(L to R) Emmanuel Mngadi national co-ordinator and Keith Thabo Chairperson both from Namec with set top boxes, during an interview at JHB Gauteng. Photo: Leon Nicholas

Black business groups will lobby President Jacob Zuma next week for political intervention in the chaos between industry and the government over requirements for decoders to be used in the national digital television migration project.

The groups, which include the Black Business Council (BBC), the National African Federated Chamber of Commerce, the National Association of Manufacturers of Electronic Components (Namec) and the Foundation for African Business and Consumer Services, said yesterday that if left unattended, the matter would have costly long-term negative consequences for software and enterprise development.

The groups want the president to convene an interministerial team that will review the digital migration project and the associated costs.

The commercial roll-out of the project, which was originally scheduled to start this month, has already been delayed by a court case brought by e.tv against the Minister of Communications, Dina Pule, and others in September.

Last month Pule’s department told Parliament that the roll-out would commence between early and mid-2013.

Broadcaster e.tv is awaiting judgment in the court case.

At the heart of the dispute is the appointment of Sentech, the state-owned signal distributor, by Pule to manage the conditional access to the decoders.

Sentech is using a conditional access system supplied by Nagravision, which is a business of the Switzerland-based Kudelski Group.

Keith Thabo, the chairman of Namec, said that Pule was ill-advised about the benefits of using Nagravision on future job creation and enterprise development.

The business groups claim that they met with Nagravision about three months ago, during which meeting the Swiss company allegedly informed the manufacturers that it would charge a royalty fee of $43 (R374) a decoder that its system was inserted into.

In addition, any future software modifications would also attract a royalty fee.

The groups, which were unable to provide supporting data, said that calculations showed that manufacturers would incur a shortfall of R57 a decoder if the government permitted the use of only the Nagravision technology.

They want the government to allow the use of both Nagravision and an open standard conditional access system, which they claim will not attract royalty fees.

The groups claim that potential new software content developers will be dissuaded from entering the market if they constantly have to pay royalty fees to Nagravision.

Ziggi Zaman, a member of the BBC, said: “The very principle of this project was to support the broad-based black economic empowerment businesses… to participate in producing these decoders.”

Sibongile Dukashe, a member of the BBC, said bidders for the local manufacturing of the decoders only became aware of the requirement for manufacturers to be Nagravision compliant three weeks before the closing date for the request for proposals in September.

Dukashe said: “With the Treasury having a full view of these discussions it will not allow this project to go forward.”

The migration from analogue to digital broadcasting by June 17, 2015 is an international requirement.

Locally, the state will provide 70 percent-subsidised decoders to 5 million households. There are about 11 million homes with television sets in South Africa. The decoders convert digital broadcasts to analogue signals so that households can continue to use their older television sets.