Nº 2 2015 > Special Report on the Digital Switchover
Digital switchover in Africa
Market conditions for digital terrestrial television in Africa vary. Some countries (for example, Nigeria) have high penetration rates of terrestrial television, while others (for example, Tanzania and Cameroon) have low penetration.
In large countries, where demand for terrestrial television is strong, digital switchover is a long and complex process. In such cases, it is important to involve stakeholders throughout the process, and to implement an information campaign promoting the availability of free-to-air digital terrestrial television. Ensuring that set-top boxes are available and affordable are also key factors in making sure that viewers are able to access the new services. The difficulty of the task may prevent some of these countries from meeting the 2015 deadline for analogue switch-off.
In Nigeria, involving stakeholders is helping to smooth the transition, making it possible to reduce the overall simulcast period — when digital and analogue free-to-air television signals are broadcast simultaneously — and decrease the associated costs. Also, the government has decided to subsidize set-top boxes in order to accelerate take-up.
In contrast, digital switchover can be implemented relatively quickly when the terrestrial television platform has more limited coverage and market share. The challenge is not so much in the management of the simulcast period or the switchover process, but rather in ensuring that the new digital terrestrial television platform is competitive and attractive against the other pay-television platforms in the country. The key success factor for digital terrestrial television in these cases is likely to be the richness of the content that the platform will offer, especially local content. An information campaign to promote the availability of free-to-air digital terrestrial television to viewers who may not currently use terrestrial television is also crucial for the digital switchover process. This needs to be backed by strong government action to support digital switchover where market interest may be insufficient to justify the transition to digital broadcasting.
The cases of Nigeria, Tanzania and Cameroon outlined below highlight the need for strong policy-led approaches to digital switchover, and the involvement of industry.
The Nigerian government estimates that some 40 million households own a television set in Nigeria, of which around 3.3 million are pay-television subscribers using satellite and digital satellite services. The majority of people in the country watch free-to-air analogue television, making it the country with the highest terrestrial television viewership in sub-Saharan Africa. Analogue television in Nigeria carries more than 40 channels. This contrasts with some other countries in Africa, where as few as one or two over-the-air analogue channels are broadcast. Thus the digital switchover process in Nigeria is one of the most challenging in the sub-Saharan region.
DigiTeam Nigeria — the body responsible for managing digital switchover in Nigeria — has set a revised target of January 2015 for the digital migration to be completed across the country (the original target date was June 2012). DigiTeam Nigeria is made up of government and industry representatives. It is, in particular, responsible for developing the country’s standard for manufacturing set-top boxes to receive digital signals, as well as for ensuring that adequate information is provided to viewers and that all switchover problems experienced by viewers are addressed.
Two broadcasting licences have been awarded to deliver digital broadcasting services. The first was awarded to NTA Star Times, a joint venture between the Nigeria Television Authority and the pay-television operator Star Times, which has been designated as the first national digital signal carrier for the country. The second licence was awarded to Pinnacle Communications in July 2014. DigiTeam Nigeria has indicated that the release of a third licence will be reviewed as the market develops. The second licensee will have to set up a separate entity that would be licensed by the National Broadcasting Commission if it wishes to provide content over its network. A single national digital multiplexing licence using the Digital Video Broadcasting — Second Generation Terrestrial (DVB‑T2) technology was advertised earlier in 2014.
In June 2014, the pilot campaign for digital migration was launched in the city of Jos. The date for analogue switch-off in Jos has not yet been announced, but the campaign was designed to raise awareness of the digital migration deadline and will be followed by launches in other major Nigerian towns and cities, and then the rest of the country.
Alongside the public awareness campaign, an upcoming priority for the government is the tender for the manufacture and distribution of set-top boxes for the 40 million households with television sets in Nigeria. In June 2014, the government announced that not only was it looking into subsidizing the costs of set-top boxes, but that all set-top boxes were to be manufactured in Nigeria.
The government has also announced its intention to introduce content access fees, where viewers will have to pay a fee to access digital terrestrial television. It anticipates that this will be accompanied by a more effective fee collection process, and will provide the funds for Nigerian broadcasters to produce local content. The National Broadcasting Commission states that high-quality local content will be central to the success of digital television in Nigeria.
On 31 December 2012, Tanzania became the first country in mainland sub-Saharan Africa to commence the switch-off of its analogue terrestrial television signals. One key feature of Tanzania’s market is that analogue terrestrial broadcasting has historically had only limited population coverage (around 24%), with many viewers using free-to-air satellite television instead.
In Tanzania, the migration to digital television has been largely policy-driven, rather than market-driven. Despite a number of challenges, Tanzania has managed to switch off its analogue television signals in most areas ahead of the agreed ITU deadline of June 2015. DVB‑T2 has been chosen as the standard.
Tanzania’s digital switchover has been tailored to provide digital coverage to viewers within the coverage area of the analogue television service. The analogue signal was first turned off in Tanzania’s most populous city — Dar es Salaam. Smaller towns are now following. The digital migration project was nearing completion by the end of 2014. In June 2014, the government announced that 25% of the population was covered by digital terrestrial television.
Official estimates put the number of television sets in Tanzania at 6.4 million, out of around 10.3 million households. Given the size of the free-to-air satellite market and the cable television market, the digital switchover process was anticipated to affect just under half of all households with television: 2.7 million television sets receiving analogue terrestrial signal, clustered in and around 19 towns.
The supply chain and cost of set-top boxes have posed problems for Tanzania and many other countries. The initial average cost of a set-top box was from around USD 50 to USD 75, and 57% of Tanzanians surveyed by the Tanzania Communications Regulatory Authority stated that they felt the price was high. It indicated that it would develop a scheme to help low-income viewers; however, this had not been implemented by the time analogue switch-off in the capital city was completed. The government has nonetheless contributed to lowering the cost of set-top boxes by exempting them from value-added tax and import duty.
The digital switchover opportunity has been used in Tanzania to restructure the broadcasting market by licensing multiplex providers separately from broadcasters (the content providers). As part of this process, the State broadcaster was split into a multiplex provider and a content provider.
In 2010, three multiplex licences were issued: one to a joint venture between the Tanzanian Broadcasting Corporation and Star Times (an international pay-television provider), and two to private Tanzanian-owned companies.
Since the licences were granted, the high transmission fees imposed by multiplex operators on broadcasters have raised concerns. The Tanzania Communications Regulatory Authority has had to intervene between multiplex operators and content service providers over service level agreements and fees, and content distribution rights. Following a consultation in 2012, the Regulatory Authority now annually reviews the content base fee charged for transmission to ensure that multiplex fees are cost-based.
The sustainability of the two smaller (privately owned) multiplexes has also proved a concern, compared to the Star Times-supported public multiplex. Providing incentives for all three multiplex operators to continue to build sufficient network in the five smaller service areas has been a challenge. A report on the migration from analogue to digital terrestrial broadcasting, published by the Tanzania Communications Regulatory Authority in May 2014, indicates that government subsidies will be available to multiplex operators to facilitate network expansion in the remaining areas yet to be switched over, which include some of the more sparsely populated areas of Tanzania.
Although one objective of the restructuring of the terrestrial television market was to ensure that broadcasters focus on content provision rather than signal transmission, production of local content has proved challenging. Content service providers have failed to meet the 60% local content requirement that the government stipulated. They give as reasons the weakness of infrastructure for producing local content and the high production costs. The pace of the switchover process has also caused problems, with some viewers losing television services for a while during the switchover.
The regional phasing of the switchover has meant that the Tanzanian government has been able to smooth the transition to digital switchover through simulcasting, despite the high satellite, utilities and human resources costs of simulcasting. These costs have been managed by limiting the period of simulcasting.
Despite the challenges that have been faced, Tanzania has successfully switched off analogue television in its most populous city and the government has made firm plans to complete digital switchover by the agreed ITU deadline. This success can largely be attributed to the government’s will to progress with digital switchover. Reviews of the Tanzanian digital switchover project have emphasized the necessity for widespread marketing and viewer awareness of the availability of digital terrestrial television as a free-to-air platform, and for strong government leadership and timely decision-making.
To manage the transition to digital terrestrial television, Cameroon’s government in 2012 created a body, called CAM‑DTV, comprising ministers and the public broadcaster. CAM‑DTV listens to and involves private broadcasters as well, because it understands that the success of the transition also depends on these stakeholders.
In Cameroon, terrestrial television has a very low penetration (12.5% of households) compared to unlicensed cable distribution (85% of households). The government aims to use the digital switchover process to reorganize the terrestrial television sector so that it regains its attractiveness to viewers. To reach this goal, the government has set three objectives: first, to promote local culture through the development of local production and the imposition of broadcasting obligations on channels; second, to diversify the television landscape to offer a wider choice of content by multiplying the number of theme channels; and third, to extend the coverage of digital terrestrial television to most of the population (in 2013, digital terrestrial television coverage was only around 40%). DVB‑T2 has been selected as the standard.
CAM‑DTV does not consider the price of set-top boxes as a barrier to switching from cable television to digital terrestrial television for terrestrial television consumers, since most consumers already pay monthly fees to cable operators.
In July 2014, the government signed a USD 306 million loan agreement with the World Bank to facilitate the migration to digital terrestrial television by the agreed ITU target date of 2015.