently were not digitally connected, were not connected in time.
The Chairperson said no risks had been identified and no mitigation strategies were part of the plan. He asked how SAPO planned to mitigate the risks involved in this project.
Ms Shinn said the stock of STBs at warehouses and post offices would be a valuable target to criminals. Did SAPO consider organising any extra security at its outlets and warehouses? Were these extra costs of security and insurance taken into account?
Ms Lesoma asked what would happen if a STB was stolen. Would the wrongful owner be able to use it?
Ms Lancaster replied that security risk centred on three areas namely the warehouses, vehicles and post offices. At the warehouses, additional storage facilities were being prepared and at warehouses and post offices, additional security was being implemented. Vehicles were being fitted with tracking devices.
The process of distribution would be as follows: Post offices would place orders with USAASA and USAASA would place the order with the manufacturer. The manufacturer would deliver to the warehouses on a weekly basis. The boxes would come with a built in unique serial number and these numbers would be barcoded as well. On arrival at the warehouses the boxes would be scanned onto the SAPO system, as part of the track-and-trace system. The individual STBs would be tracked in terms of the vehicle which transported them as well as the particular post office they were taken to. If a device was stolen, the serial number would be identified and that device would be cancelled off the system. It would need a serial number in order to be activated. If a device were stolen, it would be useless. The design of the system would make it impossible to use stolen STBs.
Mr Hlekane replied that he did not believe the best option would be to store the STB at the point of distribution. It planned to concentrate the risk at the warehouses. Further risk would then centre around transition, being transported and at the point of sale.
Ms Lancaster added that SAPO had developed a complete risk register and had litigation action to every risk that it had identified thus far. It would share the risk register with the Committee at a later stage.
The Chairperson asked that SAPO forwarded its risk mitigating plan.
Ms Morutoa asked how people were going to be contacted if they had no cell phones or landlines.
Ms Lancaster replied that it was not first-time information that would be given to the applicant via cell phone, but it was a repeat and a confirmation. Also, when SAPO had done the BBBEE Share scheme and it had tracked cell phones of the applicants, it found that less than 1% of applicants did not have a cell phone.
Ms Killian said only 25% of installers on training was a concern.
Mr Hlekane replied it would be wise to do the training as close to the date of the start of roll-out as possible so that information would be fresh in the minds of the installers.
Ms Lesoma said, regarding human capital, computer systems spoke English. Would staff be trained in the 11 official languages in order to explain to people in their own languages how the STB worked?
Mr Hlekane replied that currently SAPO staff were utilised at an average rate of 75% throughout the day, which meant that in terms of service staff time, it had the capacity to do the STB roll-out.
Ms Lancaster added that this project was so important to SAPO that it had a dedicated Project Manager and a team for the DTT project.
Ms Lesoma said the DoC, as administrator, had to ask itself if it was honest with the Committee in terms of the limitations that it had. It had to assess if it was ready for the roll-out of STBs. This was apart from the financial limitations that were mentioned. She did not want to deal with the financial administrative course. The DoC needed to deal with it on behalf of the entities.
Ms Morutoa noted that the DoC had to be more hands-on regarding this project.
National Electronic Media Institute of South Africa (Nemisa) presentation
Dr Harold Wesso, Acting CEO of the Merake E-Skills Institute and ex-Deputy Director General of ICT Policy Development in the DoC, noted the pressing need for ICT development in SA in order to develop the economy through the creative industries. The University of Pretoria was in the process of developing a post-graduate diploma in ‘Entrepreneurship and Creative Industries’ under the Faculty of Economics and Management Sciences at NQF Level 7.
The presentation focussed specifically on training installers for the DTT roll-out process. The training would happen in three phases of which the first would be the up-skilling of existing DSTV installers. There were more than 1500 of them and they would be trained to do the DTT installations, which did not differ much from DSTV installations. The second phase would involve the training of Community Support Representatives. Experience was derived from the M-Net test DTT installations in Soweto where it was recognised that people with DTT installation prefer to have a local community person assist them when they had problems with the installation. The most important skills were soft community support skills. The third phase would involve the training of new installers. This group would consist of newly trained installers with both DTSV and DTT technical installation capabilities.
The learners/new installers would have to be selected and managed and the finance for the programme needed to be secured. This was an opportunity for multi-stakeholder collaboration involving representatives from business, education, government, civil society and organised labour. The idea was that the training for this project would not happen in isolation, but would be the start of a learning pathway i.e. from digital migration to digitisation, leading to a formal qualification. The target was 100% installation success first time round. The training programme would have to be subject to monitoring and evaluation to determine its strengths and weaknesses.
Discussion
Ms Shinn assumed prospective installers were employed and their employers would pay for the up-skilling. How would they be identified? Would they have to display some technical aptitude? What criteria would be used to select them?
Dr Wesso replied that installers were not all employed. Some were employed and some had small businesses. Nemisa would ensure that it trained and skilled the right people that would add value.
Ms Shinn asked if there were enough trainers in the different language groups.
Dr Wesso replied that the immediate phase would be to train the trainer. It needed the data from SAPO and USAASA. It also needed to train Community Development Workers in communities.
The DoC had to decide: Do we put energy and budget into call centres or into people in communities? These options would require different training models. M-Net had a programme Nemisa could piggy-back on. In the end, the training programme had to produce a technician who was able to install a Set-Top box and everything around it.
Dr Wesso added that, apart from the technical skills that community support agents would be taught, they would be taught soft skills such as customer care and communication skills in order to support STBs in communities. Call centres were good, but in this case were not the best option.
Ms Lesoma said the projected number of new jobs created could be incorrect, because currently employed DSTV installers were included as trainee STB installers, meaning the number of new jobs could be less. It seemed that the rural areas would only be accommodated in the third phase of training. This was based on the assumption that fewer people in the rural areas had TVs. People in the rural areas used batteries to power their TVs, if there was no electricity.
Dr Wesso replied that M-Net indicated, if one worked on the figure of 5m households, 24 000 sustainable jobs could be created. On the basis of that figure, one could project how many urban, rural and peri-urban jobs could be created.
Ms Shinn asked where the training would take place and how long the training period would be.
Dr Wesso replied that training would happen across the country. Everything could be covered in 4-5 days. The idea was that this training did not happen in isolation, but would form part of a series of training sessions leading to a technical qualification.
Ms Shinn asked what the training would cost and if National Treasury had approved the budget.
Mr Steyn said it appeared that funding for the training was still a problem. Was there a budget for training and how positive was the DoC’s attitude towards funding it?
Dr Wesso replied that the issue of funding ran through the entire programme delivery. Nemisa was dependent on the department for the final decision on budget. Nemisa had submitted a budget. The dependency on the DoC was a risk factor. It was moving towards a position where it would have its own resources. Currently it still depended on the DoC and believed the DoC would provide the funding.
Mr Steyn said he wanted to see a timeline in terms of tasks that the entities had to do.
Dr Wesso replied that the time line was important, but depended on inputs from the other state owned companies (SOCs). Nemisa was working on its plan, but needed information on funding as well as data to complete it. When it had its final meeting on 4 December 2012, it would be able to complete its plan. It would not start the training until it had finality on the date on which STB roll-out would start.
The meeting was adjourned.
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Audio
- PC Com: Sentech,M-NET,USAASA,SAPO & NEMISA on Digital Terrestrial Television migration state of readiness2
- PC Com: Sentech,M-NET,USAASA,SAPO & NEMISA on Digital Terrestrial Television migration state of readiness3
- PC Com: Sentech, M-NET, USAASA, SAPO & NEMISA on Digital Terrestrial Television migration state of readiness4
- PC Com: Sentech, M-NET, USAASA, SAPO & NEMISA on Digital Terrestrial Television migration state of readiness 3
- PC Com: Sentech,M-NET,USAASA,SAPO & NEMISA on Digital Terrestrial Television migration state of readiness4
- PC Com: Sentech,M-NET,USAASA,SAPO & NEMISA on Digital Terrestrial Television migration state of readiness1
- PC Com: Sentech, M-NET, USAASA, SAPO & NEMISA on Digital Terrestrial Television migration state of readiness 2
- PC Com: Sentech, M-NET, USAASA, SAPO & NEMISA on Digital Terrestrial Television migration state of readiness 1
- PC Com: Sentech, M-NET, USAASA, SAPO & NEMISA on Digital Terrestrial Television migration state of readiness 4
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