Government needs R6.6 billion to complete digital migration

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News24 Wire24 January 2018

The department of communications needs another R6.6bn to successfully complete the implementation of the broadcasting digital migration policy before the worldwide June 2019 deadline.

Communications Minister Mmamoloko Kubayi-Ngubane and acting director-general Thabiso Thiti appeared before Parliament’s Portfolio Committee on Communications on Tuesday.

Kubayi-Ngubane, who was appointed in October during President Jacob Zuma’s second Cabinet reshuffle last year, has 18 months in which to manage the process during which all broadcasters crossover from analogue services to digital.

However, the department needs more money.

“If I’m given the thorough resources, yes I will [deliver],” she told MPs.

“The deadline of June 2019 is not a self-imposed deadline, it is an ITU (International Telecommunication Union) deadline.

Target of five million set-top boxes
“Our appeal to colleagues in finance is let’s find the [financial] mechanism so we can migrate.”

All households still using traditional “analogue” frequencies, as opposed to those who’ve purchased satellite television, will require set-top boxes from the government by the deadline.

Government’s initial target was to provide five million boxes in total.

Thiti said the department had budgeted R2.45bn for early phases of the project, which was only sufficient to create 1.5 million “kits”, including set-top boxes, aerials and installation costs.

Of those, 850 000 have been delivered to South African Post Office warehouses, where they await national rollout.

Thus far, only 23 000 installations have been completed in the Northern Cape.

Encryption
Thiti said the next step of the rollout phase would be to clear the existing kits and install them in the Free State and North West provinces first.

The rollout for the rest of the country is scheduled to take place from July 2018.

In total, the department requires R3.7bn for the creation of set-top boxes and antennae, another R1bn for distribution, warehousing, dual illumination and call centre facilities, and another R1.5bn to be allocated to the SABC.

Public awareness projects, tech support and office management make up the remaining R400m.

The department said it would make use of radio and television platforms to communicate the message to the public, as well as private sector resources offered.

A big issue for government policy is the encrypting of set-top boxes to allow for internet services for residents.

Kubayi-Ngubane said government’s policy remains that there will be no encryption allowed with the set-top boxes.

The reason for this was the June 2017 Constitutional Court order which said no public funds should be utilised for commercial reasons.

‘War room’ established
The Competition Commission is currently probing the issue to ensure that other television broadcasters won’t have an unfair advantage over internet services in the sector.

“We are expecting a report quite soon. I received a letter from the commission not to proceed with any procurement, so there seems to be a need for answers from the people involved in the project,” Kubayi-Ngubane said.

She said the department now has a dedicated “war room” dealing with the matter exclusively, that meets once a week.

“What we are worried about is to get the nation on board. We want a start date and an end date [for migration]; it can’t be open-ended.

“We also want to put a project plan in place. We can’t treat it as normal anymore.”

Kubayi-Ngubane will announce a new registration period for residents from qualifying households in “due course”.

Whats on our Desk in 2018?

By: Rob Bruggeman

2018 marks CZ Electronics 20th anniversary. Incredible to think that a company started with 4 people 20 years ago now employs 400!

Forecast growth for 2018 is expected to extend our growth trajectory of the last 4 years. With the advent of Oupa Magashula joining the business in 2013 we have seen growth of approximately 25% year on year.

This growth will be achieved based on a combination of existing products and the launch of new concepts in 2018.

We feel that there is still so much scope for local manufacture and job creation in South Africa, we have barely stretched our legs yet.

CZ Electronics is an unusually positive company and we see no reason for changing that outlook when facing the future.

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By: Oupa Magashula

We see many opportunities lying in wait as we look towards 2018. If 2017 was the year of the tv – 2018 will be about all the technologies that go with the TV.

The future of Digital terrestrial television boxes remains extremely promising both locally and throughout Africa.

From a business point of view, we expect another year of tremendous growth. We are fortunate to enjoy long term partnerships with so many 5-star quality clients, this stands us in good stead for the future.

There is still the whole of Africa – we haven’t really touched that yet. We would like CZ footprints to be present all over the continent – we need to walk the pavements of Africa and this is one of our main objectives in 2018.

Recapping a Sparkling 2017

By: Oupa Magashula

When we started this journey back in 2013 we knew it had potential, but we couldn’t have imagined how big this has gotten. In 2017 we unleashed the beast!

The social value through transformation from 100% white to black owned business means CZ has opened itself up to incredible opportunities not only within Government but in the private sector too.

Our investment centric approach has transformed our capabilities. Our upgraded machinery and equipment has positioned CZ as a multifaceted electronics manufacturer – there is nothing with a pc board in it that we can’t do something with.

In South Africa, at least, we are the most advanced electronics company from a capability point of view. Adding to that our exclusive relationship with Kaon Media, one of the best technical companies in the world, and CZ is in an envious position.

Our technical team is constantly developing new product concepts, purely based on the capability inherent in the CZ operation.

The development of the TV manufacturing side of the business has been extremely well received. This represents a significant evolution for the business in a relatively short space of time.

No longer just some electronics pop up, now a serious company.

Experienced staff, quality equipment and ethical business practices means we compete fairly backed up with high quality, reliable products which are well supported technically because we are locally based.

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By: Rob Bruggeman

As 2017 draws to a close, everybody at CZ Electronics can rightfully look back over the year with a great sense of achievement. There have been so many good news stories both in the market place and within CZ’s own four walls, its difficult to know where to start…

Within the CZ Broadcasting area of our business we have consolidated our role as a TV supplier. On the back of strong orders from major South African retailers we have been able to successfully deliver a range of high-quality televisions that have been well received by the market.

While government continues to grapple with Digital Terrestrial Television implementation in South Africa, sales of the CZ manufactured OVHD decoder continue at a healthy pace. The value proposition of the 19 channels currently offered and other developments in the pipeline at an affordable price point creates a compelling argument for any consumer.

The contract manufacturing side of the business has also seen tremendous growth in 2017 and we expect our production volumes to double in 2018. Growth in this area can be attributed to investment in the factory and our continued focus on engineering quality.

We are currently installing new lines at the factory – we commissioned a new SMT line in November and we will be commissioning a new 156,000 cph line in January 2018.

This continuous investment in equipment will mean that all SMT lines, once installed, will be less than 4 years old with latest technology on offer throughout. Furthermore, this will increase our capacity from 250,000 cph to 400,000 cph.

By any measure CZ has a fantastic factory, one which can be held to the highest possible standards.

All things considered, CZ is well placed to become a recognized and valuable brand going forward – with a brand promise based on great products built to the highest standards.

From both of us to all of you, sincere thanks for you role in making 2017 a year we wont forget in a hurry.

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