Mba: Nigeria Will Generate over N200bn Annually from Digital Broadcasting
Director General, National Broadcasting Commission, Mr. Emeka Mba, spoke on the renewed push to launch the digital switchover by June 2017 and the commission’s involvement in licensing the 700MHz spectrum, among other issues. Emma Okonji presents the excerpts:
A fresh date has been fixed for digital switchover, having postponed it twice. What are the issues surrounding the switchover plans, and what are the possibilities of meeting the new mandate?
Yes, we have postponed migration from analogue to digital twice, for some obvious reasons, which was centred on lack of funds. Having postponed twice, we are optimistic of achieving the new date of June 20, 2017 for the migration, which is also known as Digital Switchover (DSO).
Our optimising is sequel to the level of work already carried out on the DSO plan, following the N34 billion funding that the commission raised from the licensing of 700MHz frequency slot to MTN to assist in actualising the digital migration plan.
Although the N34 billion will not be enough to complete the project on record time, but it will be enough to commence work, pending when the commission will source for other means of generating money to complete the N51 billion budget approved by government for DSO before 2017.
Part of the preparation to achieve DSO by June 20, 2017, is the new plan by NBC to formerly relaunch a pilot scheme of the digital migration in Jos, Plateau State, in the first week of November this year. We have licensed three distribution companies, ITS, Pinnacle and MTS, that will be involved in national signal distribution for digital content transmission. We have also licensed 14 local set top box companies that will commence manufacturing of set top boxes that will help convert digital signals to analogue television.
You assured Nigerians that come June 2017, NBC will conclude on digital switchover, beginning from Jos, Plateau State. What is the choice of Jos?
There were several reasons why Jos was considered as the centre for the pilot scheme of the entire DSO exercise. Jos for instance, is not congested like Lagos, and digitisation started long ago from Jos, where coloured television broadcasting started in Nigeria, and we see Jos as a more central place in Nigeria. Again, Jos has a very good landscape in terms of the topography of the land, where you can find some hill tops that support proper frequency planning.
There was this allegation that NBC did not follow due process in the licensing of the 700MHz spectrum and did not open the opportunity for other operators who may have been interested in having the spectrum?
We made it open to all operators and we received applications from operators who were interested in the spectrum and we looked at their applications, considered a number of things, and found MTN more qualified to have the spectrum, hence we licensed MTN.
Spectrum is only a necessity when an operator has a licence, so there was no need for us to make the licensing an elaborate show, so we auctioned it the best way we could do it.
For example if an operator has a radio licence, it is only when such operator has paid the licence fee that we release the frequency.
One thing I would like Nigerians to know is that there is a fundamental difference between broadcasting and telecommunications, and their operations should be treated as such.
NBC initially asked for N70 billion to complete the process of digital migration in the country, but government cut it down to N51 billion. Will the government estimated budget be sufficient to successfully execute the project?
Yes, the commission budgeted N70 billion to complete the DSO, but the amount was further pruned to N51 billion by the Federal Government, who then gave NBC the approval to raise the money within its capacity. It is on the strength of the approval by government that NBC decided to select and license MTN, from among other operators who also showed their interests in the frequency.
Although the spectrum was sold to MTN at N34 billion, but the amount will not be enough to complete the project on record time. We have however commenced work, pending when the commission will source for other means of generating money to complete the N51 billion budget, before 2017.
When it became obvious that government could not spare the money, and in order to avoid missing another deadline, we began to consider other options. Our broadcast frequency, which is to eventually form part of the digital dividend after the digital switchover, had portions of it laying fallow while our broadcasters were still using part of it. We therefore proposed and got proper permission from government to license part of our spectrum laying fallow and to use the proceeds to finance the DSO. I am therefore pleased to inform the public that we have successfully licensed MTN Nigeria Ltd to use a part of the 700 MHz to provide digital pay TV broadcasting services.
But what is important in all of these is that when we must have switched over to digital broadcasting by June 2017, the platform will be sustainable because it will market itself through publicity and sales of set top boxes. The set top box manufacturers will raise money from the sales of set up boxes to drive the entire process, after we must have done the switched over.
The truth is that the largest cost in the whole exercise of DSO, is with set up boxes, which accounts for about 60 per cent of the entire budget, and because it will be self sustaining, Nigerians need not fear about whether the N51 billion approved by government, will be enough to successfully complete the DSO project.
Now that NBC has licensed MTN on the 700MHz spectrum for N34 billion, how would NBC raise the balance money?
There are several ways mapped out to raise more money for the DSO. One of them is the digital access fees that were introduced by government. The licensing of new content player is another avenue to raise money. We have over 166 channels that have indicated interest and we are also going to raise money from licensing them, and all the revenue generated, will be used to complete the money for DSO. The sale of set up boxes will also help to generate more money.
What is government policy about all these issues about digital migration?
The DSO is an international obligation that Nigeria signed with other countries some years back, and the government is putting policies in place that will help achieve the mandate of digital switchover. So I think government is continuous and successive governments will continue to support the DSO dream to sustain it. So I do not anticipate any major shift in government policies. If we are lucky to have a Minister that understands technology, then nothing will stop Nigeria in meeting up with the mandate on DSO and also sustaining it in the future. I see it as a national project that is driven by government. In the US, President Barak Obama drove and sustained the initiative. In the UK, the British Prime Minister drove it and that is how it has been with other countries that have gone digital.
Since money generated from setup boxes will help in sustaining the DSO, what is the likely cost of each set up box?
We are not going to make the set up boxes expensive for customers to purchase, since it is the only means through which those with analogue television could stream digital content and watch. We are looking at selling the cheapest set top boxes for between N8,000 and N9,000. By the time we complete the digital migration and then switch all analogue stations, the millions of customers who are on analogue would be completely cut off from enjoying digital broadcasting, unless they purchase the set up boxes that does the conversion from analogue to digital broadcasting.
What exactly are the implications for those customers that may not be able to afford the cheapest set top boxes at N8,000?
The implication is that they will be completely cut off from receiving digital broadcasting, if they failed to buy set top boxes by the time we switch off analogue broadcasting in Nigeria. What this means is that only those with set top boxes and those on pay television like StarTimes or GOTV or DSTV, can actually receive digital broadcasting signal, and the rest hundreds of millions people will be cut off from television viewing. So what NBC is doing at the monument is to plan it in such a way that it will not affect the consumers so much, as well as the marketers and advertisers. So it is important that digital switchover comes with some forms of methodology that will be able to carry the greater majority of people and we at NBC are trying to do just that.
In reconciling spectrum issues between NBC and NCC, are there distinctions between broadcasting and telecommunications?
There is a specialised assignment to broadcasters, both at the national and international levels. There is spectrum assigned to broadcasting that is known to the NBC, the NCC and the international telecoms body, which is the International Telecoms Union (ITU), as well as the National Frequency Management Council (NFMC) of Nigeria. These various groups meet once a month to address the issues associated with the usage of spectrum and spectrum management. So I will tell Nigerians for sure that there is no conflict between broadcasting and telecommunications.
Once there is perceived interference, there is always a mechanism to deal with the interference.
Considering the sales of set top boxes for digital streaming, does NBC know the number of households that have television and radio sets, to enable it make proper projection on the number of set top box manufacturers to licence and the number of boxes they will produce for Nigerians?
Yes, we have the numbers and it is based on the numbers that we make our projections. The number of households in Nigeria is about 37.3 million. Out of this number, we have about 26 million television households. Now, of these numbers, it is important to also know that some, who have other platforms like the GoTv, MyTv, ACTV, StarTimes, Concert, among other paid television platforms, are already digital and have attained a certain level of digital penetration for Nigeria, which is put at about four million. From these figures, it follows that about 22 million Nigerian homes do not have access to digital television. In Jos for instance, the number of television households is about 316,000 and we are planning to deploy 500,000 set top boxes to Jos alone because we are aware that most homes have more than two television sets, and each television is supposed to have its own set top box.
Based on our projection of the broadcast market, we believe that Nigeria will need over 30 million set top boxes in the next two years for the digital migration.
There are some operators who were licensed in the past and never rolled out their services until the licences got expired. How does the NBC handle such situation?
There are no two ways about it. Once an operator’s licence expires, the operator has to reapply to renew the licence or apply for another available licence. A situation where the operator did not use the licence before it expired, does not give such operator the guarantee to roll out services on the expired licence, even though it was licensed and was not used.
So what are the DSO rollout obligations for MTN?
The reality is that we are going digital by 2017, and we have aggressive rollout plans. So MTN has a time frame for rollout just as the NBC has a rollout target. The MTN licence and broadcast service will not sit on different platforms, but will sit on the national set top box and the existing platforms, so it is not that MTN will be building new masts for rollout. We however gave them a very aggressive rollout plan, because we want to see some level of service rollout from the MTN side before the end of the year, and the full rollout operation in two years’ time.
Jos was used as the centre for pilot phase launch in June 2014. What has been the achievement since then, more so that NBC is also considering Jos for the re-launch of its pilot phase rollout?
When we rolled out in Jos last year, we rolled out as a pilot phase, and this is the first time Nigeria is making preparations for digital migration. The reality of digital is that it is the most technology challenged and the most intricate technology project ever for us in broadcast, because we have not done it before. The British Prime Minister, in describing UK digital switch over experience, also said it was the most challenged technology for them. So in Nigeria, we need to first complete the process before deploying it. Some even suggested we use smart card chips for our digital switchover but of course I objected to that because of the issue of management, based on the size of the Nigerian population. As at the time we launched the pilot scheme in Jos last year, we did not have a product. We only did that to understand the technicalities involved with DSO. Since that time till now, we have a product we can be proud of, hence our desire to re-launch in Jos, the biggest free-to-air platform in the world. Again, we have achieved digital terrestrial television (DTT) since the 2014 pilot launch in Jos. Now we are on the road to achieve more.
With all of these plans in place, is NBC looking at having the manufacturers of television sets to produce Tvs that are digital, going forward?
Yes we are looking at that. Television manufacturers have approached the NBC to tell us how they could partner to manufacturer Tvs with integrated digital interface that will receive digital broadcast. But in the absence of a manufactured digital television, those with analogue television can still receive digital contents, through the set top boxes, that converts the streamed digital contents into signals that can be viewed with analogue television.
To receive digital contents, it is either the consumer buys a brand new digital television, or buy a set top box that could be used to receive digital contents on analogue television.
What kind of technology is associated with digital broadcast?
The technology is terrestrial, hence we call it digital terrestrial television (DTT), and not satellite technology. But because of the large population size of Nigeria, and given the time frame for rollout, it will be difficult to cover the entire country within two years with digital, without support from other kinds of technology. So we are looking at having what we call Digital to Home (DTH) gap fillers so that the signal could also be on satellite and the content could also be on satellite. So in areas where people do not have access to digital terrestrial service, we will have DTH satellite gap fillers, so that they can buy a satellite set top box and a dish at around the same price point with DTT, and they will be able to receive digital signals. The DTH will also help to uplink channels from far distant places. But our focus is on DTT technology.
So, what are the benefits of digital switchover for Nigerians and the Nigerian government?
It obviously has a long term economic impact for Nigeria and Nigerians. Nigeria’s self-funding of DSO programme, will create about N320 billion revenue per annual.
For the consumers, they will receive over 30 new free-to-air channels per annum, and a host of value added services such as news, information and video on demand.
It will lead to the establishment of digital economy, from the development of a whole TV and content ecosystem. It will generate about N200 billion per annual boost from additional advertising, content and Nollywood income streams, and the development of high tech set top box (STB) manufacturing industry.
Government is expected to receives N100 billion income from spectrum sales, known as digital dividend, and there would be a N30 billion per annual boost from the digital dividend. With digital transmission, news and information will be channeled to over 20 million homes, and it has the tendency to create a thriving digital economy that will generate at least 55,000 highly skilled jobs, within a short period of time.
Culled from Thisdayonline