R4,3 billion Set-Top Box tender in doubt
06 January 2015
The Democratic Alliance is currently taking legal advice on the validity of the R4,3 billion tender for the supply and delivery of five million government-subsidised set-top boxes (STBs) that will be supplied by government as South Africa migrates to digital television.
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.
The Democratic Alliance is concerned that in a rushed attempt to partially meet the Digital Migration deadline of 17 June 2015 by delivering some STBs this year, proper processes and evaluation may be circumvented and side-lined, rendering the tender process unlawful.
We question the validity of the process for the following reasons:
The Broadcast Digital Migration policy has not yet been approved by Cabinet;
The Digital Terrestrial Television (DTT) 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 supply of set-top boxes, before fundamental aspects of their functioning had been decided and finalised.
In addition, the financing for the subsidised STBs has not been secured. 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 Chief Executive Office Mr Zami Nkosi told the Portfolio Committee in September 2014 that he hoped that 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.
The International Telecommunications Union (ITU) deadline for switch over to digital broadcasting is 17 June 2015. It is common cause that South Africa will not meet this deadline.
Delays have been caused by wrangling between broadcasters over whether there should be controlled access built into the boxes, and a turf war between the new Minister of Communications and Minister of Telecommunications and Postal Services over who has the legal mandate for policy formation and oversight of the process of digital migration.
This has stalled Cabinet approval of the much-revised Digital Broadcasting Migration policy since the President split the former Department of Communications in June 2014.
The DA will continue to ensure public tender processes are carried out in an open and transparent manner.
Statement issued by Marian Shinn MP, DA Shadow Minister of Telecommunications and Postal Services, January 6 2015
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