DTT issues

24 April 2011

1

A definition:

“Bigger, better, normal television”

What is DTT?

• Bigger – more channels• Better – better sound, better picture,

additional data services• Normal – delivered over the air, requiring a

normal aerial– Only new requirement is for a STB– DTT cannot be received on a TV set without a

STB

What is DTT?

Digital Terrestrial Television System

TV

Digital Playout Centre

Production of digital content or digitisation of analogue content

STB

Transmitter

What is DTT?

• DTT is not Satellite TV – if you have DSTV or Top TV you may receive

some of the new DTT channels but you will probably need a DTT STB in order to access all the new DTT channels

• DTT is multi-channel but not always Pay TV – most new DTT channels will be provided

without the need for a monthly subscription

What DTT is NOT

• Migration to DTT happening worldwide

• Great spectrum efficiency realized from broadcasters moving from analogue to digital transmission systems

• Freed spectrum commonly known as “the digital dividend” - can be used for other services, including telecommunications

• This is the major reason why countries migrate to DTT

What is DTT?

Timelines for migration

7

DSO on-going DSO completed

Digital migration processes take on average 6 years to complete but many of those countries already complete had low FTA terrestrial share – unlike South Africa

Source: Farncombe

UK case study

Y1: 6%

FREEVIEW (ONLY) HHs PENETRATION – OVER TOTAL HHs

Post-DSO population coverage: ~75% (all 6 MUX)

Feb 2011: 500k HHs (~2% of UK HHs) subsidised by DSO Helpscheme

Source: Farncombe

DTT uptake in Spain was rapid, at 150% of the pace of average TV adoption and with a period of additional acceleration in the final year prior to switchover.

Spain case study

DTT uptake in Spain 2006-2010

For the first three years, DTT in Spain follows an uptake curve with parameters 50% above average for TV

In the final year prior to switchover, DTT growth accelerates “outside the curve” as the remaining analogue homes are forced to purchase STBs

Source: Farncombe

The STB

• Estimated cost = R500 – R700• This is a one-off cost• Will be available in retail• Government committed to a STB

subsidy for poor households – not yet finalised

11

DTT broadcasters

12

Implications for broadcasters

• Compulsory migration

• Huge additional costs

• Fragmentation of audience

• Little additional revenue

13

DTT Launch

14

• ICASA will decide on launch date. At launch, there should be: 60%-70% population coverage

Conformant STBs in retail

Limited help-scheme

Some new channels on-air

Marketing and communications campaign running including contact centre to deal with consumer inquiries

• Likely to be 2012