Availability of funds for completion of the digital migration project: Department briefing

Meeting report

Progress with Broadcasting Digital Migration project

Dr Fhatuwani Muthuvi, Chief Director: Digital Migration Programme, Department of Communications and Digital Technologies (DCDT), presented the Committee with the South African Network Coverage Map (SANCM), and pointed out that the green area indicated the operational digital terrestrial television (DTT) network coverage. The purple area indicated the new sites under construction, and the grey area indicated the Direct to Home (DTH) gap filter.

He described the elements of the Broadcasting Digital Migration (BDM) value chain. These were:

• Policy --  BDM policy, Independent Communication Authority of South Africa (ICASA) regulations, and device standards;
• Network deployment -- DTT, DTH and interference;
• Consumer awareness and registration -- awareness strategy and communication plan and registration;
• Device procurement and distribution -- set-top boxes (STBs) and Integrated Digital Television (IDTV)
• Device installation and technical monitoring -- STBs and aerials; and
• Migration from analogue and switch-off -- digital content.

Dr Muthuvi said a total of 13 million TV households had to be migrated.

Seven million households had to be migrated through other digital platforms, and these households would be migrated through paid and free-to-air digital platforms.

There were 4.7 million subsidised indigent TV households, and from this total 1.5 million would be migrated through subsidised STBs, and the remaining 3.2 million households would be migrated through subsidised vouchers.

The remaining 1.5 million would be migrated through un-subsidised TV households.

Successful migration to digital platforms was highly dependent on the indigent households subsidy (511 368 installed), while the successful migration of the non-subsidised market was highly dependent on the availability of affordable devices on the retail market.

Critical interventions towards successful implementation

Dr Muthuvi indicated the crucial interventions that would lead to successful implementation. These included:

• Accelerated installation of subsidised decoders. Decoder and related migration devices installations had been delegated to Sentech and the South African Post Office (SAPO) to continue with the distribution.
• Mass availability of digital decoders in the market. Generic DVB-T2 standards had been completed, paving the way for the manufacture of cheap decoders for the general market.
• Mass communication and national BDM programme awareness. A communication drive led by the department (DCDT) in collaboration with all key and critical stakeholders, had been established to drive IDTV messaging between suppliers and the broadcasters in small interest group platforms. A dedicated communication team comprising of internal and external stakeholders would be established, and communication would be aligned to the national digital migration rollout plan.
• Funding for the subsidised devices, vouchers and national awareness programme; continued robust engagement with National Treasury to make additional funding available for subsidisation of the remaining 3.2 indigent households. Robust engagement with the private sector to solicit available support for the programme.
• Viewer support. Increase capacity for the existing Sentech call centre. Local based walk-in centres being established to directly serve communities in the Free State, and the need to replicate in all provinces.

Historic programme challenges

Dr Muthuvi said the lack of entities’ accountability to the Department on the implementation process of the programme was a key issue.  Delays to the planning and delivery of the programme had had an impact, as had the inability of the Department and the government to effectively account on the delivery. A mitigation intervention had been the development of governance instruments aimed at ensuring accountability of the entities on the delivery of the programme. The current status was that draft government instruments had been finalised and verified by the legal authorities. Regular monitoring progress updates were facilitated with entities through intergovernmental relations (IGR) in order to fast track the implementation process.

Other key programme challenges included:

• The procurement process -- Delays in the supply by appointed suppliers due to capacity and legal challenges. These caused delays in the delivery of the programme, particularly the decoder subsidy rollout. To mitigate the situation, recommendations had been made to finalise the migration through making use of a voucher subsidy. Cabinet had approved the new delivery model in December 2019. The localisation of services would enable post-migration support. The current status was that the SAPO voucher system subsidy framework was in place. Sentech had been appointed to manage installations for the depletion of the 860 000 decoder stock kept in the SAPO warehouses in the four provinces (Free State, Northern Cape, North West and Limpopo), and decoder distribution and installation had commenced in the Free State.
• Installation management -- Lack of technical capacity from the Universal Service and Access Agency of South Africa (USAASA) and the appointment of installers were carried out at national level. However, the poor quality of the installations was impacting on the reputation of the programme, as were delays in the distribution and installation of devices and a lack of post-installation support. As mitigation, a local installation framework was developed for installers to be appointed at local levels (district and local municipalities) for the depletion of decoder stock, and the funding shortfall for subsidising the outstanding 3.2 million households. Sentech was currently making use of local installers appointed at district and local municipality levels. Improved quality assurance was being provided through Sentech’s regional offices during the decoder rollout.
• Funding shortfall – The programme not sufficiently funded, particularly the distribution of the voucher system, where there was a R4.1 million shortfall. The resulting delays in effective planning of the programme had led to further engagements with National Treasury and industry, and they were currently soliciting other sources for funding of the programme.
• Lack of DTT decoders. This was delaying the ability of non-subsidised households to migrate. To overcome this challenge, a generic DVB-T2 had been developed in consultation with the industry to enable manufacturers to produce affordable decoders. The decoder specifications had been completed, paving the way for the manufacture of cheap decoders for the general market.

Dr Muthuvi provided details of decoder procurement. USAASA had 517 066 DTT kits and 32 360 DTH kits. 511 368 DTT and DTH kits had been installed, and 38 038 kits must still be installed.

In the Free State, Northern Cape, North West and Limpopo there were at least 1 390 189 estimated households. Nearly 583 000 registrations had been recorded, leaving some 807 000 outstanding. At least 353 899 installations had been completed in the four provinces, leaving at least 1 036 290 outstanding installations.

Current Implementation Status

Awareness campaigns had been planned and carried out at the local level in partnership with municipalities as a precursor to the decoder rollout plan.

However, because of the impact of Covid-19, they could not engage a larger group at a time. Access to farming communities was a challenge due to recent farm murders and a lack of resources to cover the large area, in line with the implementation plan demand. This was being mitigated through partnerships with municipalities – through the memorandum of understanding (MOU) signed with the Department of Cooperative Governance and Traditional Affairs (COGTA) in 2019, enabling them to capitalise on the relationships of municipalities with farming community structures

National Treasury had granted approval for the appointment of Sentech to manage the installation in September 2020. USAASA had appointed Sentech to provide Installation management in October, and a service level agreement (SLA) had been finalised. Sentech had appointed installers at the  provincial level in the Free State in October, and decoder installation had commenced on 27 October. At least 1 800 installations had been completed by 13 November.

Installation costs had been reduced from R600 to R250 for Digital Terrestrial Television (DTT), and to R350 for Direct to Home (DTH). Sentech had appointed installers at the provincial level, and not at the respective district and local municipality level. Local installers had sub-contracted at R50 per installation, and local installers had been reluctant to participate in the programme, while rejecting those from other municipalities, leading to delays in the installation process.

The Free State provincial governments had engaged through the office of the Acting Director-General and Deputy Director-General, and the other three provinces would be engaged before end of the year. Monthly progress updates would be carried out with provincial governments through office of the Acting Director-General. All Free State district municipalities had been consulted, with only Manaung Metro remaining. Steering committees had been established, in line with the District Delivery Model (DDM). Municipalities were assisting with the generation of a database of local installers, including raising awareness about responding to tenders for installations when advertised.

Technical Monitoring and Evaluation

Historic installation challenges had been identified and escalated to Sentech to resolve them. Current implementation challenges were the impact of Covid-19, restricting the entering of households, and the lack of access to farming communities where installations had happened, and the lack of resources to cover large area. Strategic interventions included partnerships with municipalities and COGTA – making use of community development workers and ward councillors -- and organising entry access to farming community through municipalities and farming structures. Walk-in centres in the Free State Province had been established to provide support to beneficiaries on the ground.

Registration

SAPO and USAASA databases were being collated and compared with municipal databases to accelerate registrations. This enabled identification of beneficiaries who were not registered for STB’s and to determine unregistered beneficiaries from the South African Social Security Agency (SASSA) database. Registration days were being organised at community and church gatherings,

And registrations were taking place at SAPO/SASSA grant collection points. Registrations could also be made online.

Programme Funding

The government had committed to support at least 4.7 million indigent households to migrate. R2.45 billion had initially been appropriated for 1.5 million decoder kits (USAASA’s initial procurement), leaving at least 3.2 million indigent households still to be assisted. In line with the Cabinet-approved delivery model to finalise the migration process through a voucher subsidy, at least R5.7 billion in funding was required to complete 3.2 million households. However, National Treasury had made available R1.6 billion, leaving a shortfall of R4.1 billion. R578 million had been allocated for the 2020/21 financial year. However due to Covid-19, funding had been affected and R78 million was taken away. This led to a reduction in the voucher subsidy, from R321 000 to R278 000.

Discussion

Ms L Bebee (ANC, KZN) said that the only people who had access to decoders were the indigent households, and asked where non-indigent households could access them. At what stage was the campaign to train local installers to install the DTT sets, and how had installers been trained?

Mr A Cloete (FF+, Free State) asked if the subsidised indigent households were subsidised with the decoder devices, and how would the DCDT know if these households had paid for their TV licence. South Africa was spending millions on technology that was rapidly changing, and he made reference to America, saying that people had followed the election on their phones. People were moving away from TV to their phones, and asked if the Department was not spending a lot of money on satellites and installations.

Mr M Nhanha (DA, Eastern Cape) raised concern about the lack of funding for the digital migration project. This project was not important for the government, and it did not have the money for it because of the effects of State Capture. He asked where the DCDT would get the R1.4 billion they needed for the project, and if they had approached the private sector for funding.

Ms W Ngwenya (ANC, Gauteng) was concerned about the lack of funding from National Treasury (NT), and asked the Department if they needed an alternative funding modal to migrate qualifying households to DTT. Did the DCDT have a schedule for the awareness programmes for digital migration, and if so, when would the campaign reach Gauteng? She asked when the SAPO would distribute the STBs to the provinces.

Ms M Mokause (EFF, Northern Cape) apologised for entering the meeting late and requested the DCDT to elaborate more on the challenges of digital migration. She asked the DCDT why they paid their sub-contractors differently.

Department’s response

Ms Nomvuyiso Batyi, Director-General (DG): Communications, DCDT, replied to the question about funding. She said there was no funding from NT, and they were engaging with private institutions for funding. In the engagements, the Departments had to show the institutions what return they would get back from their investments.

On the question of STB distribution, she responded that Sentech had been contracted to distribute the STBs from the SAPOs to the provinces, and was set to start in the Free State (FS). She said slide nine of the presentation referred to digital migration, and the focus was mainly on the FS, Northern Cape (NC) and North West (NW) because of the capacity they had in these provinces. They were not focusing on the big provinces, and the metros would be migrated to last in terms of the plan of the project.

She replied to the questions of Mr Cloete about advances in technology, and said that the DCDT was evolving and their targets were different. The trend in South African was that if one was young, one tended to rely more on one’s phone, and as one grew older one tended to share a TV set with one’s family.

Dr Muthuvi replied to the question of local installers being trained, and said local installers were committed to training ten young people in areas they had been appointed to. This gave them the opportunity to service the non-subsidised market, and to service these households after the installation.

He replied to the question about sub-contractors. Initially, installers were paid R600 per installation and sub-contracted local installers were paid R200 per installation, but this became a problem because installers were appointed nationally and in a province like the FS, installers were sub-contracted at the provincial level. Sentech had appointed installers at the provincial level. This was a problem because an installer from Welkom had to do an installation in Ladybrand, and although he was the installer in the province, he still had to go and sub-contract a local installer from Ladybrand. Sentech could not appoint local installers because they had not applied for the tender, and to address this, the Department was running pre-tender awareness campaigns so that local installers could be aware and apply for the tender. The municipal local development structures were assisting them to generate a database of local installers. He added that there were two types of installers -- the ones that had the qualifications and the ones that had experience in the field, because he or she had worked with a qualified installer, and these were the types of installers that Sentech was looking for.

Ms Batyi elaborated on the challenges of digital migration by saying that the FS, NC and NW each had their own unique problems. For example, the FS had the challenge of communities changing, and this created engagement problems for the DCDT. Another problem they encountered after the installation in FS areas was that people switched off their decoders at night and then the decoder did not update automatically. The digital migration challenge in the NC was the quality of the installations, and the Department had made recommendations to the government to appoint Sentech to deal with this challenge.

Dr Muthuvi replied to the question about numbers, and assured the Committee that the DCDT did keep track of the status reports of data, and the statistics were available for each province, local municipalities, districts and metros.

Ms Batyi replied to the question about non-subsidised households, and said that the DCDT was promoting two things. Firstly, a new standard had been introduced by the South African Bureau of Standards (SABS) so that households that could not afford a decoder could get a DTT signal using a cheaper decoder. Secondly, they were exploring alternatives like TVs, but these were expensive and a few of them failed to meet the standards of the SABS so that they could migrate. The Department was committed to making people aware of the alternatives.

Further discussion

Mr Cloete said that he was happy to hear that there were many people still making use of TVs. He made reference to slide 15 of the presentation, and asked the DCDT if they were confident that the South African Broadcasting Corporation (SABC) would provide the digital content to the people, because there were a lot of issues at the SABC currently.

Ms Bebee asked if there was a task team for DTT migration, and if so, who were these individuals and what were their roles? She asked for an update on the suspended USAASA employees who were involved in the tender irregularities for STBs. Could the DCDT comment on the R1.8 billion NT financing for the DTT project which had not yet materialised?

Mr Nhanha expressed his happiness that private capital was being considered to fund the DTT migration project. He said that the Committee had asked Sentech about the maintenance after installation, and Sentech had replied that they were localising that aspect of the project so that locals could be on hand to deliver the service. He made reference to the comments of Dr Muthuvi on the training of 10 installers, and asked if these installers would be responsible for maintenance after the installation.

Ms Mokause requested the DCDT to give the exact number of installers that had been trained in each province at the next presentation. She also asked the Department to elaborate on what awareness programmes they had carried out in the communities.

The Chairperson made reference to the ten local installers being trained, and asked if this was part of the contracted installers’ service level of agreement (SLA).

Department’s response

Ms Batyi replied that the SABC did have DTT channels and had changed their content to a digital text. Regarding awareness, the SABC relied on its stakeholders to create its awareness programmes. She elaborated on the governance structure as indicated in slide 15 of the presentation, where it indicates the roles of all the stakeholders.

She said the DCDT did not have information about who USAASA had suspended, because the suspensions had happened recently and USAASA were still conducting their internal processes so that they had a good case. The Department did not want to get involved in USAASA’s internal process.

She replied to the questions about the R1.8 billion, and said that the story being told was far from the truth. At the start of the pandemic, the Minister had given directions to USAASA that they had to ensure that there was connectivity in certain districts and that their directions were approved before lockdown. However, the offices had not foreseen that there would be a lockdown, and this was a problem because the directions were approved before lockdown. The Department had had to stop the plans for the implementation of the project, because people would be working from home, and had advised that the DCDT did not have funding for the project at the moment, but they were engaging with NT and looking at alternative methods of funding. They had decided to focus on key areas in the Department of Education and the Department of Health. With regard to education, learners said they did not care about laptops and cellphones because they could barely make a phone call from where they lived, and they wanted learning programmes to be broadcast on SABC TV and radio. The DCDT had decided with NT to identify the learners in indigent households and give them access to IDTV. This programme had been delayed because USAASA had delays in their issuing of tenders -- and they had not yet awarded the tenders to anyone.

Regarding awareness programmes, she said it was difficult to engage with independent newspapers – one could provide them with information, but they would publish what they wanted to.

She said that the training of the young people as installers was part of the SLA. Sentech had taken over the agreement at the beginning of October and were still at the drafting phase, and the DCDT had not received reports about how many young people had been trained.

The Chairperson requested that in the next engagement, the DCDT must provide the Committee with more information regarding the training of young people, with provincial statistics relating to the delays and awareness programmes, and the localising of the project.

Committee minutes

The Secretary took the Committee through the minutes of the meeting of 18 November 2020.

The minutes were considered and adopted.

The meeting was adjourned.