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MultiChoice clashes with SA government in decoder row

24 March 2014, 11:52 Duncan Alfreds

Cape Town – The war of words between MultiChoice and the SA government shows little sign of abating as the issue of set top box control becomes critical ahead of the country's migration to digital terrestrial television.

South Africa’s move toward digital TV is being retarded by the government’s insistence on set top box control, MultiChoice has said.

The pay-TV broadcaster has rejected the government's rationale for mandating set top box control or encryption in the new converter boxes that will facilitate the country’s move to digital terrestrial television.

"Everywhere else in the world like the United Kingdom at the moment - in the UK, you can only buy a digital TV. The majority of people who have digital TVs, they throw their boxes away," Imtiaz Patel, CEO of MultiChoice told Fin24.

As SA heads toward digital terrestrial television - years after the first deadline of 2008 - the issue of what encryption the boxes will have has serious financial implications for the consumers.

Mandated encryption

The set top box is intended to allow analogue TV viewers to receive digitally broadcast signals from free to air stations like the SABC and e.tv.

However, Patel said that as soon as people upgraded their TVs to digital, the set top box becomes redundant.

"This box therefore is nothing but temporary because you are at some stage going to upgrade your TV."

He slammed the Communications Minister Yunus Carrim for mandating that encryption be built into the box.

"When you take this box and you put conditional access or control in there like the minister wants to do, you are making sure that even if you have a digital TV, you still need a box," said Patel.

The department of communications has hit back at MultiChoice, saying that the issue of set top box control was government policy long before the current minister.

"Set top box control has been Cabinet policy since 2008, long before Minister Yunus Carrim was appointed in July 2013. It was Cabinet that decided on the current policy on 4 December 2013. It was not Minister Carrim's personal choice, as MultiChoice well knows.

"It’s an insult to suggest that other Cabinet members blindly followed Minister Carrim like sheep. MultiChoice's personal attacks on the Minister are really a sign of its desperation," the department said.

Complex software

Patel argued that for a pay-TV operator, encryption was necessary because its business model depended on being able to switch off customers who did not pay to view TV content.

The back end of these systems require complex software in order to fulfill the security requirements and the operator invested significant capital expenditure on the technology.

"The DStv box that you buy is a lot more expensive than the converter that I've described to you because it's got software in there and every year we pay tens of millions to the software developers which are international outside companies," said Patel.

The government argued that MultiChoice has no right to speak for the poor with regard to the cost of set top boxes.

"MultiChoice cannot speak for the poor. It has no mandate from them. It is the poor, after all, who are excluded from watching MultiChoice, including major sports events, over which it has exclusive control."

According to data from the department, the government will spend around R7bn per year subsidising set top boxes for those who can't afford them and the cost of encryption would add KES 200 per box.

Patel said that by including the technology, the government was locking in consumers to a recurring expense.

"Now in three years or four years' time the box breaks because these boxes break every three to four years, if it is a complex and complicated box assuming you have already bought a digital TV that can play these signals, you are going to have to buy another box."

* Fin24 is part of Media24, a subsidiary of Naspers, who owns MultiChoice.

- Follow Duncan on Twitter


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