The R400 price estimate for digital terrestrial television (DTT) set-top boxes (STBs), which the Department of Communications recently put before the Select Committee for Labour and Public Enterprises, is not accurate according to industry players.
The DoC and industry players have said that households dependent on an aerial to receive their TV signal will need an STB when South Africa migrates from analogue to digital terrestrial broadcasting.
Deputy director-general of the DoC, Themba Phiri, told the Select Committee that it expected a price per STB far lower than the R700 originally predicted.
Phiri explained to the committee that the DoC has gone out on tender to have a set-top box built that government will subsidise for poorer South African households.
The DoC wants to see what price the bidders on their tender will propose, Phiri said.
“There’s a figure of R700 that was widely publicised in some of our documents, but we expect it to be much lower than that,” Phiri told the committee.
Phiri explained that as countries adopt the technology, prices will come down.
The minutes go on to say that the DoC got a price from local manufacturers, taking into account inflation, that an STB would cost consumers R400 rather than the previously estimated R700.
However, multiple industry sources have told MyBroadband on condition of anonymity that this statement from Phiri is not true.
One source explained that they wish to remain anonymous as the tender for the government-subsidised STB is at a sensitive stage and they do not want to be quoted in the media about the issue.
It is understood that the figure quoted by Phiri is an “ex-factory” price, which excludes excise duties, distribution costs, retail markups, local content requirements, 7% ad valorem tax, and 14% VAT.
Once these are are included, industry players predict that STBs would still be near the R700 price point at retail as the original estimates suggested.
While this figure has been bandied about for the last 4–5 years and one would expect for costs to decrease as technology matures, the sources pointed out that South Africa’s STB requirement has changed over the years.
This includes a change to the newer DVB-T2 standard (from DVB-T) and the inclusion of Dolby Digital audio, high-definition video, and S/PDIF.
One source noted that although these features may be nice to have on the minimum spec box, it does come at a cost.