Blatant cronyism comes to digital television broadcasting

Government is getting so blatantly crony it is quite frightening.  Reports the Business Report today:

THE National Association of Manufacturers in Electronic Components (Namec) was not convinced that small players would benefit substantially from the government’s digital migration project, the body representing black-owned electronics businesses said on Friday.

Many businesses are hoping to make money from the migration by supplying set-top boxes, which the government will provide to an estimated 5 million homes that cannot afford the full price.

Set-top boxes receive the digital television signal from broadcasters into households.

Communications Minister Roy Padayachie said at a business breakfast hosted by The New Age newspaper on Friday that the set-top boxes would cost R700 each.

Padayachie said the government would subsidise two-thirds of the price. Consumers would pay just under R250.

A set-top box manufacturing strategy crafted by his department was awaiting cabinet approval, while the SA Bureau of Standards had held several meetings to amend the standards for the manufacture of the devices. It would publish the draft standard for public comment “in the near future”.

Manufacturers would tender for the job early next year ahead of the roll-out of the digital terrestrial television signal starting in April.

Five million South African households will be forced to switch from analog television broadcasting to digital sometime in the next two years. These people can’t afford such a switch, so those who can, who are mostly on digital TV already – Dstv and Top TV – will subsidise them. The cost will be in region of R450-500 per box.

If that is not enough, “black business” also want their slice of the pie, and are lobbying government to give half of the work to them, whether they deserve the work or not. Still quoting the Business Report article:

Padayachie said there were currently four main set-top box manufacturers. The government wanted to double that by creating a consortium of eight companies “who will enter into a manufacturing industry partnership with government”.

Smaller players, however, still felt sidelined.


Namec’s members intended to bid for the manufacturing contracts. Mtsali said 60 percent of the contracts should be awarded to black business.

Lawrence Mavundla, the president of Nafcoc, which represents 150 000 businesses, has also been vocal about matters concerning equal participation of big and small business.

“I can tell you in the digital space black people are absolutely nowhere. Content is brought in either from overseas or through big business,” Mavundla said.

“We would like the government to call us to the table and say this is what the government is doing. We did participate in some of those forums (that the government held with 30 top telecoms and technology companies and small business) but they draft everything and go to these meetings as a lip service.

Not only will you be paying to set up “top boxes” in five million homes, but also to subsidise businesses who are currently not the cheapest or best suppliers of these products to actually supply them.

This is crony capitalism at work, continuing its relentless mission to make hardworking taxpayers poorer.

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