Further supplementary memorandum from
Digital UK
The Committee has raised some questions about
the facts of the Ferryside trial conducted in early 2005. Emyr
Byron Hughes, the Ferryside Project Manager, addressed these issues
in our lunch presentation of 15 November. Digital UK has drafted
this note with Emyr's support to clarify some of the issues raised,
particularly the need for new aerials and the cost of the trial.
ABOUT FERRYSIDE
— 475 homes—c 1,200 people in
Ferryside and Llansteffan.
— Profile slightly older than UK average,
with higher proportion of ill and disabled.
EQUIPMENT
— Equipment was subsidised:
— Choice of five set-top boxes.
— Could upgrade to iDTV or other platforms
to equivalent cost.
— But all aerial work was paid for
by householders.
CONVERSION
— 80% installed with no assistance.
— 20% needed some help or advice—but
the helpline satisfied most.
— c 5% needed significant help and
home visits.
AERIALS
— The "45%" of households
needing new aerials is an incorrect reading of the Ferryside report.
— 23% of homes either moved their aerial
round, or in some cases installed a new aerial, in order to receive
from the Ferryside transmitter and so become part of the trial
area. These homes should be discounted as they only did work in
order to take advantage of the trial.
— 22% of homes carried out some remedial
work on their aerial installation or connecting cables.
— Of the 22% who carried out some work
on their aerial, some needed to change or alter their rooftop
installation; others simply needed to replace the new cables between
the wall and the TV.
— The split was not measured, but it
is thought that most had cable problems rather than aerial problems,
so approximately 10% of households needed new aerials—a
figure which is consistent with Ofcom's estimate in its "Cost
and Energy Report" (8 November 2005) that 10% of households
might need new aerials at switchover.
— All aerial work was done before the
analogue signal was switched off, and no one lost reception at
switchover.
SATISFACTION
— 87% responded to the questionnaire
at the end of the trial—99.2% voted in favour of keeping
digital.
COSTS
— The project cost a total of £865,000
and was funded by DCMS, DTI and, to a lesser extent, by the broadcasters.
— The figure of "£2,000"
per household has been arrived at simply by dividing the project
cost by the number of households (475) in the trial.
— It has been suggested in earlier
evidence given to the Committee that £2,000 was the cost
of providing technical assistance. This is not the case, since
the project included other costs. As detailed below, the cost
of consumer equipment was £340 per household, and the average
cost of installation support and the call centre £180 per
household. The main element of the trial costs was the conversion
of the Ferryside transmitter.
— In any case, the project cost does
not provide a guide to the cost of actual switchover since:
(i) As a trial, there was a substantial
investment in research;
(ii) The trial was not able to take advantage
of the economies of scale that will come into play in switchover
proper; and
(iii) The cost of consumer equipment has
already fallen since the Ferryside trial, and is expected to fall
further.
— Many elements of the project were
provided under commercial contract, so precise costs were not
provided in the Ferryside report.
— We do know, however, that there were
five categories of cost, as follows:
1. Planning and Project Management
— Planning and management was provided
by DCMS and DTI and amounted to approximately 10% of project costs.
2. Installation Support and Call Centre
— Support costs were also approximately
10% of project costs, or around £180 per household.
3. Transmitter Conversion
— More than half of the project cost
was for the conversion of the Ferryside transmitter. This is a
fixed cost and would have been similar had the transmitter served
several thousand homes.
4. Domestic Equipment
— Trial homes had, on average, 2.75
TVs and 1.5 VCRs (higher than the UK average). All equipment was
converted, at a cost of £80 per unit; or £340 per home.
For all 475 homes this amounted to £160,000, or approximately
18% of the total project cost.
— Since the trial, prices have come
down, and are expected to fall further.
— In the Bolton trial, for example,
the average unit cost is closer to £50.
— At switchover, Ofcom expects DTT
set-top boxes to cost £26 and digital recorders £80
(Ofcom Cost and Energy Report, 8 November 2005); and the cost
of converting a household to range from £26 to £153.
5. Research
— Since Ferryside was a trial, provision
was made for a substantial research budget, which comprised approximately
10% of the project budget.
If you have any further questions on this or
other topics, please feel free to contact me.
6 December 2005
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