Hardware boom comes with PH shift to digital TV

BIG SCREENS. With millions of Filipino households migrating to digital TV, the brown goods industry has been seeing 'rapid' growth in sales for the past years.

Photo from iStock

MANILA, Philippines – The biggest change in Philippine television is set to come, when all broadcasters will need to shut down their analog airwaves and shift to Japan's digital terrestrial television broadcasting (DTTB) technology in 2023. This migration is spurring revenue growth for the hardware industry.

With about 17 million Filipino households migrating to digital TV, the brown goods industry has been seeing a "rapid" growth in sales for the past years, said the president of Philippine Appliance Industry Association Incorporated (PAIA).

PAIA president Peter Villanueva told Rappler that with regards to the brown goods industry, the "huge growth in LCD sales" has been happening in the past 4 years. (READ: Part 1: PH telcos, TV networks ride double-edged digital wave)

Brown goods are relatively light electronic consumer durables such as TVs, radios, digital media players, and computers.

"Right now, we are looking at the replacement market or the new family segment as the growth drivers for the coming years. There will still be a decent growth for the industry," Villanueva said on the sidelines of Department of Information and Communications Technology's (DICT) Digital TV Summit 2017 in Quezon City on Tuesday, February 14.

"Remember, in one house, they have more than one TV. We, in the hardware, are expecting growth from that replacement. From our picture tube television, right now, you can only enjoy total television entertainment through LCD or LED TVs," said Villanueva, who also serves as the president of Sharp Philippines Corporation.

DICT chief Salalima with ABS, GMA, TV5 execs do ceremonial shift to digital TV5 @rapplerdotcom pic.twitter.com/aZRkGZIMqj — Chrisee V. Dela Paz (@chriseedelapaz) February 14, 2017

64 years since first TV broadcast

Television was introduced in the Philippines in 1953, with the opening of DZAQ-TV Channel 3 of Alto Broadcasting System in Manila, which is now called ABS-CBN Corporation.

After 64 years, the Philippine telecommunications regulator finally cleared the way for the country's shift to the Japanese-standard DTTB system.

Aside from clearer video and audio, DICT Secretary Rodolfo Salalima told reporters that the DTTB technology has an integrated early warning mechanism in times of natural disasters such as tsunami, typhoon, and earthquakes.

All PH networks will shut down their analog TVs by 2023 @rapplerdotcom pic.twitter.com/qyPV3H5nDm — Chrisee V. Dela Paz (@chriseedelapaz) February 14, 2017

In December 2014, the National Telecommunications Commission (NTC) issued Memorandum Circular No. 07-12-2014, requiring broadcasters to simulcast their digital TV and analog services within a year from grant of authority to provide such service.

Smaller broadcasters find it tough

NTC Deputy Commissioner Edgardo Cabarios said the total shut-off of analog TV services has been moved to 2023 from an earlier target of 2019, as "smaller broadcasters find it costly to migrate to the new Japanese standard."

"The leading networks have no problem with that (shifting to digital TV). But how about the smaller ones? We should take into consideration their plight. Their ability for them to roll out digital infrastructure," the NTC official said.

According to Cabarios, the initial investment of small broadcasters for the digital TV shift is "around P50 million, which is already huge for these companies."

He added that his office is looking at subsidizing 5% of smaller firms' capital expenditures in shifting to digital TV, but clarified that this will still be studied by the concerned agencies.

While the smaller firms are finding it difficult to migrate, the top 3 broadcast companies have already begun their migration to DTTB technology.

ABS-CBN, GMA Network Incorporated, and TV5 have earmarked between P400 million and P2 billion to finance the digital shift.

"We are working hand-in-hand with the government. We are still in the testing stage. First phase will be Metro Manila. Admittedly, the two (ABS-CBN and GMA) are ahead of us. We are going to approach the shift in a slightly different way," TV5 president and CEO Vincent "Chot" Reyes said on the sidelines of the Digital TV Summit.

For GMA executive vice president and chief financial officer Felipe Yalong, the network targets to commercially roll out its digital TV in Metro Manila within the year.

"We don't have any specific plan yet. What's definite is that we will be able to come up with our DTT signal hopefully within the year," Yalong said on the sidelines of the event.

ABS-CBN, meanwhile, launched its DTT service in February 2015, selling over two million TVplus units as of November 2016.

For Shigeki Suzuki, Vice Minister for Policy Coordination at Japan's Ministry of Internal Affairs and Communications, migrating to digital TV "is not easy."

"Digital TV migration requires the cooperation of all stakeholders. Japan will continue to be a partner of the Philippines. We will help in the country's smooth transition to DTTB," Suzuki said. – Rappler.com