Minister of Communications: Budget Speech


04 Jun 2008



3 June 2008

Honourable Chairperson,
Honourable Cabinet Colleagues,
Honourable Members,
Captains of Industry,
Distinguished Guests,
Ladies and Gentlemen

This budget vote is delivered towards the end of the term of this current government.  We repeat a relevant question that the President asked last year during his State of the Nation Address (SONA) because it seems to be more relevant today than even before.  He asked: “what has happened to the South African mind in the last thirteen (13) years since democracy” and he suggests that, “there may be a reluctance to answer this question because we would shatter the beautiful image of a rainbow nation”. Recent events indicate that our warts have begun to show, the social contradictions of our democracy are clearly evident.

In the last ten (10) years of our democracy, we have seen the longest period of sustained growth. Our sector has contributed significantly though not as optimally as it could, to this growth.  But our growth has not been shared by all.  Many have been left out.
Honourable Chairperson,
The budget vote we deliver today, takes place at a time when our country, our region, the continent and the world are facing enormous challenges of food shortages, oil price escalations, energy problems, education and health challenges which all have impacted on our society and showed up some of our society’s worst elements.

All this happens when we were attempting to meet our Millennium Development Goals of lowering poverty, improving health and access to education and to ICTs.

The Polokwane Conference of the ruling party emphasized the need to improve implementation of the program of social transformation by focusing on food security, job creation, health and education and on Information and Communications Technologies that ensure greater access and social cohesion through entities such as Sentech and SABC. 

Honourable members,
At this historical conjuncture, we have learned numerous lessons and have some valuable experience to enable us to assess our ability to meet the many challenges of our society and to refocus our energies and reprioritize our tasks as government.  Given the challenges of continuing disadvantage of large sections of our people, continuing poverty and illiteracy as well as shortages of skills in crucial areas, we cannot continue doing business as usual.

In reflecting on the last four to ten years, government is considering centrally coordinated planning capacity to harmonize our government system, something the Department of Communications supports. This will help us in acting as one government rather than in silos.  It will ensure that all state owned enterprises are also coordinated into our system of planning and can be capacitated if necessary; and that their skills capacity as well as their organizational and business experience, are harnessed to achieve the goals of a developmental state.  We have in our work demonstrated the advantages of these as will be shown.

Honourable Chairperson,
May month was declared Information Society Month by World Summit on Information Society (W.S.I.S).  We also will report on our work in this regard in this speech.  June month is one in which we remember the role our youth played in our liberation.  For this reason we must strive to make the life of an African child and young person better, both intellectually and emotionally and raise their social self esteem.  A great deal of our work also focuses on Youth Skilling and Empowerment in ICTs.  The Deputy Minister will give more information on this.

Despite a number of things that have happened that may discourage us in charting a future path, there are many more that give us hope and spur us on to put “all hands on deck”, in business unusual mode, to achieve a better
South Africa for all her people.  In the last ten years we have been benchmarked by various international agencies with regard to our policies, laws, regulations, as well as access, uptake and usage of ICTs.  We have been assessed as having made tremendous strides in comparison with other developing countries in terms of policy and legislative and regulatory frameworks.  The Secretary General of the International Telecommunications Union, the United Nation’s specialized agency for ICTs, Dr Hamadoun Toure, said in May 2008 that South Africa has over the past three years been the fastest growing market worldwide, in communications technology and he said the African continent will continue to be an important market in the industry.  The World Economic Forum has been placed higher than India, Brazil and Korea in terms of these policies. 

Honourable members,

With regards to, uptake and usage of, as well as access and the cost to communicate we still face a great challenge.  Mobile penetration for the poorer sections of society, (LSM 1) citizen category surpassed 20% while the middle level (LSM 4) category surpassed 40% in 2007.  This has gone a long way in achieving our socio-economic goal of greater access.  Our goal in making these services universally affordable is yet to be achieved.  Although costs reduced marginally between 2006 and 2007, the cost still remains high. 

The experience of other countries shows that reducing the cost of communications without increasing available infrastructure, will reduce the quality of communications to undesirable levels thus impacting negatively on their growing economy.  Greater investments in infrastructure, open access principles on essential infrastructure and greater but fairer competition on services as well as effective yet flexible regulation, will lead to greater cost benefits and good service. We have committed ourselves, through the government’s economic cluster programme of action  to  benchmarking ourselves against the best with respect to, not only the costs to communicate but also, quality, access to services, high uptake and usage of ICTs as a matter of priority over the next three years.

In a further attempt to bring costs down, the government has approved the building of the African West Coast Cable (A.W.C.C.) undersea cable, with Infraco at the lead and gave support to the NEPADs UhuruNet led by Baharicom as well as the UmojaNet terrestrial project.  Both undersea cables should be ready by May 2010 and will create a sustainable competitive international bandwidth market in
South Africa, the region and the continent and is in line with the President’s SONA statement on operationalizing that project in partnership with other governments and the private sector. 

Following discussions with partners in
Nigeria, UHURUnet is due to be operational by May 2010. Discussions on collaborations with partners in Kenya will lead to the east coast also being completed by the end of 2010. Together with Seacom and EASSy, these initiatives will create a sustainable competitive international bandwidth market in South Africa, the region and the continent and is in line with the President’s SONA statement on operationalizing that project in partnership with other governments and the private sector. 

With the growth of the economy and technological advances made, many opportunities have been created for a variety of policy implementation initiatives to be undertaken.  As the President indicated in his SONA, the Apex Priorities that were identified demanded that all three spheres of government, at both executive and administrative level, had to be mobilized to energize our advances. 


Honourable Chairperson,
We will report in detail on some of the work we have been doing with other National Departments and across all three (3) spheres of government to make inclusive Information Society a reality in
South Africa.  Inclusivity has been our watchword. 

After the World Radio Conference held in
Geneva in 2007, decisions about the use of spectrum which is a scarce resource, clarified the matter for both our region and our country, and now allows us to finalize the development of policy on spectrum allocation and its implementation. 
The ITU has decided that
South Africa should host the World Telecommunications Standardisation Assembly in October 2008.  It will be the first time this is held in Africa.

The last Presidential International Advisory Council meeting, which was held in March 2008, focused on a key challenge facing our country, namely skills development, and made very useful recommendations which we are implementing.  The Deputy will report on this further.

At the end of 2006, we created and launched an intergovernmental relations forum – IGRF to speed up communication and ICT deployment across provinces and among traditional leadership areas.  We launched a municipal websites project in November 2007 and hope that by the end of 2008 all municipal websites will be functional.  E-cooperatives are also being launched in every province.  These co-ops as well as municipal officials are being trained in website development and management.  We also embarked on an ICT Work Programme with the National House of Traditional Leaders.  Websites have been created in two provincial Houses of Traditional Leaders and training in the digitization of information for the House of Traditional Leaders will be undertaken by e- cooperatives.  The technical backup and maintenance of their websites will also be done by e-cooperatives.

On the 28th May this year we launched the
North West Province’s chapter of the National Digital Repository on Cultural Heritage. This is an initiative in which we are working with the Department of Arts and Culture aimed at developing, preserving, digitizing and sharing the country’s cultural heritage.  The youth involved in this were trained at NEMISA. 
The strategic objectives of the Apex project three (3) which aim to address infrastructure development and harnessing the use of ICTs for socio-economic development will be addressed by these initiatives.


Honourable members,
Our strategic thrust of increasing uptake and usage of ICTs to meet universal service goals and the true convergence of ICT services in
South Africa demanded that government must invest in infrastructure like other developing countries where there was better usage and uptake.  ICT infrastructure is globally accepted as essential and governments are increasingly playing a central role in directing development and ownership of this infrastructure, because this is key for a developmental state and the development of the sector.  We therefore have been pushing policies of open, non-discriminatory access to ICT backbone infrastructure and the private sector providing services on top of that infrastructure.  

We amended the Electronic Communications Act to enable government to intervene in the deployment of strategic ICT infrastructure. I intend to issue a directive to ICASA to issue a license to Infraco in terms of section 3(1A) read with section 5(6).

We regret that the growing theft of copper cables has had the effect of undermining the implementation of our local loop unbundling policy and is a threat to our security and socio-economic development.  Therefore the development of later technologies such as wireless and mobile broadband is assuming greater importance.  These technologies have had some advantages in that they are able to be deployed much more easily to rural and disadvantaged areas.  If government promotes and incentivizes their deployment in these areas, this will improve uptake and usage among people and areas that have thus far been excluded.

As part of its Apex project 3, Government has decided to begin with deploying Wireless Broadband to 500
Dinaledi Schools and target clinics, hospitals, libraries, post offices, Thusong Centres and government centres in the same coverage areas.  This will help not only in increasing uptake and usage of ICTs, but will help to deliver inclusivity in the building of the information society.  Sentech has been charged with the responsibility to roll-out this wireless broadband.  Its greatest challenge is funding.  We will not be able to achieve the 500 Dinaledi schools on current funding but have decided to start with 233 schools.

Sentech is partnering with various organizations to enhance e-services such as the Mindset Learning and Health projects; V-sat Links to Prenatal HIV Research Unit at Chris Hani Baragwanath Hospital and wireless platform to 103 mobile Units to Home Affairs as well as seventy eight (78) community radio stations linked to Government Communication and Information System (GCIS) and partnership with the South African Weather Service and NEPAD e-Schools.

Telkom has tabled a proposal for a comprehensive telecom solution to incentivize the BPO sector that will have the potential for job creation and inclusive participation of historically disadvantaged individuals in line with the ASGISA strategy. Government will be issuing guidelines for the implementation of this proposal.

The training in e-skills to compliment infrastructure roll-out in increasing uptake and usage will be presented by the Deputy Minister.
The inclusion of the postal regulator into ICASA has laid a foundation for the inclusion of the postal infrastructure into our strategy of increasing usage and uptake.  Many post offices are being turned into Thusong Post Offices and will be covered under the wireless broadband roll-out of the Dinaledi Schools.  This will allow them the connectivity to provide not only ICTs but financial services to the marginalized.  This will increase the use of the Post Bank, Mzansi Accounts, the Apex fund, Mafisa and other government services by the most disadvantaged.  All these will raise our teledensity and broadband penetration to promote competition, which will reduce postal and telecom prices.


Honourable Chairperson,
The Broadcasting Digital Migration (BDM) process is on track.  As I mentioned in my budget vote last year, the dates for the switch on of the digital signal and switch off of the analogue signal have been decided and announced as November 2008 and November 2011 respectively.  BDM is likely to change our ICT landscape dramatically.  New opportunities will be created at both lower and higher ends of skills and businesses.  The public awareness has commenced and will be intensified in the coming months.   

Last year I also mentioned the establishment of the Digital Dzonga, the office that will manage the implementation of the BDM Policy, as well as the appointment of its chairperson.  I am pleased to announce that the following individuals have been appointed as the members of the Digital Dzonga: Mr. Marcel Golding; Mr. Calvo Mawela; Mr. Thabo Mofokeng; Mr. Dingane Dube; Mr. Richard Poulton; Ms. Karen Willenberg; Mr. Mvuso Mbebe; Ms Lorraine Braithwaite-Kabosha; Mr Bresler Cilliers; and Mr Robert Sobey.     
Working with the dti, we are well advanced with the development of the strategy to build a first class Set Top Box manufacturing sector which will grow into an electronics manufacturing sector. I wish to take this opportunity to thank the current industry players for agreeing to be part of the development of this South African excellence in an inclusive and win-win manner that will see many new-comers into this and related sectors. This will ensure that the set top boxes, which will only be required when the analogue signal is switched off in 2011, will be manufactured in
South Africa contributing to the creation of jobs.  A set top box control system would be installed to protect South African design and manufacturing capability. The control system will enable communication between the broadcasters and the public, and provide for e-government services which can become interactive in the future.  This set top box control system will not be used to switch off viewers.


Honourable members,
The need for increased investment in ICT infrastructure has been highlighted by both government and business. A lot of cables are being laid by operators in the country, especially around areas where there is very high demand by business. Government also prioritized investment in submarine cables as part of the strategy to reduce the cost of communications.  Because of the interest that had been shown by several companies to land cables on our shores specific guidelines were developed. In addition, we proposed that instead of getting companies to seek separate permits that will satisfy environmental as well as security concerns, these would be applied for at one point and coordinated by the department of communications working within the cluster system. Given that the Department of Environmental Affairs and Tourism was in the middle of passing a bill through parliament, it was not possible at that point to address environmental permits totally wording was left that proposed a separate application. This will however be addressed soon. Given the ICT data and network security imperatives facing us, this aspect, cannot be negotiable.

The SAT 3 undersea cable will be upgraded thus meeting our 2010 international cable capacity commitments.

The economic growth of
South Africa and the certainty of our ICT policy and regulatory environment have increased the appetite of investors in our telecoms industry. This is evidenced by the increased desire to invest in international cable capacity such Infraco AWCC, the government-led cable, Seacom, EASSy and UHURUnet, which land on South African soil.  Further evidence of this can be seen in the flurry of offers for our telecoms giants such as MTN and Telkom.

Through the IGRF, we have been able to establish that provinces are embarking on strategies for the roll-out of their broadband infrastructure to all municipalities. I intend to issue policy directives for the licensing framework, in line with Section 3(1A), in the near future. This is a demonstration of business unusual in our efforts to build an inclusive information society.

Taking into the consideration the concerns expressed by the Polokwane conference regarding equitable and effective utilisation of the scarce frequency spectrum, I strongly encourage municipalities that, as they explore alternative sources of energy, such as solar, wind, etc. for street lights and traffic lights, they should also consider using these new energy platforms for broadband communications infrastructure.  This will result in the increased allocation of radio frequency spectrum dedicated for public use.
There are also investors interested in expanding infrastructure and services to underserviced and unserved areas at affordable prices.  I have therefore taken a policy position that, in order to promote the universal service provision of the electronic communication networks, ICASA should consider allocating sufficient radio frequency spectrum for the introduction of such services.  ICASA should also consider favourable interconnection rates in the traffic that originates on the network operated by such operators.  I will be issuing a policy directive to ICASA to urgently prescribe procedures and criteria on how operators that best demonstrate the ability to lower the cost to communicate and increase access to underserviced or unserved communities, could be licensed.


Honourable Chairperson,
Infrastructure provision for 2010 will involve the upgrade of Telkom’s core network to meet FIFA’s requirements and Telkom will implement the access network from its exchanges into the stadia.  Post 2010, excess capacity of both the core and the access network will cater for the increased demand.  The ownership of the access network will be transferred to the host cities and this should enhance their capacity to provide broadband.

Sentech’s investment in the second teleport will serve as a second back-up for 2010 for the existing teleport in Honeydew, as well as back-up for post 2010.

I am pleased to inform the house that the SABC reached an agreement with FIFA on the establishment of public viewing areas outside the host cities, in order to ensure that more South Africans will share in the experience of this major event.  The SABC is working with the provincial and local governments on the location of these public viewing areas.

On SABC, there has been a national debate about our public broadcaster as a result of the views that emerged out of the Portfolio Committees hearings.  A very positive outcome of this has been a national focus on what our national broadcaster should be; what it should do to meet the needs of all and not some and how it should be governed. 

The diversity of views across a wide range of factors, including appointment processes and internal management effectiveness, its content, relevance etc. have been expressed.  It is evident that both the Executive and Parliament will have to review the legislation and appointing processes to ascertain whether this legislation, drawn up at a particular historical time, is relevant for our current historical conjuncture. 

The powers given to the appointing authority, the processes of appointing and removing board members, the Public Broadcaster’s Charter, and the role of the executive and/or Parliament, clearly need reviewing, without sacrificing the broadcaster’s independence but clarifying the nature, content and form of that independence.
I have therefore requested reports from the board and management to assess some of the serious internal administrative and managerial problems within SABC and in respect of the relations between the board and the management, with a view to formulating appropriate legal, socio-political and economic recommendations. 
I suggest that the Parliamentary Committee consider leading a public hearings process on a public broadcaster best suited to our emerging democracy and related issues.

The findings of both these processes will inform replacement/review of the current legislation regarding the public broadcaster by the Department of Communications.  The department has already embarked on a thorough study of the current legislation

The issue of cyber security is high on our national agenda, as proven by the large delegation from
South Africa who participated in the recent conference on the International Multi-lateral Partnership Against Cyber Terrorism (IMPACT) in Malaysia.  The South African participants from our security cluster and the private sector was indicative of the collaborative nature required in dealing with the scourge of cyber terrorism and cyber crime, which poses a threat to our country’s critical infrastructure.   South Africa, as a member of the ITU’s High Level Expert Group which formulates long term strategies to promote cyber security, will benefit from this initiative.

Honourable Chairperson
In requesting the House to adopt our Budget, I wish to thank my colleagues in Cabinet and government for supporting me in putting ICTs on the national development agenda across all spheres.  I also thank the private sector for rising to the challenges of our policy vision by building a globally robust and competitive ICT sector as well as the companies and entities that are partnering with us and several other African governments in the ground-breaking initiative of NEPAD e-schools. I also wish take this opportunity to thank the Deputy President for agreeing to be our NEPAD e-schools champion. My appreciation goes to the Portfolio Committee on Communications for their continued support over the year. A special word of thanks to my Deputy Minister, the Director-General and Team DoC.
In the last four year the ICT sector has seen dynamic growth and we have weathered the storms of globalization. In my 2005 budget vote I recalled one of our proverbs which says “Noka e tlatswa ke Dinokana” - literally translated as ‘the river is swelled by streams’.  The following year we paddled down this river in a canoe.  Today this river has reached the ocean.  We now need to exchange this canoe for a bigger vessel that can withstand the waves and storms of this ocean. 

I thank you.


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