Presentation to Portfolio Committee USAASA BDM Project Presentation to Portfolio Committee

South African Digital TV System USAASA to subsidise DTH/DTT STBs and Antennae and their Installation

BDM Value Chain USAASA STB Subsidy Customer Contracts On - ground Support Installations Transmitter Network Wholesale Distribution Retail Contribution Linking Coding & Multiplexing Play out Radio Stations Interactive Content TV Channels Frequency Plan Channel Licensing DTT Regulations Platform Management Revise MHEG Profile Service Information for EPG Marketing FTA Brand Award STB RFP EPG User Interface DVB T2 Standard Approval STB Subsidy Revise STB Standard for STB Control System BDM Policy Consumer Messaging Manufacture STB’s Conformance Testing Trademark Certification Go Live All Broadcasters FTA Broadcasters ICASA All DTPS Direct Sentech USAASA SAPO SABS STB Manufacturers CPE Installers Retailers

Accredited Installers STB Value Chain Approved Household Get STB/Antenna USAASA Orders STBs/Antennae Manufacturing of STBs/Antennae Delivery to SAPO Warehouses Distribution to SAPO Branches Accredited Installers Fully Installed STB/Antenna

Role in BDM USAASA’s role in BDM, Pre-Launch Appointing STB/Antenna (subsidized) manufacturers, through an open tender process Determining the Qualifying Criteria Developing the process of subsidy applications and disbursements, in line with the Qualifying Criteria and other Policies Together with SAPO, managing the full rollout of subsidy management systems Appointment and training of installers (in partnership with FET Colleges) Determining STB order requirements and distribution thereof, using statistical information and subsidy application patterns Managing the ordering of STBs from approved manufacturers and distribution thereof to SAPO warehouses

Role in BDM (cont.) USAASA’s role in BDM, Post-Launch Exclusions Overseeing the application, distribution and installation value chain, as implemented through SAPO Managing the disbursement of funds to all parties involved Exclusions Public awareness Distribution of STBs from Post Offices to households (USAASA only limited to oversight) Maintenance and reverse logistics DTT call center The difference between approved 5.2 Million households and the current 6 142 046 million households (The revised Statistics SA GHS of 2013 ) which amounts to R1 782 686 797.48

Qualifying criteria Approved by National Treasury Proposal by USAASA Income Bracket DTT Subsidy DTT (Price per HH) DTH Subsidy DTH (Price per HH) R0 – R1 500 66% R238 (34%) 77% R242 (23%) R1 501 – R1 999 36% R448 (64%) 57% R452 (43%) R2 000 – R2 499 15% R525 (75%) 51% R515 (49%) R2 500 – R3 200 0% R700 (100%) 29% R746 (71%) Total No. of Households to be covered : 5 212 000 Proposal by USAASA Income bracket Subsidy Level Number of Households DTT DTH Percentage 0 – R1,500 100% (R0.00) 4 066 649 3 076 961 989 688 66%   R1, 5001 – R3200 70% (R210.00) 2 075 397 1 570 314 505 083 34% Total No. of Households 6 142 046 4 647 275 1 494 771 100% 12.8 Million TV owning households in South Africa 42.9 Million individuals have access to a working television

Revised qualifying criteria FINANCIAL IMPLICATIONS DTT HOUSEHOLDS 3 076 961 1 570 314 4 647 275 DTH HOUSEHOLDS 989 688 505 083 1 494 771 DTT COST PER HH 700.00 R 700.00 DTH COST PER HH R1 050.00 SUBSIDY 100% 70% DTT COST R 2 153 872 726.13 R 769 453 841.71 R 2 923 326 567.84 DTH COST R 1 039 172 360.81 R 371 236 032.44 R 1 410 408 393.24 TOTAL COST(100% Subsidy) R 3 193 045 086.94   TOTAL COST(70% Subsidy) R 1 140 689 874.15 TOTAL COST R 4 333 734 961.08 TOTAL BUDGETED R 2.39 billion SHORTFALL R 1 943 734 961.08

Project Deliverables * Processes to run concurrently Pre-Launch Tasks ** Period Statistical Data Acquisition and Mapping Done Subsidy Application Form Design and Printing (SAPO) Appointment of Manufacturers * 90 Days Develop (including Public Participation processes) Sliding Scale Qualifying Criteria and Subsidy Application Process * 60 Days USAASA/SAPO Service Level Agreement * 30 Days Post-Launch Tasks (On-going) Order STBs from appointed manufacturers Oversee subsidy application and approval processes Oversee distribution and installation of STBs in qualifying households Facilitate payments to: Approved manufacturers for fulfilment of STB + Antenna orders; and SAPO for reimbursement of installers * Processes to run concurrently

Internal Processes to Ensure Delivery Appoint an external service provider to evaluate bids in the appointment of STB and Antenna manufacturers Complete Appoint external audit firm to audit the evaluation - Complete Appoint an external service provider to assist in managing the overall implementation of the subsidy process Complete. Source funding for the procurement of SAP Awaiting National Treasury funding approval Publishing of Qualifying Criteria To be published on 26 September 2014 in Government Gazette

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