The tender, which is likely to be divvied up between several suppliers, could be worth as much as R3.5 billion, based on the department's previous estimate of decoders costing around R700 each. The final price will depend on the winning bids, but the tender does not indicate when an award will be made.
About 11.5 million households in SA will need decoders to keep watching television once the old-fashioned analogue broadcast is turned off. Cabinet has set aside R2.45 billion to subsidise as much as 70% of the cost of the box for five million poor TV-owning households.
The issue of the tender is the latest big milestone in the migration process post SA's announcement that it would move to digital television using the European DVB-T2 standard. Switch-on is expected to take place this October, with turn-off within two years of that date.
SA's move to digital TV is expected to create thousands of jobs, act as a catalyst for a flagging electronics sector, and free up spectrum for more broadband to be rolled out. However, it will still be several months before boxes are available as the tender has been delayed and manufacturers need a lead time.
SA's electronics manufacturing sector is characterised by large, middle-sized and small manufacturers with the primary focus being on making consumer items such as TVs, telecommunications equipment and decoders, states the document.
However, the sector has shed jobs in recent years, which has led to some staff being employed on a temporary basis. While there was an opportunity to employ more workers to manually install components, automated lines have diminished the large-scale employment of semi-skilled labourers in manufacturing, the tender notes.Most producers are home-grown and have strong engineering design capabilities, especially in software and systems development, which is a critical element in the manufacturing of decoders, it adds.
The department's Broadcasting Digital Migration policy, which was amended in February, provides that equipment for migration will mostly be sourced from local manufacturers. To meet demand, the industry will have to gear up and invest in production capacities. Local manufacture also presents opportunities in other supporting industries, such as plastics, metals and packaging materials.
Communications minister Dina Pule has said migration is also expected to facilitate the entry of about 1 000 small and medium companies into the electronics manufacturing sector. About 23 500 jobs should be created in the set-top box supply chain.
The DOC's document notes there are enough existing manufacturers with varying degrees of expertise, and that new companies may enter the market, opening up opportunities to grow and transform the sector through increased participation of historically-disadvantaged people.
About 36 local companies recently responded to the DOC's request for information to manufacture subsidised STBs, as SA gets ready to turn on digital television.
Bids will also be evaluated based on job creation resulting from the awarding of the contract, small business promotion, transfer of technology and intellectual property rights to small businesses, and capacity-building in SA that focuses on value-added activities.
The DOC will enter into contracts with multiple service providers, which must each preferably be a single entity, with other necessary expertise secured through sub-contracting or a joint venture.
Altech UEC MD Rodger Warren says the tender is the latest big milestone in migration post the announcement, in January last year, that SA would use the upgraded European DVB-T2 standard. The first milestone was the release, this year, of the South African Bureau of Standards (SABS) standards.
Warren notes that the tender lays out all the requirements for production, and clarifies distribution of subsidised boxes, which will be handled through the South African Post Office. He adds that the need for local content is also specified through an equation.
A minimum amount of local content forms part of the evaluation criteria, and international firms that bid will have to agree to an offset programme in terms of trade and industry's National Industrial Participation Programme if the contract award is more than $10 million.
Over the next few years, the tender should stimulate SA's electronics manufacturing industry and lead to job creation in the value chain, Warren adds. He says this will include employment opportunities in related industries, such as installation.
The deadline for submission of written questions is 29 August and proposals need to be lodged by 11am on 31 August.
DiViTech COO Bertus Bresler has said it will take three months for components to arrive in SA once they have been ordered, meaning there is only a slim chance that a small number of boxes will be on shelves in December.
Set-top box manufacturers that are not close to a final box design will likely have boxes on shelves by April, at the earliest, he noted.
Bids will be evaluated based on technical and functionality scores, which will be based on experience in STB and electronics manufacturing, manufacturing facility and capacity, logistics, warranties and financial strength.
The boxes need to comply with the SABS standards, control security requirements, user interface requirements, as well as tuning and audio video requirements, among others. The decoders also need fully functional USB 2 ports for external communications.
Including a USB port makes it possible for about another 20 million South Africans to connect to the Internet, as the boxes will be able to act as modems for dongles.
Copyright of documents, electronic aids and software programs developed as part of the tender will belong to the department.
- http://www.itweb.co.za/index.php?option=com_content&view=article&id=57346:boost-for-flagging electronics-sector&catid=65&Itemid=132
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