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Issues In NTA-StarTimes JV Agreement

27 Jan 2013

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Startimes Decoder

By Sunday Adigun
 I was elated and surprised recently when I read in the newspapers that StarTimes, the Chinese-owned and operated pay television company, was launching DVB-T 2 decoders in the Nigerian market. Elated because I am aware that T2 decoder is the latest technology which it has to offer in that area; and surprised that the Chinese company had been selling something less to Nigerians before now.

The decoders StarTimes’ was selling before now use the first generation Digital Video Broadcast Terrestrial technology, which has been phased out in a number of African countries like Kenya, Uganda and Rwanda. These countries, in readiness for the digital migration deadline, have adopted Digital Video Broadcast Terrestrial (DVB-T2), the second generation decoders, as the standard for digital broadcasting. The sale of first generation decoders by StarTimes implies that subscribers may be faced with unpleasant consequences at the expiration of the digital migration deadline. Though an upgrade from DVB-T to DVB-T2 technology is a possibility, attempting to upgrade after the digital switchover may cost subscribers more. DVB-T is not compliant with DVB-T2. This may necessitate a recall of the first generation decoders and a need by subscribers to buy new decoders not long after buying the ones they currently use.
The authorities in Kenya and Uganda have banned the importation of DVB-T, the first generation decoders.

In Uganda, the deadline for a halt to the use of DVB-T expired on 21, December 2012. Dr. Ruhakana Rugunda, Uganda’s ICT minister, was quoted by a daily as warning Ugandans against further purchase of DVB-T (T1) decoders. “Before, you purchase any decoder, inquire which technology it is. If it is DVB-T1, don’t buy or else you stand to lose as the decoder will expire at the end of the year. 
The adoption of DVB-T2 technology means that we must ban the importation and sale of the old technology (DVB-T1). It will affect many people but it is the right thing to do,” Rugunda told Uganda’s Daily Monitor last year. Last July, Kenya, also announced a ban on the importation of the analogue broadcast technology.

In both countries, StarTimes has been accused of flouting the ban on further importation and sale of DVB-T decoders. According to the Uganda Consumers’ Protection Awareness Association (UCPAA), a non-profit consumer rights association, “investigations carried out by the UCPAA in the market and the ongoing advertising subsequent to the announcements indicate that StarTimes continues to sell and distribute DVB-T technology at knockdown prices despite the fact that these STB (Set-Top Boxes) are to be phased out in the near future and will be unable to receive television signals once the UCC sets up its DTT infrastructure, which will support DVB T2 but not DVB T.”
As far back as 2008, Nigeria, according to Engr. Yomi Bolarinwa, NBC Director-General, had committed to the DVB-T2 technology. Yet, when StarTimes kicked off in the country in 2010, it treated the commitment with indifference by selling T-1 decoders.

But why, despite the country’s commitment to T-2 since 2008, did the regulator allow StarTimes to sell first generation decoders to Nigerians? Within the industry, there are suspicions, not exactly implausible, that the regulator has been cowed by the might of NTAStarTV Network.
Naturally, this reinforced the belief that StarTimes  dumped decoders rejected elsewhere on Nigerians.
But that is not the only reason why the StarTimes/NTA alliance could be injurious to Nigeria and Nigerians.

For  some logically obscure reasons, the Joint Venture, JV, agreement between the Nigerian Television Authority, NTA, and Star TV Network Limited has escaped the headlights of public scrutiny. This, inevitably, has granted a free rein to StarTV Network Limited, promoters of StarTimes, a Chinese-owned concern licensed to provide Digital Terrestrial Television, DTT, in Nigeria. The JV agreement produced NTAStarTV Network, in which the NTA has 30 per cent shareholding. This cost the federal government N750million, paid on behalf of the NTA to the NBC, in form of operating licence fee.

The agreement started running on March 1, 2010, initially as a trial, before being fully launched on 29 July 2010, just four months after. But there are issues, which, as I pointed out earlier, are festering because of public disinterest in scrutiny. Closely examined, the NTA is involved in something akin to a master-serf relationship. For one, the purpose of the agreement, according to the website of NTAStarTV Network Limited, is “to provide digital pay television services to Nigerians”. But this is contrary to the what the Federal Government prescribed as mandate of the agreement.

Specifically, the federal government mandated NTAStarTV Network Limited to assist the country in its bid to realise the aims of digital migration, the deadline of which is 1 January 2015.

Though the agreement allows the parties involved to provide part pay TV and part free-to-air services of their DTT platform, NTAStarTV Network only provides pay TV service. A clasping evidence of this is provided by the expiry of subscription. When subscription expires, viewers are immediately disconnected from the payTV platform as well as the free-to-air channels. This way, subscribers’ freedom to information is effectively abridged. Perhaps, coming from China where freedoms are routinely curtailed, StarTimes must think this does not matter. But we are not in China and our strain of democracy, despite its defects, still guarantees the right to information.

Another issue is the promotion of unfair competition. The absence of a local legislation on competition has engendered an anti-competitive spirit. According to the terms of the JV agreement, the NTA is forbidden from entering into any relationship with another broadcaster, satellite or terrestrial, and was compelled to annul those entered into prior to the agreement.

The NTA was also a victim–of its own agreement! On account of its relationship with such broadcasters, it had a steady income stream from monies paid for the shared sites. The annulment of the relationship, naturally, turned off the income tap.

The potential for further erosion of Nigeria’s interest is also contained in the Digital Migration Whitepaper, which many knowledgeable people in the industry say recommends that the government will licence a minimum of two or a maximum of three signal distributors when the transition analogue to digital terrestrial technology begins.

The government has constituted a Digital Implementation Team, which is made up of industry experts and stakeholders in both the private and public sectors. On account of its 157 transmission sites across the country, the NTA has been recommended as the public broadcasting signal distributor. One of the team’s first step may be the ratification of the NTA as the signal distributor. This will make NTA the custodian of all distribution frequencies in the country and operators will have no other option other than to go to the NBC for licensing and the NTA for their respective lashings of frequencies.

Ordinarily, this does not appear inimical. But with the NTA/StarTimes combo in place, the implication may be that the responsibility for a matter as sensitive as broadcasting is effectively in the hands of a Chinese firm. NTA, for instance, is performing no technological role in relation to the Direct Terrestrial Television roll-out, having conceded this to StarTimes.

Also, the NTA, as the public signal distributor, will have almost unlimited control over broadcasters, who will be dependent on it for frequencies. Any operator that shows signs of irritation with the arrangement may have to face grotesque consequences. The dice, as it is, is heavily loaded against other players in the industry.
•Adigun, journalist and public affairs analyst, wrote from Abuja.

Tags: Business, Nigeria, Featured, StarTimes, NTA Stations

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