RIO DE JANEIRO — Brazil’s first free-to-air digital TV transmission will begin on Dec. 2 in Sao Paulo during a formal ceremony.

A variation of Japan’s ISDB standard, digital will gradually be extended to the rest of Brazil by 2016 when the analog signal will be turned off.

Despite the heavy investment, free-to-air broadcasters welcome the change to digital as an opportunity to maintain their dominance. They traditionally pocket about 60% of the total ad spend in Brazil.

However, the high cost of equipment may hinder rapid take up. The prices of set-top boxes range from $270 to $600 while the price of ISDB-built-in TVs varies from $4,400 to $ 8,200.

Government officials are considering lowering the taxes on digital equipment to stimulate the transition.

Despite the cost, local manufactures expect to sell between 9.5 million to 17.7 million set-top boxes and digital TV sets from 2008-2010. Some 48 million households have analog TV sets, 92% of the country’s total households.