Communications: Minister's Budget Speech
19 Apr 2010
MINISTER OF COMMUNICATIONS BUDGET VOTE SPEECH 20 APRIL 2010
ICT for accelerated service delivery and empowerment!
Honourable House Chairperson
Fellow Cabinet colleagues present
Honourable Members of the Portfolio Committee on Communications
Senior Officials of the Department of Communications
Captains of the ICT Industry
Members of the media
Ladies and Gentlemen
The Department of Communications’ 2010 budget takes place against the backdrop of a global recovery from a debilitating economic crisis, in which once more the poorest nations have been severely affected. The impact of this recession is most felt in the developing world where aid and investment from the rich countries has shrunk considerably, resulting in job losses and increased poverty.
It is therefore necessary to nurture, promote and establish private and public partnerships as well as mobilise international assistance, civil society, labour and academia participation.
Our approach in building the developmental state can no longer be along the same old ways. Our government has introduced a clear programme of action to overcome our developmental challenges. In his 2010 state-of-the-nation address President Jacob Zuma emphasized the need to create sustainable jobs, to provide opportunities for the youth and to ensure rapid service delivery for marginalized areas.
ICT is a potentially transformative developmental tool, provided it is well located within the overall policy framework and is not seen as an end in itself, but a necessary means. It is the hump that feeds the camel.
ICT strategy should be determined by the reality of our people’s needs. These needs are among others, our human resource development, ICT growth and competitiveness and the upliftment of the underdeveloped rural areas. Our strategic objective is to encourage social access to technologies within a people centered, development orientated paradigm. Our people should be empowered to access information and knowledge to bring about social transformation and cohesion.
Sustainable service delivery that impacts on communities require the effective use and deployment of appropriate integrated ICT at all levels. Building the developmental state without effective appropriation of ICT across government, business and civil society will delay and hamper the achievement of our developmental goals. ICT is a catalyst for service delivery and the backbone of 21st century socio-economic development.
In 1995 our Government initiated the development of a South African Information Technology Industry Strategy (SAITIS) project, which set out an Information and Communications Technology (ICT) Sector Strategy Development Framework for
The question that arises is: What are we doing to develop policies and regulations that will stimulate further growth in the sector in order to attract new investors and create more jobs?
In the previous financial year we committed to develop and pass policies and legislation aimed at further growing the ICT sector.
I am pleased to report that Cabinet has approved the Radio Frequency Spectrum Policy. This policy provides for spectrum management, which involves the allocation of frequency according to the country’s developmental needs and International standards. It will ensure efficient radio frequency utilization and management of this scares national resource. In addition, this policy will further contribute to economic growth by promoting new services where required.
We have finalized the Broadband policy whose vision is to ensure that South Africans have universal access and services to broadband by 2019. The benefits accruing from the policy will include the provision of multimedia and e-Government throughout the country. The implementation of the Broadband policy will impact on the growth of the economy through expanding markets, increasing business efficiency and promoting competition.
I have also submitted for the consideration of this House, the South African Post Office (SAPO) Bill. The SAPO Bill seeks to establish a governance model for the Post Office that will ensure greater transparency, accountability and efficiency.
I am pleased to report that the Post Office managed to implement a business model fashioned according to its market. It is looking into introducing two other business units, one of them being to concentrate on compliance.
We can highlight some of its successes such as the roll out of 47 new post office branches in the past financial year. Revenue increased to 6.3 billion rands due mainly to the increases in revenue in the Post Office’s mail and financial services. This was because of expansion of addresses and value added financial services. Moving forward the Post Offices is expected to maintain the surplus it has been making for the past 4 years.
The Post Office has also been faced with challenges, including expanding its footprint and bridging the digital divide. However, for the 2010/11 financial year the Post Office intends to focus on its financial sustainability, diversification programme, rural and youth programmes and achieving customer satisfaction. Its branch expansion programme will continue with the addition of 20 new offices and relocation of 11 other offices.
I wish to commend the Post Office for maintaining a good financial position. However, we must strive to find a suitable funding model for the Post Office, particularly because of the cuts to its subsidy, which it uses mainly for its expansion programme so that we do not compromise its universal service obligations. In the light of the fact that most of our people are rurally based and do not have access to banking services, I would urge the Post Office to accelerate its expansion programme including allocation of physical addresses , as this has a direct impact on connectivity and other services such as banking. This will additionally improve the Post Office’s market reach.
The Post Bank Bill, which is also before the House seeks to corporatise the bank so that it exists as a separate independent legal entity. I wish to stress that corporatisation should not be misunderstood to mean privatization, or even that consideration of such is likely in the future. The Post Bank will render transactional services and lending facilities through, amongst others, existing infrastructure of the Post Office, and develop into a bank of first choice, particularly to communities that have little or no access to commercial banking services or facilities. The Post Bank will also respond to local community banking needs which will minimize travel costs.
The Cyber security policy was gazetted in February 2010 for public comments. The policy is being discussed with relevant stakeholders.
We intend in this parliamentary session to introduce legislation aimed at further strengthening our ICT policy framework. We will therefore table the following bills:-
§ ICASA Amendment Bill – aimed at further strengthening the governance framework of the Regulator;
§ Public Service Broadcasting Bill – the bill seeks to align the public broadcasting system to the developmental goals of the country, and to provide an optimum funding model for the public broadcaster.
§ Electronic Communications Amendment Bill – the bill seeks to align Ministerial directives, clear up ambiguity on some definitions and further include the creation of strategic support structures such as the Tariff Advisory Council, among others.
In addition, a policy directive will be issued to ICASA to conclude the unbundling of the local loop.
We have commenced with the development of the Local Content Strategy. However, this will be finalized once the South African Local Content Advisory Council is appointed. The purpose of the strategy is to promote the development of local content, as well as identification of niche economic opportunities in the sector.
I am happy to report to the house that our interventions have stabilized the Public Broadcaster which was plagued by serious corporate governance and financial challenges. In June 2009, I established a Ministerial Task Team to investigate deeper the root causes which led to the collapse of corporate governance and financial challenges at both the SABC and Sentech. The task team concluded their assignment, and we are beginning to see the positive effects of their recommendations.
As you will recall the SABC was hit by a liquidity crisis and organizational instability. An Interim Board was appointed, which engaged with management in putting in place mechanisms to ensure curtailment of expenditure and revenue increment. The corporation was granted a R1, 4 billion government guarantees, to enable it to borrow from private banks. A tripartite monitoring team comprising officials from DOC, Treasury and the SABC has been established to monitor the financial performance of the corporation, and its adherence to the terms and conditions underpinning the government’s guarantee. We will ensure that the SABC does not do anything to trigger the recall of the guarantee, and that the going concern status of the corporation is not compromised.
A new board was appointed and continues to implement a turnaround strategy which includes austerity measures to enhance revenue and reduce costs.
The corporation’s radio sales unit achieved its sale targets and recorded an 11 % improvement in advertising. Going forward, the corporation must implement the turnaround strategy. It must support delivery on the core mandate. The corporation must focus on procuring local content over the current MTEF.
I wish to thank the SABC for developing public viewing areas for the World Cup, as this further contributes towards bringing broadcast services to our people. I am sure that this will not only be a once off service, but that access to quality broadcasting services will continue to be a top priority for the SABC.
I have appointed new board members and a Chairperson for Sentech. I believe this will bring about greater purpose to the organization and allow it to focus on the delivery of the mandate for which it was created. The process to fill the position of the Chief Executive Officer is currently underway.
Sentech is a strategic state entity whose main function is that of the signal carrier for the state. In the past financial year, Sentech continued to maintain terrestrial analogue television and radio transmission at 99.9% beyond customer service levels, which is the technical definition for uninterrupted service provision.
For the 2010/11 financial year, Sentech will continue with the rollout of the DTT infrastructure. Sentech is critical in the provision of digital terrestrial television. Its target is to reach 60% population coverage by the end of the financial year 2010/11. We will monitor the process of implementation. Let me take this opportunity to thank Sentech and Telkom for collaborating in providing the ICT infrastructure for the 2010 FIFA Soccer World Cup.
For the past five years, the cost to communicate and doing business in
In November 2009, I issued a policy directive for ICASA to initiate a process to reduce the mobile termination rate (MTR) down to cost. Simultaneously, I engaged in process of consultation and discussion with the mobile operators for them to voluntarily begin to reduce the MTR. This then culminated in an agreement for an initial cut of the MTR from R1.25 to 89 cents with effect from 1 March 2010. In line with this, ICASA approved a revised amended Interconnection agreement. Further, I wish to acknowledge and recognise the commitment that the three mobiles operators exhibited by voluntarily introducing much cheaper packages to cater for the needs of the poorest during the December 2009 festive season. ICASA has now released draft regulations aimed at ensuring cost based MTR rates in July 2010 on a gliding scale. Telkom committed to pass-through the savings emanating from the reduction in the MTR back to the consumer and this is already yielding positive benefits to consumers.
Honourable Chairperson, let me take this opportunity to thank Cell C, Vodacom, MTN and TELKOM for co-operating with both my department and the Portfolio Committee on Communications and ICASA to bring down the cost to communicate.
The next phase of cost cutting measures should involve the retail market which supplies services directly to consumers. Lastly, Cabinet has adopted the Departments Programmes of action on initiative to reduce cost to communicate.
A stable regulatory regime is necessary for us to address key ICT developmental challenges. ICASA will therefore need to focus critically on the following:
· regulatory certainty,
· promotion of ICT sector;
· aligning its structure, leadership and culture with the strategy licensing for new services and
· Achieving universal service and access.
I would like to urge ICASA to accelerate finalization of all outstanding regulations because that will have a positive bearing on the development of the industry.
The Portfolio Committee on Communications has meanwhile called for nominations for four (4) councillors including the Chairman of ICASA whose term is coming to an end during the course of this year. I wish them well in their future endeavors.
The department has over the past year reviewed and audited all existing outstanding commitments related to spectrum license obligations. You will recall that in 2004 and 2006, when spectrum licenses were granted to mobile and fixed operators, specific universal service obligations were included. My department has recently interacted with MTN, Vodacom, Cell C, Telkom and Neotel to urge them to expedite delivery of on their commitments towards commitments. The department has agreed with the operators to establish a working team to pursue these obligations. ICASA, USAASA, National and Provincial departments will be an integral part of this working group.
We reached an agreement with the mobile operators to avail 80,000 mobile units by May 2010, which will be distributed to the Police, Safety and Security agencies, and Emergency Officers who will be deployed at the various FIFA 2010 stadia. Additional beneficiaries of the other obligations will be identified in the course of the year. This is line with the departments’ contribution to government priority on ensuring safety for the public.
As part of our broadcasting digital migration plan, I have recently disbanded the Digital Dzonga due to potential conflict of interest that has arisen with some of the Council members. Nominations are ongoing and names will be made public soon. I wish to thank all former Council members for the sterling contributions that they have made.
The department successfully hosted the national summit on set top box manufacturing, which involved industry players. We will conclude the conformance scheme in the first quarter of this financial year. A draft roll out plan for the Scheme for Ownership of set top boxes for poor television owning household has been developed. The scheme provides poor people with subsidies that allow them to procure the set top box.
In my maiden budget vote speech I committed the Department of Communications to work closely with key stakeholders to make ICT relevant to the people of
The Department has since developed a Stakeholder Engagement Programme that seeks to institutionalize a structured programme of engagement with key stakeholders.
In this regard, the DOC has identified various industry and business associations that are critical to ensuring that it achieves its mandate of creating a favorable ICT environment. We have created an ICT Industry Forum and have since met twice. This initiative has been met with a lot of enthusiasm by the sector, who regards interaction with DOC as key to the advancement of their interest.
I am also of the opinion that government can use ICT to improve its efficiency and streamline its operations. Therefore the development of a coherent framework for the deployment and utilization of ICT in government is critical. It is urgent that government adopts and uses ICT in order to modernize services, improve administration and efficiency.
The roll out of effective ICT services will ensure that government services are available to all South Africans equitably irrespective of where they are in the country. South Africans will be able to see a single face of government and be able to connect with all levels of government and different departments using a single platform. ICT offers a possibility of e-Government where government offers a seamless and integrated platform for interaction.
When addressing rural development, ICT can also contribute to the scientific interpretation of outputs in the agricultural sector, water management, including numeracy and literacy training of communities. We are in discussions with the Department of Rural Development and Land Reform to ensure that we participate in the agrarian reform and food security programme through technology intervention in our sector. This will also contribute to our involvement in growing the second economy.
The Department of Communications’ main responsibility is ICT policy initiation and development and to oversee the implementation thereof. My department, unlike other line departments, does not have the physical presence at Provincial and Local government levels to implement programmes. We are dependent on partnerships and collaborative arrangements that involve the private sector, all levels of the public sector and NGO’s. The State Owned Enterprises (SOEs) are the primary instruments through which the DOC implements its programmes.
I have realized the need to ensure that SOEs develop strong governance procedures and systems. As a result of this, we have amongst other things strengthened the Shareholder Compact between the Minister and the Boards of the SOEs. I am calling for greater institutional capacity building, more effective utilization of the human resource capacity, better financial management and more cohesiveness.
In order to ensure the sustainability of SOEs as part of my government’s arsenal to deliver on the Polokwane Resolutions and our election mandate, I have requested the department to set up an effective monitoring system for the SOEs that will address the objectives of providing effective and efficient oversight of SOE’s and other entities, and introduce performance management system with the ICASA Councilors.
Since my appointment as Minister of Communications, I have been focusing on improving the capacity of the department to deliver effectively, efficiently and timeously. One of the first actions that I undertook was the appointment of the Director General in October 2009 as a measure to bring in stability within the organisation. We have been examining our organizational capability with a view to improve performance and enhance the capacity of the department to deliver on the ANC Government’s mandate. During this initial period we also had to exercise our authority to institute some disciplinary measures on officials who have transgressed the provision of the PFMA. Currently we have commissioned an organizational review that will focus on systems, processes as well as human resources issues.
Honorable Chairperson and members,
This culminated in the Addis Ababa Declaration (2010) adopted by the AU Heads of State and Government attended by our President Jacob Zuma. The
During this period we will seek to pursue the spirit of the Addis Ababa Declaration and the NEPAD Principles of integration for the Sub Region. Of particular importance for our country in this financial year will be the finalization of the SADC home and away tariff regulations. This is aimed at reducing roaming and cross border communications costs.
At the broader International level, the department will seek the strategic placement of South African nationals in multinational organizations, and continue to influence debates in these forums.
In May 2010
In October 2010 we will participate in the International Telecommunications Union (ITU) Plenipotentiary in
Our participation in the ITU is of critical importance. I therefore call upon all ICT role players to actively participate and support the department in all ITU activities.
It is important that we realize that the challenges we face require us to adopt policies that pursue African advancement and enhance international cooperation.
Chairperson and Honourable Members of the House,
Last year I pronounced that my department will develop an Integrated ICT Policy Framework which will seek to position ICT as a central enabler for effective service delivery to transform the lives of our people. This comprehensive policy framework will be able to move us towards a people-centered and people driven, inclusive and sustainable digital economy. This framework should also support our endeavors for full convergence as we move towards an information society.
I wish to inform the House and the public that consultation towards developing the comprehensive ICT policy framework has begun at various levels. I will soon be making a preliminary discussion paper available to the public for more compressive deliberations and inputs.
We should recognize the critical importance of ICT as a major user of energy and natural resources and as an enabler for environmental and cultural change. We therefore have to do our best to ensure that technology systems that we use to improve our lives do not have a negative effect on the environment that our children and their offspring will inherit.
I therefore further wish to inform the House and the public that we will be embarking on an ICT greening strategy to reduce the environmental impact of our computer and electronic systems.
The Deputy Minister of Communications would normally have been here to make her complementary input to my budget speech. She is however stranded in
The Deputy Minister sends her regards to this honorable house.
The Constitution of the Republic makes provision for the right to freedom of expression. This important right includes the freedom of the press and other media, and the freedom to receive and impart information or ideas. As you know, the majority of our people living in rural and semi-urban areas have little or limited access to information, particularly print media and digital data access.
Our challenge is to ensure that our people enjoy equal status, both social and economic, which builds communities and empowers them to live a better quality of life. Our national democratic transformation agenda is premised on the ideals of achieving a national democratic society where our communities have equal opportunity to reap the benefits of the modern economy.
We have a responsibility to direct the means of delivering access to information and communications with the bias towards the poor and the marginalized section of our society.
Honourable chairperson and members,
Our democratic government has passed legislation and policy frameworks to enable the enhancement and the delivery of online services. The Electronic Communications and Transaction Act, provides for the provision of online services and the creation of an e-Commerce environment that is secure and authentic. This Act supports the provision of online services delivered via the internet.
We will continue to work with our sister Departments and stakeholders to ensure the speedy automation of certain online government services for the benefit of the citizens.
The automation of the online government service platform will not only transform the relations between government and the citizens by ensuring e-participation but will also improve business processes within the three spheres of government and the private sector.
As a government we will continue to implement these policies and encourage strategic investment in ICT backbone infrastructure in provinces and municipalities, especially in rural areas. We will also work closely with the Provincial and Local Government within the co-operative framework espoused through the Intergovernmental Relations Framework Act. In October last year, I hosted the Intergovernmental Relations Forum which was attended by MECs from the nine provinces of our country. The common challenge expressed by most provinces is the unavailability of ICT infrastructure, whilst others indicated that they have began their investments in fibre-optic cable networks.
I must highlight however that there is a strong need to integrate our plans to ensure interoperability and accessibility of these networks by individual households. Our people must have maximum return from all these investments that our government is making.
Honorable Chairperson and members
One of the strategic goals of the department is to accelerate socio–economic development by increasing universal access to ICT services. The Department has implemented various projects in pursuit of the goal of increasing the uptake and usage of Information and communications technologies by government and individuals in partnerships with business, civil society, including labour.
In building of an information society we are guided by the principles of people-centredness and inclusivity. I am glad to inform you that on the 26 of February 2010, we launched an Information Society Multi-stakeholder Forum which is an Information Society Partnership for Development. This initiative is aimed at bringing together all stakeholders in the implementation of our National e-Strategy, the ISAD Plan, to bridge the digital divide. I was excited to see the ICT industry, civil society and labour coming out in support of this initiative. A number of proposals for collaboration have been received by the Department and we hope that this will yield a positive developmental impact in our society.
In the previous financial year, the Department developed an ICT Small and Medium Enterprise Strategy which is centred on entrepreneurship principles. The roll-out of this strategy will ensure the establishment of ICT Business Incubation centres in
The broadcasting digital migration programme provides a unique opportunity for SMME growth in our electronics manufacturing and content generation subsectors. These opportunities should be shared by our most deprived communities so that they too can enjoy the benefits of this digital transition. The key focus must also be on developing and growing our creative industry, which include broadcast content producers as intended beneficiaries. This will further provide an opportunity for a meaningful contribution towards GDP growth.
As we roll out the broadcasting digital program, the Department will run a rigorous digital migration awareness campaign to teach and educate the public about the importance and the benefits of going digital.
In an effort to digitize our cultural heritage content, the Department launched the KZN digital repository at Stanger in September last year. The documentary which was unveiled by the Department in collaboration with the
I have to mention that the majority of people who are implementing these projects that I have mentioned are young and are trained in IT and business development skills. The e-Cadre is a flagship project in which we train young people in collaboration with Further Education Training (FET) colleges and deploy them in various municipalities to perform community service. I however wish to highlight that the 40 young people trained in Ekurhuleni have not been placed due to lack of funding for this project in the previous financial year.
The strategic goal of ensuring universal access to services remains an important component of the work of the Department and the Universal Service and Access Agency of South Africa. USAASA has completed the project of definitions for Universal Services and Universal Access which were published in the Government Gazette in February 2010. The definitions set standards for infrastructure roll out in underserviced areas. These definitions mark the cornerstone and progress in facilitating the bridging of the communications and infrastructure gaps that still exists in our country.
The national youth deployment strategy was developed in the first quarter of 2009. It is focused on developing ICT infrastructure and building access centers. The key highlights for the previous financial year included the establishment of 8 new community centers. Sixty eight schools have been provided with 2720 computers. Subsidies for internet connectivity were granted to 18 FET colleges.
In the next financial year the agency intends to establish a baseline project to identify the number and geographical location of underserviced areas. The agency will also built new digital hubs targeting rural provinces.
Another strategic goal of our government is to strengthen the skill and human resource base in the ICT sector. Our human development is characterized by a lack of employment - ready graduates required by our modern economy especially in the field of ICT.
Following the reconstitution of the e-Skills Council by the department last year, the work of the Council is on track with the National e-Skills Study conducted and a report adopted by the Working Group. The final report is ready for presentation to Cabinet.
The Department is in the process of operationalising the Meraka e-Skills Institute as a measure to bridge this gap. In the previous financial year, Meraka has formed partnerships with 6 international institutions and 12 local Universities and developed a curriculum which will assist universities to produce an ICT skilled cadre ready for the job market.
The National Electronic Media Institute of South Africa (Nemisa) was established to provide education and training in production and technical skills relevant to TV and radio broadcast industries. Over the next financial year Nemisa will develop capacity to deliver high quality educational services and train 870 learners.
In pursuance of better health and education for all South Africans, our department is cooperating with the departments of Health and Basic Education for the development of a connectivity plan the implementation of which will occur in the course of this financial year.
Once more I would like to call upon operators to work together with the Department and ICASA to implement the e-rate dispensation for connectivity to schools in terms of the Electronic Communications Act. It will be important to note that we will need to consult with our affected sister departments, for example Department of Health, Department of Basic Education, Department of Corporative Governance and Traditional Affairs about the latter.
The year 2010 marks the mid-term of the World Summit on Information Society. In May this year,
Finally, I want to thank my Deputy Minister, Ms Dina Pule (in absentia), the Director General Ms. Mamodupi Mohlala and all staff members of the department for the hard work done. To the department, to them I say, we must always remember our central theme: we should ensure that ICTs are used for accelerated service delivery and empowerment. I thank the Portfolio Committee on Communications members under the leadership of Mr. I. Vadi for providing advice, wisdom and support, especially during my maiden period in office.
I ask this house to approve budget vote 26 of the Department of Communications.
Fellow South Africans,
My parting words in this historic year 2010, the Year of Action!
Let us show the world and confound our critics.
For our part in the ICT sector, the ICT infrastructure for the 2010 FIFA Soccer World Cup and the International Broadcasting Centre will be fully operational before the official kick off date of 11 June 2010.
Mayi Hlome Bafana Bafana Ke Nako!
I thank you.
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