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Black-owned businesses demand a larger slice of digital set-top box pie

09/09/2011 Roy Padayachie Minister of Communications during a media briefing in Sandton JHB. Photo: Leon Nicholas

09/09/2011 Roy Padayachie Minister of Communications during a media briefing in Sandton JHB. Photo: Leon Nicholas

Published Sep 12, 2011


Asha Speckman

THE National Association of Manufacturers in Electronic Components (Namec) was not convinced that small players would benefit substantially from the government’s digital migration project, the body representing black-owned electronics businesses said on Friday.

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Many businesses are hoping to make money from the migration by supplying set-top boxes, which the government will provide to an estimated 5 million homes that cannot afford the full price.

Set-top boxes receive the digital television signal from broadcasters into households.

Communications Minister Roy Padayachie said at a business breakfast hosted by The New Age newspaper on Friday that the set-top boxes would cost R700 each.

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Padayachie said the government would subsidise two-thirds of the price. Consumers would pay just under R250.

A set-top box manufacturing strategy crafted by his department was awaiting cabinet approval, while the SA Bureau of Standards had held several meetings to amend the standards for the manufacture of the devices. It would publish the draft standard for public comment “in the near future”.

Manufacturers would tender for the job early next year ahead of the roll-out of the digital terrestrial television signal starting in April.

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The government aimed to switch off the analogue broadcasting signal by 2013.

All countries must migrate to digital television by 2015.

Padayachie said there were currently four main set-top box manufacturers. The government wanted to double that by creating a consortium of eight companies “who will enter into a manufacturing industry partnership with government”.

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Smaller players, however, still felt sidelined.

Sicelo Mtsali, a researcher for Namec, said at the weekend: “The big players already have a large chunk of this. (For small manufacturers) I doubt it will be substantial unless we are very politically connected.”

Both Namec and the National African Federated Chamber of Commerce and Industry (Nafcoc) referred to JSE-listed technology firm Allied Technologies, which recently expanded its Durban decoder manufacturing plant and concluded an empowerment deal for that unit in anticipation of the government’s digital migration roll-out.

Padayachie was a keynote speaker at this event.

Mtsali said two years ago Namec, a group of 80 businesses, was given the opportunity to contribute to the set-top box strategy but received no response from the Communications Department.

“The minister relies too much on industry and not enough on engagement with civil society and emerging businessmen,” Mtsali said.

Namec’s members intended to bid for the manufacturing contracts. Mtsali said 60 percent of the contracts should be awarded to black business.

Lawrence Mavundla, the president of Nafcoc, which represents 150 000 businesses, has also been vocal about matters concerning equal participation of big and small business.

“I can tell you in the digital space black people are absolutely nowhere. Content is brought in either from overseas or through big business,” Mavundla said.

“We would like the government to call us to the table and say this is what the government is doing. We did participate in some of those forums (that the government held with 30 top telecoms and technology companies and small business) but they draft everything and go to these meetings as a lip service.

“As Nafcoc we are such a serious entity we shouldn’t be called to these forums, we should be called to the office of the minister.”

Mtsali, however, acknowledged that “we need to find more meaningful ways of engaging with big business”.

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