What’s Ahead of Frontier Markets in Analogue to Digital Conversion?

Most of the developed world has successfully transitioned from analogue to digital television in the past couple of decades. As developing countries move to catch up, according to Giles Tanner, General Manager in the Communications Infrastructure Division of the Australian Communications and Media Authority*, they are in a unique position to leapfrog the early movers by taking advantage of lessons learned and technological advances made during the first wave of conversions in the West.

Based on his deep involvement in Australia’s digitization process from the late 90s to early 2000s, Tanner explained the conversion process and elaborated on the opportunity in a recent chat with OnFrontiers.

*Views below are Giles Tanner’s and do not reflect those of the Australian Communications and Media Authority.

Analogue to digital: an attractive investment  

Analogue TV is a vital service in many countries – coverage in many developing countries is ubiquitous. But Tanner points out that analogue technology uses a lot of very valuable spectrum to transmit a small number of services – essentially, digital TV offers a lot more high quality television using less radio spectrum.

Tanner notes that digital TV has the added benefit of being able to operate at the same time as analogue channels – because it can make use of the guard bands between analogue TV channels, the technology is beautifully designed for smooth conversion after a period of simultaneous transmission. This is crucial when you are converting a population that may be perfectly content with analogue TV. Then at the end of the process, when you switch off analogue and commit fully to digital, by reorganizing the digital channels you’re able to free up a ‘digital dividend’ in the form of spectrum optimized for mobile broadband services – and hopefully recoup some of the costs of the conversion process.

It’s also interesting to note, according to Tanner, that in many countries, digital technology has acted as a lifeline for analogue TV – it has allowed the analogue sector to modernize its product offering and to keep up with newer media in countries where people love their free TV. Better picture quality and features like multi-channels and high-definition help to ensure customer retention for free TV.

But this is not the only model available, with a few countries seeking to use the higher spectrum productivity of digital to introduce encrypted pay TV channels.

Developing countries poised for success

 Until recently, Tanner explains, the value proposition for digital conversion just didn’t stack up for most developing countries. But a country that begins the conversion process now has a big opportunity to learn from the early movers.

It’s not just that pioneering nations have a wealth of learnings to share – rapid evolution of digital TV standards means that countries making the conversion now have an opportunity to overtake the early movers and go straight to better, more efficient standards, meaning the digital TV value proposition can be so much more compelling. Similarly, international harmonization of mobile broadband spectrum in recent years has meant that countries now know what digital dividend ‘target’ they should aim for.

What challenges do developing countries face that will factor into the ultimate success of a conversion?

Many developing countries are keen to use the added efficiency offered by the digital technology, but, Tanner cautions, as in any market, it’s important for operators to be wary of the risks and challenges.

There are a number of things to get right along the way – for example, the right technical standards need to be chosen and there is a level of international coordination necessary among countries bordering one another, as digital networks often overlap geographical borders.

The success of a conversion in a given country will also depend largely on policy formulas in place prior to and during the conversion process. Africa is one continent where a number of nations are yet to find a policy formula to achieve a successful analogue switch-off – investors must be identified, revenue models must be attractive enough to investors and governments may need to help in a number of ways.

Finally, consumers must be primed for conversion. Viewers must be up to speed, Tanner says – there’s no use in turning off analogue if users haven’t obtained digital receivers.

Other issues for consideration will vary by country. In Australia, for example, people had a very high dependence on free-to-air TV. For most of these viewers, the challenge was to figure out how to make digital television attractive to them – to generate demand – in order to convince viewers that the extra investment in a digital TV would be worth it for them. Mostly this meant creating opportunities for the TV industry to exploit the new medium to the full. But it also entailed direct government assistance: for example, to speed the rollout of digital TV across less profitable regional and remote areas, and to encourage or assist laggard and poorer viewers in digital conversion.

The key question is often how to get viewers to make the investment in digital. Especially in countries with very large poor populations, this isn’t always straightforward.

About the OnFrontiers Expert consulted for this article:

Giles Tanner is General Manager of the Communications Infrastructure Division in the Australian Communications and Media Authority. He has 20+ years of experience in federal communications, with a focus in broadcasting and radiocommunications law and policy. To speak with Giles or similar experts, contact us at hello@onfroniers.com.

About OnFrontiers

To gain additional insights on policy reform, infrastructure, tourism or other opportunities in frontier markets from top industry professionals, contact OnFrontiers today at hello@onfrontiers.com.

Founded in 2014, OnFrontiers is a global advisory network and research firm that provides rapid access to targeted, high quality insights in hard to reach frontier markets.

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