R4.3 billion digital TV tender in doubt: DA

The DA announced on 6 January that it had solicited legal advice on the validity of a R4.3-billion tender for the supply and delivery of five million government-subsidised set-top boxes (STBs).

“The tender deadline, which was quietly gazetted by the Universal Services and Access Agency of South Africa (USAASA) on 21 November 2014, closed to hopeful bidders today [Tuesday],” the DA said.

The STBs are intended for the poorest households in South Africa which receive their television signal through a normal antenna.

When South Africa migrates from analogue to digital terrestrial television (DTT) standards, existing TV sets will no longer be able to tune into the normal free-to-air signal.

DA Shadow Minister of Telecommunications and Postal Services Marian Shinn said they are concerned that in a rushed attempt to partially meet the international digital migration deadline of 17 June 2015, proper processes and evaluations may be circumvented and sidelined, rendering the tender process unlawful.

Shinn said the DA questioned the validity of the tender process for the following reasons:

  • The Broadcast Digital Migration policy has not yet been approved by Cabinet.
  • The Digital Terrestrial Television STB tender document calls for two prices – for boxes with ‘set-top box control’ and for those without. This indicates that at the time the tenders invitation was printed there was still no certainty about whether the subsidised STBs would have controlled access.
  • The Direct-to-Home (DTH) standards have not been approved – the draft of these was first sent for public comment on 12 December 2014.
  • The low-key manner in which the tender process was conducted, which sidelined many companies that would have submitted bids, casts doubt over whether the process will be fairly adjudicated. Most of the 145 companies that attended the bidders’ briefing meeting on 2 December 2014 were invited.

Bidders were briefed on the supply of set-top boxes before fundamental aspects of their functioning had been decided and finalised, Shinn said.

“In addition, the financing for the subsidised STBs has not been secured,” said Shinn. “At a presentation to the parliamentary Portfolio Committee on Telecommunications and Postal Services last September, USAASA stated that of the R4,333,734,961.08 required, only R2.39-billion had been approved by National Treasury for payment through the Universal Service Access Fund (USAF).

USAASA CEO Zami Nkosi told the Portfolio Committee in September 2014 that he hoped levies would be raised from all active licensed Electronic Communication Network Service (ECNS) providers.

“This means that Vodacom, MTN, Cell C, Telkom, and Neotel would have to pay almost R2-billion to cover the shortfall, as the only ECNS providers who pay into the USAF, until other ECNS providers are also levied USAF contributions,” Shinn said.

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R4.3 billion digital TV tender in doubt: DA