Although several other African countries – including Rwanda and Tanzania – have migrated to digital and switched off their analogue signals, they work on a subscription model, so consumers have to pay.
The Nigerian government, though, is following the Freeview model pioneered in Britain, and is aiming to get 30 channels into 20m homes via subsidised digital set-top boxes that cost $7.50 (£5.70) each. Viewers will only have to pay for the boxes and a licence fee of $5 a year.
Because about 16 digital channels can fit in the space of an old analogue one, this will mean that a spectrum worth about $1bn is freed up. The government plans to sell it to mobile phone companies to feed Nigerians’ growing appetite for 3G and 4G.
The cost of subsidising the boxes and installing transmitters across the country is about $500m, which leaves another $500m profit. Nigeria needs this money to plug the holes in its budget caused by low oil prices and production, the latter caused by armed groups blowing up its pipelines.
“It’s a well-costed model, and the Nigerian government knows it works because they’ve already sold off some spectrum to MTN [a South Africa-based mobile telecoms firm] for $170m, ” said Nick Markham, the chairman of Inview Technology, the British company launching FreeTV in Nigeria. “So basically there’s a payback, and this is what we’re telling all the different African governments.”
Inview is close to persuading Ghana, the Democratic Republic of the Congo and Ivory Coast to follow suit. There should be a domino effect, as digital signals in countries that make the switch interfere with their neighbours’ analogue signals.
The main competition, StarTimes, is Chinese, but it works differently. It offers African governments cheap loans in return for control of the television service under a pay-TV model.
FreeTV did its first launch in Jos, a city in central Nigeria, in May, and in November the analogue signal will be switched off.
There should be a knock-on effect on the local film industry – Markham estimated that Nollywood studios, which at the moment struggle with piracy, would get an extra $250m a year.
Some Nigerians have questioned whether the country will really be able to meet its target of switching off the analogue signal by next year, pointing out that the government has already missed targets in 2012 and 2015.
But others say it could be “the new telecoms” industry, as its 30m households means Nigeria is a bigger market than any of the countries that currently have free digital television. They welcome the potential jobs in manufacturing the boxes, advertising and TV production.