The ongoing worldwide transition to digital television, away from analog broadcast, is continuing to drive sales of set-top boxes and digital tuners, despite market saturation in developed nations.

According to ABI Research, even though North America and Western Europe are non-players in that trend now—both markets had effectively made the transition to digital terrestrial television (DTT) broadcast by the end of 2012—there is still plenty of opportunity for STB manufacturers in the next two years.

The ITU and a number of countries in Eastern Europe and Middle-East Africa are spinning toward a deadline of 2015 to make their transitions. The ITU established 2015 as a milestone year for starting digital services, and noted that different countries are in different stages of migration.

“Some countries are well advanced in the process, while others are still at the beginning or have not yet started,” the ITU noted.

For example, Jordan falls into the advanced group, and has arranged for the digital transition in two stages. The first stage, covering the main television broadcasting stations (11 cities), was completed at the end of 2012. The second stage, covering rural and remote areas, will be implemented in 2013–2015.

“After the first stage, there will be a one-year overlap between digital and analogue broadcasting to allow end users to upgrade their receivers,” the ITU said. “Jordan Radio and Television is responsible for the transition, and a budget has been allocated.”

The role of government incentives will be key in the migration, ABI said. “Integrated televisions will certainly play a role in digitization, but set-top boxes, by necessity, are still the driver used to fully satisfy most [analog shutoff] (ASO) goals,” said ABI practice director Sam Rosen. “Proactive work from government agencies in the form of subsidies and consumer education remain vital components to a successful ASO, best suiting the lower cost STB as the digitization vehicle of choice. After 2015 we do expect demand for DTT set-top boxes to decline, but circumstances beyond ASOs could shift the outlook higher.”

Pay Terrestrial DTT operators are doing their part as well, looking to subsidize the price of free-to-air STBs in order to gain subscribers. For instance, in sub-Saharan Africa, both StarTimes and GoTV (a service of Naspers (News - Alert), parent of MultiChoice) have launched Pay DTT platforms using a subsidized set-top box selling for about $35, while free-to-air boxes sell for approximately $60.

While most countries have settled on a DTT technology, the path to digital is less consistent in other regions where multiple DTT technologies are present and future analog shutoffs span a wide timeframe (2015 to 2020s). A number of countries in these regions are starting with DVB-T2, leapfrogging established DVB-T technology, ABI noted.

“If remaining analog shutoff timelines go largely as planned, we expect over 18 million DVB-T2 STBs will ship in 2015,” said senior ABI analyst Michael Inouye. “Other potential factors, like spectrum reallocation for mobile broadband in Western Europe, might increase the demand for DVB-T2 boxes, but this likely won’t be a significant factor until the latter half, if not past the 2018 forecasting window.”