The experts explain that about 16 digital channels can fit in the space of an old analogue one, which means that a spectrum worth about $1bn will be freed up, which can be sold to mobile phone companies in order to satisfy Nigerians’ growing demand for 3G and 4G. Taking into account the cost of subsidizing the boxes and installing transmitters across Nigeria (approximately $500m), the government can get another $500m profit to plug the holes in its budget caused by low oil prices and production. The authorities believe that this model can work because they’ve already sold off some spectrum to a South Africa-based mobile telecoms company for $170m. Perhaps, Ghana, Congo and Ivory Coast can follow the example of Nigeria. There can be a domino effect, because digital signals in countries that make the switch may interfere with other countries’ analogue signals.
Market experts explained that the main competition is Chinese StarTimes, which has a different business model: it offers African governments cheap lending in return for control of the TV service using a pay-TV model. FreeTV first launched in central Nigeria in May 2016, and it is expected that the analogue signal will be switched off this November.
A knock-on effect on the local movie industry is also expected: it was estimated that Nollywood studios that now struggle with piracy would get an extra $250m a year. Country residents have questioned whether Nigeria will really manage to switch off the analogue signal by 2017, saying that the government has previously missed its targets in 2012 and 2015. On the other hand, others call it “the new telecoms” industry, because the figure of 30m households makes Nigeria a bigger market than any of the countries with free digital TV.