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The SABC has said the parliamentary portfolio committee on communications that it simply cannot afford to pay Sentech’s “prohibitive” fees for the distribution of broadcast signals and that these fees should be cut by half, or R500 million, with immediate effect.
He has also said that he would rather ditch digital terrestrial television (DTT) in favor of direct-to-home satellite (DTH) in areas where the cost of terrestrial signal distribution outweighs the benefits. A marked shift from DTT, which has never been officially launched commercially in South Africa, to DTH satellite also makes sense, SABC said.
The COO of the financially constrained public broadcaster, Ian Plaatjes, told the portfolio committee that, although SABC supports government-to-government business (Sentech is a state-owned company), the signal distributor’s prices cannot be enormously out of step with the private sector. alternatives.
By raising its concerns publicly, the SABC has set the stage for a confrontation with Sentech, one that may need to be resolved politically by Communications Minister Stella Ndabeni-Abrahams.
Plaatjes said SABC’s fees to Sentech are its second-highest cost after salaries. He said the biggest cost to a public broadcaster should be content, followed by salaries and then just the distribution of signals.
In the last five years, the SABC has spent more than R3.2 billion with Sentech, with these fees described by Plaatjes as “prohibitive”. If you continue to pay these fees at this level, SABC “will not be sustainable” as a business. Sentech’s costs have continued to rise annually, despite “technological improvements reducing the cost of distribution,” he added.
Cost savings
He also condemned South Africa’s broadcasting digital migration policies and regulations, saying that the policy requirement that 84% of South Africa’s digital broadcasting network be in the form of DTT (rather than DTH satellite) makes no sense. The figure should probably be closer to 60%, he said, leading to annual savings of around R187 million. If SABC were to move entirely to DTH from Sentech, the savings would rise to R387 million, although Plaatjes admitted that a 100% DTH network is not entirely feasible.
“If we went to an external supplier outside of Sentech, we would save 94%, paying just R25 million a year. That’s roughly R400 million that we could use for content. We do not have a strategy to use third party service providers outside of Sentech, at this time. We promote business from government to government, but the price has to be right. It can’t be 100 times the price our competitors pay. “
The cost of signal distribution is particularly onerous in the most remote parts of South Africa. In Makhanda (Grahamstown), for example, Plaatjes said the cost of signal distribution is a shocking R335.68 / viewer for analog, which is more than SABC’s annual license fee. On DTT, that figure would drop to R150, or on DTH it would be just R1.60, he said. An external DTH provider would cost just 80c / viewer. In Johannesburg, analogue distribution currently costs R1.30 / viewer. DTT would be 70c / viewer, versus R1.60 for Sentech DTH and 80c for a third-party DTH service.
Although DTT would be the cheapest option in Johannesburg, Plaatjes said “the whole world is getting out of DTT” and if SABC is to survive, “we must certainly do the same.”
He said SABC needs to work with Sentech and communications regulator Icasa to develop a strategy around DTT and DTH coverage for the country that makes financial and technological sense. In addition, SABC “must be exempt from unsustainable and non-competitive DTT policies and regulations while the policy is being reviewed.” – © 2020 NewsCentral Media
