1. Digital Migration Briefing to Portfolio Committee on Communications by chair of Digital Dzonga 11 March 2008 Digital Dzonga

2. 2 Background  Lara Kantor appointed by Minister as chair of Digital Dzonga  Released from other duties by SABC in order to focus on Digital Migration  In absence of other Council members have developed proposals on Dzonga structure and functions and requirements for implementation plan Digital Dzonga

3. Digital Terrestrial Television System [Roof-top aerial] TV Digital Playout Centre Production of Digital Content or Digitisation of Analogue content STB Background (2) Digital Dzonga Transmitter

4. DTT changes the nature of television Technology features Multi-channel Better quality pictures and sound Route to HDTV Interactivity (with or without return path) Addressability PROS More channels allows consumers a greater choice Bouquets available for specific interests – greater customer differentiation Potential for better control of subscription, licence revenues Quality can be controlled per channel or per event to optimise resources CONS DTT requires distribution infrastructure, upgrades on transmitters, compression technology and STBs No signal in marginal areas Multichannel makes it harder to attract viewers to a given channel Complexity of decoders Background (3)

5. Signal Distribution and Transmission Content Production, Packaging and Programming Signal Reception and Devices  Transmitter Network rollout needs to be undertaken  Costs of signal distribution will rise  Transmission specifications need to be decided to determine, for instance, how many new channels will be available  Design of Electronic program guide (EPG) needs to be undertaken – may require co- operation of different broadcasters  STB specs to be developed which will determine what kind of services can be offered  Revenues and business models will be impacted: license fee collection, interactive service revenues DTT migration therefore requires the co- operation of multiple stakeholders – therefore a need for a “Digital Dzonga”  Broadcasters will need to digitize archives, studios, contribution and production networks  Broadcasters will need to develop and test new DTT channels DTT Impacts Free-to-Air Broadcasters’ Value Chain on Different Levels Background (4)

6. 6 Background (5)  Dzonga chair previously served as one of the DMWG chairs who facilitated the drafting of detailed recommendations on Digital Migration handed to the Minister in late 2006  The DMWG consisted of representatives from the broadcasting industry (including the SABC, community and commercial licensees and signal distributors), ICASA, government, civil society and organised labour  The concept of a Digital Dzonga has its roots in the DMWG proposals Digital Dzonga

7. 7 Recommendation by the DMWG, Nov 2006  “That government should establish a joint body with industry to develop an action plan for the switch-off of analogue television broadcasting, to monitor the switchover process and promote consumer awareness”. Digital Dzonga

8. 8 Why is there a need for the Digital Dzonga?  Scale and complexity of the project  Involvement of multiple stakeholders  Need for co-ordinated roll-out and switch-off  Need for strong, uniform communication to public Digital Dzonga

9. Upgrading vulnerable viewers Selling digital transition Digital Dzonga consistent with international best practice  DMOL (Digital Multiplex Operators Ltd): represents all multiplex operators  Operational oversight of all multiplexes  Manages new channel launches, channel numbering, technical upgrades, and definition of SI including EPG requirements  Liaises with transmission providers Managing technical platform  Help Scheme: contracted-out but overseen by the BBC with advisory government role  Tasked with subsidising/assisting severely disabled and over-75s with digital conversion  Cost: ~£600m 2008- 2012 (similar scheme in France would probably cost less than a third) and is responsibility of Digital UK-type body)  DTG: industry group representing all main digital TV players  Plays key role in setting standards for DTT (‘the D- Book), and therefore Freeview  Owns testing unit (‘DTG Testing’) which vendors use to test and (eventually) to gain certification of standards-compliance (e.g. the ‘Digital Tick’)b Defining Digital standards specification  ‘Digital UK’: Independent, platform- neutral, non-profit organization, owned by broadcasters and multiplex operators, with representation from the supply chain  Works closely with government  Tasked with co- ordinating switchover  Main task: communications (£200m spend between now and 2012) UK South African Digital Dzonga envisaged to provide a one-stop shop

10. Advisory Council Chair: Lara Kantor Members: Executive Director, Representatives from government, broadcasters, transmission companies, manufacturers and retailers, ICASA, consumer rights groups. Appointed by Minister, following nomination process DOC Admin Office (headed by Executive Director) Communications Working Group Carry out Strategic Planning Plan and Implement public education programmes about analogue switchoff Establish and drive a public information campaign on consumer issues and switchover Public consultation with representatives of consumer groups and other stakeholders Liaise with other departments and agencies to ensure consumers can identify/buy right kit Carry out marketing/PR/web Technology & Standards Working Group Define and ‘license’ SA ‘D-Book’, including set-top box specification, define IPR policy, rules for handling SI, EPG, OTA upgrades, etc Oversee hardware/software testing & compliance Administer digital logo Ensure STB accessibility Define and administer warranty and repairs policy Define and administer bug-handling and bug- fix policies Define and administer CA upgrade process and CA vendor relationship Define energy/waste policies Broadcast Infrastructure Working Group Transmitter rollout implementation and co-ordination Ensure TX QoS meets D-Book Implement EPG Group recommendations Administer OTA (upgrade) channel Creation of predictive covehgrage database Aerial standards and aerial group allocation Define community aerial/reception recommendations International frequency co- ordination Help & Support Working Group Viewer support (inc call centres/operators) Plan and implement measures for vulnerable groups, inc. subsidies Liaison with Technology & Standards Group over warranty, repairs, bugs, etc. Liaison with government departments re vulnerable households database Liaison with consumer groups re needs of vulnerable groups Liaison with communications working group re comms with vulnerable groups Research Working Group Report regularly on digital switchover progress Conduct research on impact of switchover process on industry Conduct market research re public awareness re switchover Prepare both internal and public domain reports for communications working group based on above Monitor international switchover progress Monitor digital TV market trends EPG Group Members: broadcasters Digital Dzonga Proposed Working groups

11. Digital Dzonga Proposed High Level Staffing Executive Director Chief Director: Technology Director: Technology and Standards Director: Broadcast Infrastructure Chief Director: Help and Support Director: Subsidies Director: Consumer liaison Chief Director: Communications and Research Director: Communications Director: Research Personal Assistant Admin Officer

12. 12 Steps to be taken in establishing Digital Dzonga Digital Dzonga By 1 AprilBy 1 MayBy 1 June Other advisory council members appointed Working groups constituted Budget finalised Implementation plan agreed Key staff recruited

13. 13 Key Priorities in the Implementation Plan Digital Dzonga 1. Set Top Box strategy 2. Consumer awareness

14. 14 1.Set Top Box strategy  STB take-up critical for success of DTT migration  Affordable STBs therefore very important - the more affordable the STB, the more households will be able to make the migration to DTT  But also need to ensure that the STB is “future-proof” and allows for applications broadcasters and government require e.g. e-government services Digital Dzonga

15. 15 In 2007 the number of households that could afford a decoder priced  At ZAR 500: 4.6m households  At ZAR 300: 5.1m households Median household income in SA (2006) The number of households that can afford a STB grows as there is a drop in price Median household income (ZAR/year) Source: ConsumerScope AMPS 2005, the Genesis Model *Affordability is estimated at 2.5% of annual household income Digital Dzonga Set Top Box strategy (2)

16. 16  STB price appears to be greatly influenced by two factors:  Technology choices on specs  Timing of STB roll-out  Need to ensure that informed decisions are made on both these issues  Price becomes critical in light of possible government subsidy Digital Dzonga Set Top Box strategy (3)

17. 17  MPEG 4 decoders will be expensive initially, but expected to fall in price 15% a year  Allowing time for mid and high income households to purchase their own decoders will minimize the cost of subsidising non-digital households Cost of starting subsidies 2008 Cost of starting subsidies 2010 Subsidize STBs 2008201020xx (Analogue Switch off) Cost savings from delaying subsidy The later the government starts subsidising set top boxes, the cheaper it will be Total Cost of Subsidies (Illustrative) The two reasons to wait are: (1) decoder prices will fall; and (2) higher income users can buy their own unsubsidised decoders as they adopt digital television Digital Dzonga Set Top Box strategy (4)

18. 18 Key milestones  Define and formalise specifications  Produce rules of operation – “D-Book”  Develop STB prototypes  Test and sign off proto-types  Select vendors  Specify conformance system  Define retail strategy  Define subsidy strategy  Manufacture  Fill supply chain Digital Dzonga Set Top Box strategy (5)

19. 19 2. Consumer awareness  Key function of Dzonga will be to roll-out communications campaign on migration  Since cabinet announcement on dates for migration there have already been confusing and negative messages in the media  Bad press could impact on success of migration Digital Dzonga

20. 20 Digital Dzonga

21. 21 2. Consumer awareness (2)  Dzonga will need to ensure clear, consistent communication on:  What digital migration means for ordinary people  Why it is of benefit  What people will need to do to migrate  When a digital signal will be available in specific areas  Likely cost  Impact on current TVs, aerials, VCRs already in the home  What to look for when buying new TVs, STBs etc  Where to go for assistance /further information Digital Dzonga

22. 22 US spending close to $700m, including “roadshows” and on-line campaign Digital Dzonga

23. 23 UK spending £200m Digital Dzonga

24. 24 2. Consumer awareness (3)  Dzonga will need to, with other stakeholders, develop consumer awareness campaign using variety of media:  Television, radio and print  Community radio  On-line  In-store, post-offices etc  Imbizos Digital Dzonga

25. 25 Other Key Areas in Implementation Digital Dzonga Signal DistributorsTransmitter roll-out in terms of approved frequency plan ICASALicensing and authorisation of current broadcasters to operate in digital and introduce new services BroadcastersDevelop new channels Work of these stakeholders will take place outside the Dzonga but will be critical in meeting timeframes for migration

26. 26 Conclusion  Digital migration an enormous and complex national project  Much work required of Dzonga to co-ordinate efforts of stakeholders and drive digital migration  Support of all stakeholders is required Digital Dzonga

27. 27 Thank you Digital Dzonga

28. 28 Back-up Digital Dzonga

29. PHASE 1 Yr 1 31 Stations 56% Coverage Initial STB roll- out PHASE 2 Yr 2 68 Stations 78% Coverage Initial subsidised STBS PHASE 1 Yr 3 85 Stations 92% Coverage Mass roll-out of Subsidised STBs 20072008 2009 2010 2011 Creation of DZONGA 50% DTT Coverage 85% DTT Coverage ELECTIONS 2010 WORLD CUP Analogue Switch-off 100% DTT coverage Info provided by Sentech Nov/08: DTT Switch-on