News / Local
Zimbabwe Digitalisation: The full story
28 Sep 2015 at 10:09hrs | Views
Zimbabwe has been preparing to make the inevitable switch from analogue broadcasting to digital terrestrial television in keeping with International Telecommunication Union requirements. We now have satellite access, while work is underway to convert universal presence of the signal to universal access.
Kuda Bwititi and Lincoln Towindo spoke to Secretary for Information, Media and Broadcasting Services George Charamba on these developments. We publish Charamba's interventions below.
***
The new thing is we have now finished installing the uplink facility and the head-end, and are now ready to test those pieces of equipment.
Your uplink is what sends signals from the studio to the satellite so that the satellite bounces it back to earth for broadcast into households.
On September 17, 2015, the Broadcasting Authority of Zimbabwe - acting through its bank - paid for transponder space to a satellite agent called Eutelsat - European Telecom Satellite - and the payment is to the tune of US$900 000, which means we have booked transponder space for a year. That's how expensive it is.
This means we can now use satellite for broadcast purposes continuously for a whole year. And that means we can now test the equipment we have installed. As soon as we are done with some transmitter stations like the one in Harare, the five transmitters we were working on can be activated - if we so wish.
That is to say (the system) can be activated shortly, once we have done the relevant tests as we now have satellite access.
That gives you an idea of what it will cost Zimbabwe to continue to use satellite for broadcasting. We will continue having to pay as much.
For first-time users, there is a discount; which is what has brought the figure down to US$900 000.
However, going forward, the actual price will be US$1,2 million a year. This is why we are also exploring the use of optic fibre. Then it means we are distributing via fibre optic cable as opposed to satellite.
As far as we are concerned, these two systems will be complementary. We used to book satellite space for specific events. For instance, we used to hire the service from South Africa when we had galas. Now it is permanent: The issue of our signal touching every corner of the country is no longer a problem. It is now guaranteed. With that capacity, we can now boast of universal presence of the signal.
The real challenge now is to convert universal presence into universal access. Potentially, the signal is now countrywide. When we are talking about signals, we are talking about programmes but this is now just an engineering term I am using.
So the signal is now available. The key thing is now to make it accessible universally. This brings into the picture the issue of set top boxes (STBs) - which is essentially your decoder.
That is our next challenge. I am fresh from China, together with the BAZ chief executive (Mr Obert Muganyura), where we toured a potential supplier of STBs who was chosen by the contractor - Huawei. The supplier requires a down payment of US$1,8 million to start manufacturing and the lead time between manufacturing and supply is three months.
We have placed an order of 400 000 STBs for a start, which will translate to US$18 million for the supply of all units. That is why we need that US$1,8 million deposit. That is our immediate challenge now that we have paid for satellite access. Those STBs must be in the country before we launch the service. We have enough STBs to conduct a test run, but that is only for limited distribution.
The 400 000 STBs will now be made available to the general public because when we go digital, you can't use your ordinary antenna to get ZBC. Broadcasting becomes a subscription service. You will now have to pay to get access. That's where the issue of accessibility versus access comes into play.
If you don't have the gadget, you won't get the signal. If you have not paid subscriptions, you might have the gadget but will not be able to watch the programme.
The same way you are paying for DSTV, the same way you are paying for Zesa is exactly the same way you will be paying for television service. So, it is very important that we raise the deposit money for the STBs so that they can start arriving into the country. Then there is a whole area surrounding distribution of the STBs. How do you get decoders to the rural areas? What will be the price?
Are we subsidising or are we giving them free of charge or at market value? What is the network for distribution? You will notice that we are stopping any other entrepreneur from bringing in STBs at this stage because the Government intends to subsidise the price of the 400 000 units.
So, if you allow them to come into the country with STBs, you are now allowing arbitrage - a situation where one buys a subsidised STB and then goes on to sell it at market price.
It is important that we have a controlled supply of STBs until we have achieved the primary objective of distributing the 400 000 STBs in a way that recognises affordability. You might ask how we plan to stop entrepreneurs from bringing in their own STBs, because one could just fly to China and get them.
There is a difference between the system we will be using and the ordinary system in the sense that this is not an open system. It is called conditional access. This means you may bring in your own STB, but it will not be able to get the signal unless we have enabled it. So, it is not any STB that will work here, it has to have a chip supplied by the contractor to insert into the STB so that it can connect with the head-end.
If people start importing their own STBs, they will be surprised that the units may not have the facility to connect with our system.
Why we tied the first 400 000 STBs to the contractor? Because in the event that we have problems with the system in future, the contractor could turn around and blame it on our supplier of STBs.
We then decided that in order to assess the functionality of the system we are installing, let the contractor source the STBs.
That was a very important issue because even DSTV had a similar problem sometime back when they released a decoder that was deemed weak and was soon pirated. Then they had to change. Even now, you notice that they are having to change their decoders every other two years, rendering the old ones effectual, at a cost to the customer. So, you see?
We have a very big challenge ahead of us. We also need to ensure the contractor is reliable to the extent that we know he will not clandestinely sell the conditional access code to a third party. And we have to continue changing the software as there is always the risk of losing money to pirates.
Funding
The original plan was that we auction frequency spectrum (digital dividend) that would become available upon completion of the process. This is a band of frequencies which would be rendered superfluous or more than necessary to our broadcasting needs. The International Telecommunication Union directed us to release that band to a cellular service. Netone got those frequencies for US$200 million, that's the market value.
As you are aware, NetOne are in the middle of upgrading their system. They have been struggling to raise the required deposit of US$4 million.
Our expectation was that by this time, money would be flowing from NetOne to the Reserve Bank of Zimbabwe, to BAZ and then to the contractor.
But to ensure there was not going to be interference in the flow of resources, Government had instructed the Ministry of Finance to make the money required for digitalisation available upfront as long as NetOne will be able to pay consistently.
So, we were going to have an advance payment for all our requirements from the US$200 million while Netone will be paying back in tranches.
NetOne was then asked how much deposit they would like to pay upfront and they settled for two percent of the US$200 million.
They have not been able to raise it. Now because of that, it means the transaction around the frequencies has not gone through and it means the formula that incorporates NetOne is no longer working.
We have since reported back to Government the collapse of the initial arrangement. As a result, Government has decided to take over the whole project, placing it under the Public Sector Investment Programme (PSIP). That means Government is raising money directly for the digitalisation project.
And last week, it raised US$5 million, which has since been released to BAZ through its bank. From that US$5 million, US$900 000 has gone towards paying for satellite services. US$4,1 million has gone towards paying the contractor.
To date, Government has made available US$19 million to Huawei.
US$3 million went to local contractors, principally the District Development Fund - which has been doing site preparation - and Zesa, which has been pulling power to the site. This means we have spent about US$22 million on the project. The financial arrangement is as follows:
The Ministry of Finance, through the RBZ, raises resources for the project.
The resources are put into CBZ Bank - earmarked for BAZ. BAZ does not access that money, it never touches a cent of that money. It submits invoices from the contractors to RBZ, which, in turn, forwards those invoices to CBZ for payment whether to Huawei or Zesa. None of our officials handles money on that project.
The only little money that BAZ handles has to do with administrative and supervisory expenses, like when staff goes for site visits or when the Secretary and executives from ZBC, Transmedia and BAZ go on tours to assess progress or when we go out of the country to meet with subcontractors.
This is where we say our project is unique from all Government projects where money literally resides in ministries or agencies. In our case, money only exchanges hands between the two banks. Our job is just to give instruction through invoice systems and we have found that very important. It removes all problems with corruption and controversy.
Project Background
Our first communication in this project was with a Chinese company called Star Times Communications. You might be aware that this is the company doing digitalisation in some Sadc countries as well as in East and West Africa. They did a major digitalisation project in Tanzania. We differed on a few key principles. First, they wanted to own infrastructure. They also wanted us to receive head-end services from Tanzania, which means they would only set up a small receiving dish just like the one DSTV has in the country. DSTV has no infrastructure in Zimbabwe, but we are receiving the signal from Randburg, South Africa.
We resented that on the basis that they did not want to invest in Zimbabwe, but to exploit the infrastructure they had already invested in Tanzania. In that case, we would become a broadcast subsidiary, in engineering terms, of Tanzania. Another area we differed on was that of shareholding. They wanted 60 percent of the cake and that meant 60 percent of all subscription fees going out of the country.
We also had approaches from MultiChoice, South Africa. MultiChoice South Africa differed with us again on two grounds. One was that they did not want to digitalise the whole country, but select urban areas where the returns were healthy. It was a commercial proposition. So, they wanted to go into areas where there is a high density of subscribers. They were targeting Harare, Bulawayo, Gweru, Mutare and Masvingo only.
They told us the Government must roll out the programme for the rest of the country on its own. In essence, this was a commercial venture which was going to have the effect of creaming off money out of the country - cherry picking from lucrative areas. The second area of difference was over shareholding since this was going to be a joint venture.
They wanted 60 percent for themselves, 10 percent for their local agent and then 30 percent for the Government. We were going to be a minority shareholder in our country and in a business powered by Zimbabweans as subscribers. The ministry came under tremendous pressure from powerful quarters to pass this deal with all its defects. But the deal fell through all the same.
Turf wars
Everyone thought the US$200 million (the value of the digital dividend) was going to be parcelled between ZBC and Transmedia.
In their minds, the boards and management at ZBC and Transmedia thought the money would be split between them.
So, there was frenetic effort to control the process in a way that imperilled the project. We needed an integrator who would make the whole thing seamless.
That is why we picked the regulator - BAZ who is above the bickering of individual departments - to oversee the project with a bird's eye view.
That is how we got BAZ to take charge. We went further. We created a group of engineers with an orientation completely different from the stock we had in our departments who had a narrow view of the broadcasting process.
Some were versed in broadcasting from the studios while others were versed in transmission. What we wanted was a new engineer with a vision that encompassed both aspects. So we took engineers from both ZBC and Transmedia and attached them to the project - freed from their actual homes. We didn't want their management to give them orders.
Their orders would come from the contractor, working together with project implementer - BAZ. If we hadn't done that, we would have had a disaster. There was so much tension, senior managers from both sides would not even see eye to eye because they thought there was a lot of money to be made. But the moment they realised that there was no cent which was going to be handled by any one of us, order prevailed.
To this day, it's smooth sailing because they know that no one can have his hands on the money. My hope is that I can offer a model of project implementation to the total experience of the Government. Because this is the first time we are having a project which is controversy-free, but which is also moving within timelines given. More importantly, another key element of the model is that we have used the project to power our sister departments. DDF was on the verge of collapsing, but we raised them through subcontracting them.
Zesa now has an expanded grid, thanks to us. We are hoping to do the same with TelOne. So, really, our contractors have been Government agencies, which means Government money has been ploughed back into Government institutions. That integrated approach is what we offer to Government as a new experience to project management.
Kuda Bwititi and Lincoln Towindo spoke to Secretary for Information, Media and Broadcasting Services George Charamba on these developments. We publish Charamba's interventions below.
***
The new thing is we have now finished installing the uplink facility and the head-end, and are now ready to test those pieces of equipment.
Your uplink is what sends signals from the studio to the satellite so that the satellite bounces it back to earth for broadcast into households.
On September 17, 2015, the Broadcasting Authority of Zimbabwe - acting through its bank - paid for transponder space to a satellite agent called Eutelsat - European Telecom Satellite - and the payment is to the tune of US$900 000, which means we have booked transponder space for a year. That's how expensive it is.
This means we can now use satellite for broadcast purposes continuously for a whole year. And that means we can now test the equipment we have installed. As soon as we are done with some transmitter stations like the one in Harare, the five transmitters we were working on can be activated - if we so wish.
That is to say (the system) can be activated shortly, once we have done the relevant tests as we now have satellite access.
That gives you an idea of what it will cost Zimbabwe to continue to use satellite for broadcasting. We will continue having to pay as much.
For first-time users, there is a discount; which is what has brought the figure down to US$900 000.
However, going forward, the actual price will be US$1,2 million a year. This is why we are also exploring the use of optic fibre. Then it means we are distributing via fibre optic cable as opposed to satellite.
As far as we are concerned, these two systems will be complementary. We used to book satellite space for specific events. For instance, we used to hire the service from South Africa when we had galas. Now it is permanent: The issue of our signal touching every corner of the country is no longer a problem. It is now guaranteed. With that capacity, we can now boast of universal presence of the signal.
The real challenge now is to convert universal presence into universal access. Potentially, the signal is now countrywide. When we are talking about signals, we are talking about programmes but this is now just an engineering term I am using.
So the signal is now available. The key thing is now to make it accessible universally. This brings into the picture the issue of set top boxes (STBs) - which is essentially your decoder.
That is our next challenge. I am fresh from China, together with the BAZ chief executive (Mr Obert Muganyura), where we toured a potential supplier of STBs who was chosen by the contractor - Huawei. The supplier requires a down payment of US$1,8 million to start manufacturing and the lead time between manufacturing and supply is three months.
We have placed an order of 400 000 STBs for a start, which will translate to US$18 million for the supply of all units. That is why we need that US$1,8 million deposit. That is our immediate challenge now that we have paid for satellite access. Those STBs must be in the country before we launch the service. We have enough STBs to conduct a test run, but that is only for limited distribution.
The 400 000 STBs will now be made available to the general public because when we go digital, you can't use your ordinary antenna to get ZBC. Broadcasting becomes a subscription service. You will now have to pay to get access. That's where the issue of accessibility versus access comes into play.
If you don't have the gadget, you won't get the signal. If you have not paid subscriptions, you might have the gadget but will not be able to watch the programme.
The same way you are paying for DSTV, the same way you are paying for Zesa is exactly the same way you will be paying for television service. So, it is very important that we raise the deposit money for the STBs so that they can start arriving into the country. Then there is a whole area surrounding distribution of the STBs. How do you get decoders to the rural areas? What will be the price?
Are we subsidising or are we giving them free of charge or at market value? What is the network for distribution? You will notice that we are stopping any other entrepreneur from bringing in STBs at this stage because the Government intends to subsidise the price of the 400 000 units.
So, if you allow them to come into the country with STBs, you are now allowing arbitrage - a situation where one buys a subsidised STB and then goes on to sell it at market price.
It is important that we have a controlled supply of STBs until we have achieved the primary objective of distributing the 400 000 STBs in a way that recognises affordability. You might ask how we plan to stop entrepreneurs from bringing in their own STBs, because one could just fly to China and get them.
There is a difference between the system we will be using and the ordinary system in the sense that this is not an open system. It is called conditional access. This means you may bring in your own STB, but it will not be able to get the signal unless we have enabled it. So, it is not any STB that will work here, it has to have a chip supplied by the contractor to insert into the STB so that it can connect with the head-end.
If people start importing their own STBs, they will be surprised that the units may not have the facility to connect with our system.
Why we tied the first 400 000 STBs to the contractor? Because in the event that we have problems with the system in future, the contractor could turn around and blame it on our supplier of STBs.
We then decided that in order to assess the functionality of the system we are installing, let the contractor source the STBs.
That was a very important issue because even DSTV had a similar problem sometime back when they released a decoder that was deemed weak and was soon pirated. Then they had to change. Even now, you notice that they are having to change their decoders every other two years, rendering the old ones effectual, at a cost to the customer. So, you see?
We have a very big challenge ahead of us. We also need to ensure the contractor is reliable to the extent that we know he will not clandestinely sell the conditional access code to a third party. And we have to continue changing the software as there is always the risk of losing money to pirates.
Funding
The original plan was that we auction frequency spectrum (digital dividend) that would become available upon completion of the process. This is a band of frequencies which would be rendered superfluous or more than necessary to our broadcasting needs. The International Telecommunication Union directed us to release that band to a cellular service. Netone got those frequencies for US$200 million, that's the market value.
As you are aware, NetOne are in the middle of upgrading their system. They have been struggling to raise the required deposit of US$4 million.
Our expectation was that by this time, money would be flowing from NetOne to the Reserve Bank of Zimbabwe, to BAZ and then to the contractor.
But to ensure there was not going to be interference in the flow of resources, Government had instructed the Ministry of Finance to make the money required for digitalisation available upfront as long as NetOne will be able to pay consistently.
So, we were going to have an advance payment for all our requirements from the US$200 million while Netone will be paying back in tranches.
NetOne was then asked how much deposit they would like to pay upfront and they settled for two percent of the US$200 million.
They have not been able to raise it. Now because of that, it means the transaction around the frequencies has not gone through and it means the formula that incorporates NetOne is no longer working.
We have since reported back to Government the collapse of the initial arrangement. As a result, Government has decided to take over the whole project, placing it under the Public Sector Investment Programme (PSIP). That means Government is raising money directly for the digitalisation project.
And last week, it raised US$5 million, which has since been released to BAZ through its bank. From that US$5 million, US$900 000 has gone towards paying for satellite services. US$4,1 million has gone towards paying the contractor.
To date, Government has made available US$19 million to Huawei.
US$3 million went to local contractors, principally the District Development Fund - which has been doing site preparation - and Zesa, which has been pulling power to the site. This means we have spent about US$22 million on the project. The financial arrangement is as follows:
The Ministry of Finance, through the RBZ, raises resources for the project.
The resources are put into CBZ Bank - earmarked for BAZ. BAZ does not access that money, it never touches a cent of that money. It submits invoices from the contractors to RBZ, which, in turn, forwards those invoices to CBZ for payment whether to Huawei or Zesa. None of our officials handles money on that project.
The only little money that BAZ handles has to do with administrative and supervisory expenses, like when staff goes for site visits or when the Secretary and executives from ZBC, Transmedia and BAZ go on tours to assess progress or when we go out of the country to meet with subcontractors.
This is where we say our project is unique from all Government projects where money literally resides in ministries or agencies. In our case, money only exchanges hands between the two banks. Our job is just to give instruction through invoice systems and we have found that very important. It removes all problems with corruption and controversy.
Project Background
Our first communication in this project was with a Chinese company called Star Times Communications. You might be aware that this is the company doing digitalisation in some Sadc countries as well as in East and West Africa. They did a major digitalisation project in Tanzania. We differed on a few key principles. First, they wanted to own infrastructure. They also wanted us to receive head-end services from Tanzania, which means they would only set up a small receiving dish just like the one DSTV has in the country. DSTV has no infrastructure in Zimbabwe, but we are receiving the signal from Randburg, South Africa.
We resented that on the basis that they did not want to invest in Zimbabwe, but to exploit the infrastructure they had already invested in Tanzania. In that case, we would become a broadcast subsidiary, in engineering terms, of Tanzania. Another area we differed on was that of shareholding. They wanted 60 percent of the cake and that meant 60 percent of all subscription fees going out of the country.
We also had approaches from MultiChoice, South Africa. MultiChoice South Africa differed with us again on two grounds. One was that they did not want to digitalise the whole country, but select urban areas where the returns were healthy. It was a commercial proposition. So, they wanted to go into areas where there is a high density of subscribers. They were targeting Harare, Bulawayo, Gweru, Mutare and Masvingo only.
They told us the Government must roll out the programme for the rest of the country on its own. In essence, this was a commercial venture which was going to have the effect of creaming off money out of the country - cherry picking from lucrative areas. The second area of difference was over shareholding since this was going to be a joint venture.
They wanted 60 percent for themselves, 10 percent for their local agent and then 30 percent for the Government. We were going to be a minority shareholder in our country and in a business powered by Zimbabweans as subscribers. The ministry came under tremendous pressure from powerful quarters to pass this deal with all its defects. But the deal fell through all the same.
Turf wars
Everyone thought the US$200 million (the value of the digital dividend) was going to be parcelled between ZBC and Transmedia.
In their minds, the boards and management at ZBC and Transmedia thought the money would be split between them.
So, there was frenetic effort to control the process in a way that imperilled the project. We needed an integrator who would make the whole thing seamless.
That is why we picked the regulator - BAZ who is above the bickering of individual departments - to oversee the project with a bird's eye view.
That is how we got BAZ to take charge. We went further. We created a group of engineers with an orientation completely different from the stock we had in our departments who had a narrow view of the broadcasting process.
Some were versed in broadcasting from the studios while others were versed in transmission. What we wanted was a new engineer with a vision that encompassed both aspects. So we took engineers from both ZBC and Transmedia and attached them to the project - freed from their actual homes. We didn't want their management to give them orders.
Their orders would come from the contractor, working together with project implementer - BAZ. If we hadn't done that, we would have had a disaster. There was so much tension, senior managers from both sides would not even see eye to eye because they thought there was a lot of money to be made. But the moment they realised that there was no cent which was going to be handled by any one of us, order prevailed.
To this day, it's smooth sailing because they know that no one can have his hands on the money. My hope is that I can offer a model of project implementation to the total experience of the Government. Because this is the first time we are having a project which is controversy-free, but which is also moving within timelines given. More importantly, another key element of the model is that we have used the project to power our sister departments. DDF was on the verge of collapsing, but we raised them through subcontracting them.
Zesa now has an expanded grid, thanks to us. We are hoping to do the same with TelOne. So, really, our contractors have been Government agencies, which means Government money has been ploughed back into Government institutions. That integrated approach is what we offer to Government as a new experience to project management.
Source - The Sunday Mail
