Minister of Communications 2013 Budget Speech and Responses by ANC, DA and IFP

Speech by Hon Faith Muthambi during the National Assembly Budget Vote Debate on Communications

Honourable Chairperson
Honourable Minister Dina Pule
Honourable Deputy Minister
Honourable Members
Distingushed guests
Ladies and gentlemen

ICT RESEARCH AND DEVELOPMENT AND INNOVATION INCLUDING CORPORATE GOVERNANCE.

The ANC-led government has implemented quite a number strategies and tactics to address various shortages of skills. These include the Joint Initiative for Priority Skills Acquisition (JIPSA), Technology and Human Resources for Industry Programme ( THRIP), Sector Education and Training Authorities (SETAs) and the Innovation Fund . Technology is a moving aspect of innovation and it brings a lot of opportunities especially when tabbed in the minds of young people. The ANC 53RD Conference reaffirmed the fact that; there is widespread agreement of the importance of ICT in building equitable prosperity and globally competitive economies. Effective use of these technologies, however, requires building new capacities and skills, here referred to as e-skills, not only in the working force but the entire population. These skills are in very short supply all over the developing world and are of particular concern in South Africa.

The Conference acknowledged that South Africa has characteristics of both an advanced and developing economy. It has access to technology, sophisticated institutions including research entities and universities, a strong private sector, and fiscal resources. At the same time, half of the 52 million people in South Africa live below the poverty line, and a large proportion of them have very low levels of education and lack e-skills to use emerging technologies and services.

The situation in South Africa is not much better, causing South Africa to slip down the international `e-readiness` rankings which estimated that South Africa experiences a shortage of over 70,000 Information Technology(IT) professionals in 2008. The shortage of e-skills is even more worrying because of the fact that the supply of ICT graduates is now showing a decline, according to a published research by Accenture.

Locally, e-skills are seen as vital in addressing poverty, sustainable livelihoods, fight against crime, building cohesive communities, international cooperation, and building a developmental state. This general lack of e-skills is seen by the Department of Communications as a serious impediment to the nation meeting its commitment to the Millennium Development Goals (MDGs), the World Summit on Information Society goals (WSIS, 2005), New Partnership for Africa`s Development (NEPAD) and the South African Medium Term Strategic Framework 2009-14 (MTSF).

11.2. How Serious Is the ICT Skills Shortage in South Africa?

According to an annual ICT Skill Survey, compiled by the Joburg Centre for Software Engineering (JCSE), using data collected through an online ITWeb survey, as well as through corporate responses from other sources, attempts to quantify the number of skilled employees in the local ICT sector, as well as the gap between supply and demand were made. The survey cites a 2005 report by Joan Roodt and Andrew Peterson entitled "ICT Skills in the labour market", which estimates that there were about 150 000 skilled professionals employed in South Africa. ISETT SETA reports 143 000 in its sector skills plan. To this end, the estimated current total is in the region of 175 000 employees, although the reported figures are open for debate.

The estimate suggests that South African ICT skills shortage is much lower than previously thought. However, the 2010 ICT Skills survey predicts the demand for ICT skills in 2011 onwards to be between 7 and 15 per cent or 12 000 to 25 000 job opportunities. The skills most lacking, according to 2010 survey, are systems design and testing. The skills deemed `just enough` are project management, information, information security and process management. The research predicts that in 2013, programming and testing will be in short supply. As for programming languages in highest demand, Java, C# and VB are most needed, which is similar to the previous two studies.

It is therefore against this background the ANC 53rd National Conference resolved to promote and support the development of new ICT Research and Development plans and strengthen existing strategies and policies to foster robust,well-cordinated institutional arrangements that lead to development of indigenous world-class, technology innovation in ICT through directed national ICT research, development and innovation programmes. It is exciting to note that the department has identified e-skills development and E- Skills "in order to address the current e-skills gaps in the country, in the short term, the Department will prioritise the establishment of a Single Integrated Entity for e-Skills through the collaboration of the e-Skills Institute, NEMISA and ISSA. Over the short to medium term, the newly established Single Integrated Entity for e-Skills will focus on the development of the National e-Skills Plan and will implement a range of e-skills initiatives aimed at increasing the e-Skills capacity across Government, business, education, civil society and organised labour".

This is in essence e giving effect to the ANC`s Policy Resolution that Government must introduce a comprehensive e-Skills Development Plan that would include incentives to mobile industry cooperation for the benefit of young people.

The ANC acknowledges the rollout of the school connectivity project. This program gives the kids the tools to enhance their natural brightness through information technology

ICT Research

"Programme 3 of the Department, Policy, Research and Capacity Building, will have a specific research focus which will entail the development and implementation of a focused Research Programme aimed at supporting priority policies. Attention will be given to WSIS thematic areas aligned to government priorities, publishing of revised e-Barometer indicators as well as ITU-D guideline on Green ICTs".

CORPORATE GOVERNANCE W ITHIN THE COMMUNICATIONS PORTFOLIO

Good corporate governance remains a very critical area, which continuously requires attention in order to ensure that the Department and its entities conduct business in compliance with the various legislative prescripts and regulations.

Amongst the key areas that are at the Centre of governance include but not limited to:

Leadership - Fully constituted boards and executive management
Compliance with Public Finance Management Act and other relevant legislative prescripts
Effective governance structures, i.e. Audit and Risk Committees, Management Committees
Effective internal controls
Organizational policies
In the past two years, the Doc and its entities have performed as follows:

Organization      Audit outcome
Department       Unqualified
SABC   Qualified
NEMISA            Unqualified
SENTECH         Unqualified
ICASA  Qualified
SAPO   Unqualified
ZDNA    Unqualified
Key issues that have recurred and led to qualifications and emphasis of matter across the portfolio are mainly:

High vacancy rate at the leadership level
Inadequacy of proper procedures and systems
Non-compliance
Irregular, fruitless and wasteful expenditure
Weak internal controls
Management not doing adequate first level of assurance
Weak internal audit units
Hourable Chairperson and Honourable Members

The SABC had its ups and downs as you are all aware that we currently have interim board but let me take this opportunity to commend the Members of staff in the organisation at large under this difficult circumstances remained committed to maintain the public broadcaster status as broadcaster of choice. We note the following progress:

The fire at Henley Studios caused major disruptions to operations, but scheduling was managed to avoid program disruptions
During Madiba month a number of activities were managed and executed,
Heritage month activities were successfully executed
Amortisation Policy was approved by the SABC board in July 2012
Major business plans were approved, i.e Isidingo, Yo-TV, Muvhango and Generations
TV and Radio Operating Model had been approved and implemented
Impairments have been managed downwards and the current forecast is R5 million
Content Policy has been incorporated into the broader SABC Procurement Policy
DTT Business plan is completed and ready for submission to the Group EXCO for approval
GOVERNANCE MATTERS

According to the ICT Africa analysis, studies conducted by Dr. Allison Gilward and various literature review; the South African telecoms sector has been in flux over the last decade from a policy and regulatory perspective. Sub-optimal outcomes after the first phase of reform saw the partial privatisation of the incumbent and the entry of a third mobile operator. In the second phase another national fixed-line operator entered the market and the market was further liberalised through the enactment of the Electronic Communications Act in 2005. This was hailed as legislation that unshackled the market constraints and enabled the optimisation of a converged environment. But the anticipated opening up of the market has been hampered by a number of legal and regulatory bottlenecks.

Historically, the focus by Government on the high cost of communications has failed to acknowledge this as an outcome of its policies, highlighting instead the excesses of network operators, and the need to bring political and moral pressure to bear on them. What the sector performance review does is reveal the linkages between policy, regulation and market outcomes.

The market, structured around a few vertically integrated operators who persist despite the introduction of a horizontal licensing framework, requires resource-intensive access regulation to constantly adjust operator behaviour in response to the anti-competitive incentives inherent in such markets. The ability of the regulatory to respond effectively to this, is determined at least partially by the institutional arrangements, the technical capacity that resides within public institutions; and the appointment of those who hold public office within them. This, together with the market structure determine policy outcomes within the sector.

South Africa has had no major policy review of telecommunications since the mid-nineties when it embarked on a major consultative process that resulted in a White Paper on Telecommunications and the consequent Telecommunications Act of 1996. This resulted in the partial privatisation of the incumbent, Telkom, in 1997, and the introduction of a third mobile operator after a protracted and highly contested licensing process in 2002.

The Minister of Communications must be complemented: The appointment of the ICT Review Panelist is a begging of a new brand future. Key issues that will be looked into ranges from Constitutional rights to institutional re-arrangements.

COMPETITION MATTERS IN RELATIONS TO GOVERNANCE

Despite this attempt at creating a horizontal licensing framework, without a fundamental shift in policy the market remains structured around vertically integrated incumbent operators, now with effective duopolies in both the fixed and mobile market, despite the entrance of a very marginal third mobile operator in 2002. Policy and regulation influences the nature of competition and the ability of companies to compete.

The vertically integrated fixed-line incumbent retains dominance over the backbone, while competing downstream with its competitors, inducing the kind of anticompetitive behaviour that has seen it brought before ICASA and the Competition Commission.

While in the mobile market, the effective duopoly has resulted in price matching, poor service quality and other uncompetitive behaviour associated with duopolies. The regulator has not been unable to monitor the large incumbent operators and the level of competition in the market.

It is therefore commendable that the Minister of Communications is issuing a policy directive instructing ICASA to take action on this matter. We cannot afford any market failure in this Country. We cannot allow the failure experienced by Under Served Area Licensees (USALs) to happen again: Quoting from our former President, Nelson Mandela "Never Again!!".

The regulatory framework is currently uncertain in a number of respects. Many of the regulations and other secondary legislation required to fulfill the implementation of the Electronic Communications Act are still pending or not yet proposed. In line with the provisions of the Act, ICASA has instituted a number of processes that have either stalled or not reached conclusion.

Within the statutory period prescribed, due to complexity (market definitions), contradictions within the law (interconnection) or the absence of technical or administrative capabilities.

ICASA must take action and move, this cannot be allowed. The ANC is not happy about the delays.

South African consumers have long been subject to some of the highest mobile interconnection rates in the world. Despite having already been in business for over a decade, in 2001, with the entry of the third mobile competitor in sight, the incumbent mobile operators increased their asymmetrical mobile termination rate from 20 cents to R1.25 - a rise of over 500% - while the fixed termination rate was set at 27 cents

This must change - the Minister and the ANC have spoken. We cannot allow high cost to communicate anymore in this country. Mangaung Resolution..

CONCLUSION

Legally, the South African telecoms market is partially liberalised within a converged licensing structure. The Electronic Communications Act of 2005 explicitly supports increased levels of competition. However, in practice, the market is still structured around two traditionally vertically integrated Public Switched Telecommunications Network (PSTN) operators (two fixed networks), three mobile operators and a multi-media network operator.

Institutional arrangements that compromise the autonomy of ICASA to regulate the sector effectively are reflected in its non-performance in the critical areas of competition regulation, licensing, interconnection and frequency. ICASA has been characterised by stagnation, litigation and incapacitation. No additional competition regulations have been issued since March 2008. Apart from Neotel, no new licences have been granted, no spectrum regulations have been finalised and no interconnection regulations have been issued.

As a result of the Parliamentary Portfolio Committee`s intervention to bring down the cost of interconnection, ICASA has laid out a schedule to issue interconnection regulations by June 2009 through the EC Act Chapter 10 market definition and dominance assessment process. Its failure to issue any regulations in over 18 months, and the continued reduction of qualified competition staff, suggests that this is going to be a tough deadline to meet.

Recommendations on resolving the following key issues in order to foster competition:

Develop a common vision for the sector through the development of a clear policy framework to promote competition in the market, co-ordination of state enterprises and a targeted universal services strategy to deal not only with the gaps in the market, but demand-side stimulation of the market.
Create strong and autonomous institutional arrangements with adequate resources and capacity that will enable effective regulation of dominant players in the market and anticompetitive behaviour.
Streamline policy and regulatory processes to prevent regulatory bottlenecks and attract international investors.
Enable wireless spectrum allocation for critical bands and open access to networks.
Introduce competition-enabling mechanisms to open the market and thus discourage wasteful duplication of resources.
Examine the equitability of licence costs and their rights.
Complete competitive entry regulation such as carrier pre-select, essential facilities regulations and local loop unbundling.
Revise wholesale regulation, including clarifying interconnect glide path regulations,
Ensure access to facilities at cost with favourable terms for co-location.
Determine rights of way access for new entrants.
Honourable Chairperson, we in the ANC, the majority party in this house regard communication as a strategic tool to speed service delivery. It is our considered view that the Department of Communications need a management that is prudent and leadership hat understands good corporate governance for it to fully achieve its mandate. The successful implementation of all the The ANC supports this budget vote.

The ANC supports this budget vote.

Thank you.

Speech by Hon Eric Kholwane during the National Assembly Budget Vote Debate on Communications

Honourable Chairperson
Honourable Members and Members of Cabinet present
Honourable Minister and Deputy Minister of Communications
Honourable Deliwe Dina Pule and Stella Tembisa Ndabeni-Abrahams
Members of the Portfolio Committee on Communications
Chairpersons and CEO`s of State Owned Companies
Captains of the ICT industry
Senior Government officials
Members of the media and distinguished guests

Introduction

Allow me to commence by observing a moment for Mr Luthando Namzi, a senior communications officer assigned to the Portfolio Committee on Communications (PCC). Mr Namzi passed away in a car accident on Friday, 17th May 2013. He served the PCC with diligence, passion and the utmost commitment.

I also join the house in mourning the loss of Mr Vuyo Mbuli, SABC morning live presenter, best known for his outro "sharp-sharp" The country, and the broadcasting industry have lost a stalwart and the condolence messages bear testament that indeed, "mintiro ya bula bula." May their souls rest in peace.

Statistics from different sources reflect that the growing prominence of ICT cannot be understated; therefore ICTs are an important facet in shaping a country`s development and more importantly in addressing its socio-economic challenges. Science, technology and innovation have become key factors contributing to economic growth in both advanced and developing economies.

In the knowledge economy, information circulates at the international level through trade in goods and services, direct investment and technology flows, and the movement of people. The ICT sector therefore plays an important role, notably by contributing to rapid technological progress and productivity growth.

The 53rd National Conference of the ANC reflected on the concern raised by the Global Information Technology Report of 2013 on the lack of clear government vision (105th) to orchestrate and implement a holistic ICT strategy. To this end the Conference instructed the department under your stewardship to develop a National ICT policy that will promote the provision of universal access, quality and affordable networks and services to ensure the creation of an information society with capacity to participate in the knowledge economy. However for the department and its entities to succeed requisite skills are necessary.

The ANC from its inception has been leading the society and continues to do so, and continue to do by engaging all concern. We commend the effort of the department in continuing to bring together sectors leaders (from both public and private) for dialogue and exchange of views to facilitate transformation in the ICT sector. Notably, the successful colloquium held on the 19th-20th April 2012 in Midrand, ICT Indaba here in Cape Town on the 4th-7th June 2012 and the establishment of the ICT Policy Review Panel, chaired by Mr Joe Jwara bear testament to the commitment of the ANC to lead through dialogue.

Universal Service Access

Earlier this year the committee undertook an oversight visit to the Eastern Cape where we met Lufutho Community in Cala. Like many communities in the country universal services access for ICT infrastructure was at the centre of their challenges. To access postal services takes the most three days depending on the weather, they do have televisions, which they call them radio television simple because they hear sound without any picture.

Furthermore, none of the surrounding schools have a cyberlab or telecentres; thereby parents are subjected to pay a public transport fare for about R60 per trip for their children to access Internet to do school projects. The same goes for telecommunications.

I am, however, pleased to note that SABC with Sentech, SAPO and USAASA (Agency) are hard at work to ensure that communities like Lufutho do become part of the information society and do participate in the knowledge economy.

The implementation of the PCC`s recommendations to dissolve the then Board, and your subsequent appointment of the current Board led by Ms P Radebe has position USAASA in a good path to stabilise the entity and to fulfil its mandate. For the first time the USAASA has managed to separate the budget of the Agency and the Universal Service Fund (Fund). Well done Mabhele and team USAASA.

Furthermore we are pleased that an audit for all operational and non-operational telecentres and those that needs refurbishment has been concluded.

Cost to Communicate

The provision of universal access to communication services will never be realized if such services are not affordable. By now we know that availability does not translate to accessibility and affordability. The reduction of the mobile termination rate and subsequent limited drop in cost to communicate resulted in an increase in users and utilization of the services.

We must take this opportunity to commend those operators who immediately passed this reduction to consumers. As you have indicated Minister still needs to be done by the regulator in particular to reduce cost to communicate.

The regulator has to create a conducive environment for both Cell C and Telkom Mobile to survive, duopoly it`s a worst anticompetitive environment.

The PCC held public hearings on the 29th-30th November 2012 focusing on the main operators, this will continue with second part of the public hearings where focus will be in consumers, SMME`s and other role players impacted negatively by the high cost to communicate. The Global Information Technology Report (2013) concurs with our assertion that high cost to communicate is hampering our competitiveness as a country. Indeed something must be done, South Africans should be able to communicate without waiting promotions times and days!

The recent Top-Tv fiasco it`s a clear market failure in broadcasting, the approach adopted by the regulator has not work. The regulator must create a conducive environment for competition to strive; mere licensing of many licensees as in the case of pay television has proven not to be successful. I am not in total agreement with those who advocate that the market failure in pay television is because of the limitation on foreign investment. More urgently is the need for inter-operability of STBs on both pay TV and free to air to address consumer and competition needs.

The regulator needs to adopt an evidence based approach when embarking on regulatory processes, therefore Regulatory Impact Assessment should not be an option but a must.

We have noted with concern the ongoing public spat between the regulator and some operators/licensees who seem not to be paying spectrum licensee fees, and some using the spectrum without the necessary authority. We must support the regulator on its effort to ensure that what is due to Ceaser comes to Ceaser.

The message should be loud and clear – that is ‘pay your dues.` However we must also call upon the regulator to treat licensees just and fairly.

Broadcasting

The 52nd Conference of the ANC recognized the strategic role of Sentech in the transformation and development of broadcasting to as well guarantee the availability of television and radio signal to all parts of the country (geographical). The current Board of Sentech seems to understand its mandate very well.

During the committee oversight in the Northern Cape 2011-2012, we noted with concern the number of self-help sites, and the fact the better part of the province could not access the public broadcaster`s channels. Honourable Minister, under your stewardship SABC working with Sentech has managed to rollout 47 low-power transmitters of which 29 were self-help and 18 are completely new ones, but more work still needs to be done. The coordination between the public broadcaster, signal distributor and the regulator remains key in order to speed up the rollout of the low powered transmitters.

The review of the current signal distribution master plan is long overdue; the current master plan continues to perpetuate the apartheid plan. The review must take into consideration that the Group Areas Act no longer exists, and areas can no longer continue to be classified in terms of language. Swazi speaking people should access Ligwalagwala FM even here in Cape Town. This review must also take into cognizance of the ANC resolution for a national youth radio by considering the expansion of Tru FM foot print throughout the country as an option to implement this noble resolution.

Broadcasting Digital Migration

The benefits which come with broadcasting digital migration process are immense for the country (Job creation through set top box manufacturing). We are encouraged by the work done to-date by the department in terms of driving the digital migration policy framework; and more particularly in finalising the BDM policy and set-top-box manufacturing strategy. We further commend the work done by the regulator in leading the regulatory process and finalising the DTT migration regulations. Not forgetting the sterling work by Sentech for ensuring signal coverage.

The free to air broadcasters must understand that their continuous failure to play their part has consequences to the country in meeting the analogue switch-off date of June 2015. This delay will impact negatively on job creation; which is a key priority for the ANC-led government. It will further delay the freeing up of spectrum much need for technologies deployment.

We cannot afford to miss the analogue switch-off date of June 2015. We respectfully recommend that the free-to-broadcasters must be given a timeframe to finalise the issue of set top box control.

These free-to-air broadcasters are not accountable to voters like the ANC government does; it can therefore not be business as usual.

Addressing the proof-of-concept launch which took place in Kimberley in October 2012, I mentioned that the committee is concerned that the community television was not integrated in regulations, however today I am pleased to note that there will be capacity for at least three regional television stations in the DTT environment - this is indeed a significant milestone.

The 53rd National Conference of the ANC resolved on licensing and use of the Radio Frequency Spectrum, which is a public asset, and a central pillar towards the creation of an industry that is responsive to the needs of all the people. In order to facilitate the diffusion of ICTs across society, licensing of the scarce radio frequency resources should be underpinned by the following factors:

Alignment of the spectrum allocation and licensing regime with the prevailing social and economic development context, while taking into consideration future needs.
Equitable allocation of the frequency spectrum to new licences, including SMMEs, to reduce entry barriers
Requirements and obligations to achieve universal coverage. This should be linked to building regulatory capacity to enforce compliance with the law.
Promote Broad Based Black Economic Empowerment at the minimum of 30% to 50% direct ownership and control of ICT and broadcasting, including the empowerment of women and youth development. This must be achieved by 2020.
Industry Associations

It is comforting to witness that industry associations continue to promote robust debate in the sector. Particularly, the SOS, which was formed to create a public broadcasting system dedicated to the broadcasting of quality, diverse, citizen-orientated public programming committed to deepening South Africa`s Constitution, has been integral in initiating the ongoing dialogue in respect of the public broadcaster. Your efforts have not gone unnoticed.

In addition, I note the jovial relationship between the Department of Communications and the South African Communications which has been integral in inputs on the national broadband strategy and more recently the launch of the Women in ICT forum (which the Minister is a patriot of) and lastly the Youth in ICT Forum to be launched on 20th June 2013 (the Deputy Minister being an ambassador of this forum).

I lastly impress upon the Minister to formalize a relationship with the National Community Radio Forum (NCRF) as the department seeks to solidify its presence in community radio.

Conclusion

Debating shall ever remain an engine for human development and a key to nurture the potentials of our future, young people. Our failure to navigate on all these challenges will be a failure to provide solutions for the revolutionary gains our martyrs, stalwarts, heroes and heroines fought for and achieved in the nineteen years of our ANC-led Government.

As we reflect on the 19 years of democracy, I call upon the sector in its entirety to reflect on how we can better utilise ICTs to ensure that all citizens, notwithstanding geographical location and living standards, have access to information and communication services. How do we utilise these ICT resources to bring about economic and societal transformation.

Access to information [which is provided by these information and communication technologies] is a fundamental right enshrined in the Constitution of the Republic of South Africa.

In conclusion, I reiterate that the Minister must:

institute a skills audit in the Department, USAASA, NEMISA, ICASA and Post Office;
develop a National ICT policy that promotes the provision of universal access, quality and affordable networks services;
continue the dialogue between the public and private sector;
ensure collaboration between the Department and Government Communication and Information System (GCIS) in relation to community media;
expedite the broadcasting digital migration process;
finalise the broadband policy, strategy and consolidated broadband plan; and
provide a total solution for schools connectivity.
We are encouraged that the budget as requested is sufficient to address the requirements contained in this budget vote and will support the key national imperatives. We dare not fail our revolutionary duty

The ANC supports this budget vote.

Butch Steyn, Shadow Deputy Minister of Communications 

Highlights:
South Africa has a low rate of entrepreneurial activity for an emerging economy;
Limited attention has been paid to the role technological inefficiencies play in stifling entrepreneurship;
South Africa currently ranks 124th out of 182 countries for overall internet download speeds, comparing unfavourably to other emerging markets such as Brazil, Turkey, China and Thailand;
The ability to effectively conduct business and communicate online is an imperative for the success and growth of businesses.

Honourable Chairperson, honourable Ministers and Deputy Ministers, honourable Members and distinguished guests.

I have two speeches here – the one in my left hand is a copy of the speech I delivered during the budget debate last year, and the other is the speech I prepared for this debate. I was tempted, and still am, to deliver the exact speech I did last year. The reason, Chairperson, is that everything I said last year is still applicable right now – nothing has changed. 

If anything, things have gotten worse. 

After an intervention by the Portfolio Committee in the department’s strategic plan last year, their five strategic goals, which were supported by 17 objectives and 72 targets, were reduced to 12 objectives and 34 targets. This year, the 5 strategic goals are supported by 11 objectives and 28 targets. We are informed that the reduction in targets were largely due to consolidation and streamlining of targets and reprioritisation. It is also likely to be due to the implementation of a new budget structure derived from the department’s organisational review that began in the 2009/10 financial year, and implemented in September 2012. As a result of this review, the former Presidential National Commission programme was merged into the Policy, Research and Capacity Development program and the ICT Infrastructure Support programme was restructured, leaving only broadband and digital terrestrial television related activities. 

The Department now has five programmes as opposed to six.

In his 2013 State of the Nation Address, President Jacob Zuma pronounced that “to prepare for the advanced economy we need to develop, we will expand the broadband network”. According to the National Development Plan, broadband has a significant role to play across the African society. 

Chairperson, I cannot over-emphasise this enough and most of my speech is focused on this.

It is well documented that flourishing entrepreneurial cultures can play a leading role in creating jobs and oiling the wheels of the economy through the creation of continual economic and social innovations. Booming entrepreneurship in emerging markets such a Brazil, Turkey, China and Thailand has provided a key stimulus to the rapid increases in material living standards across these nations in recent decades. In comparison, South Africa has a low rate of entrepreneurial activity for an emerging economy.

Although much emphasis has been placed on the need to rectify issues like punitive regulatory burden and lack of financial capital, which constrict Small, Medium and Micro-sized Enterprise (SMME) growth, limited attention has been paid to the role technological inefficiencies play in stifling entrepreneurship. These inefficiencies are primarily the result of a monopolistic telecommunications sector which has been ineffectually regulated.

Consequences of such systematic inefficiencies include exorbitant telecommunications costs, frustratingly slow download speeds and generalised poor service, which reduce the overall use of internet services.

Data from Net Index, an independent internet monitoring service, currently ranks South Africa 124th out of 182 countries for overall internet download speeds, with a speed of 3.82 megabits per second. This compares unfavourably to other emerging markets such as Brazil - 7.20 megabits/s, Turkey with 7.9, China with 10.16 and Thailand’s 11.59 megabits/second. Even countries with far lower rates of economic development experience greater download speeds, such as Rwanda – 5.22 and Ethiopia with 5.42 megabits/second. Additionally, data on the costs of internet services is equally discouraging, with South Africa failing fundamentally in the provision of globally competitive prices.

These increased prices and slower download speeds, caused by a lack of competition, elevate costs for businesses, which subsequently reduce their overall profitability, small businesses being particularly vulnerable to such costs.

In an increasingly technologically dependent world, the ability to effectively conduct business and communicate online is an imperative for the success and growth of many businesses. This is truer still for small businesses, as conducting business activities online can significantly increase their overall scope and visibility by allowing them to market their products and services to a wider audience, to communicate instantaneously across international boundaries and to significantly reduce their overheads. This facilitates a substantial balancing of the corporate playing field, allowing smaller businesses to compete with much larger organisations in ways inconceivable in decades gone by.

Current initiatives to promote increased entrepreneurship through skills development programmes and increased access to financial capital are likely to prove insubstantial unless equal efforts are made to improve the overall efficiency of the national telecommunications framework. The livelihoods of the majority of the poor people in South Africa and in other developing countries depend on micro and small-scale enterprises.

Regular and easy access to the internet is an increasingly important tool to assist students to seek information and learn to write and do research. An analysis of findings from the 2011 Census found disturbing evidence that the overwhelming majority of black African students are highly disadvantaged in this regard. Without access to the internet students will have fewer knowledge resources at their disposal and be less experienced in how to deal with an oversupply of information. They will also be underprepared for making the move from the education system to the workplace.

The current broadband announcement, to achieve 100% broadband internet penetration by 2020, in my opinion, will be too little, too late. 

The success of this distant target, however, is dependent on both the public and private sectors, with the SOE’s within the department playing a significant role. Unfortunately, they still appear to be lurching from one crisis to another. We are all aware, and it has been mentioned by the Minister and others, that state owned entities, (SOE’s), are the delivery arms of government. Therefore, stabilising SOE boards and monitoring and compliance are crucial to ensure that they deliver on their mandates.

The late Minister Padayachie, in his Budget Speech in 2011, said, and I quote: 
“In our efforts to strengthen corporate governance within our public entities, work is under way to review and strengthen our capacity to conduct oversight”. 

The honourable minister Pule, in her budget speech last year, said, and I quote:
“Stabilising our state-owned companies remains a key priority for the department. This is key to ensuring that they discharge their service delivery mandates. To demonstrate our seriousness about these companies we have begun a process to capacitate the branch in the department charged with the oversight responsibility to ensure that the department is better informed about the activities of the state-owned enterprises, SOEs. Our goal is to ensure that by 2014 all our entities achieve clean audits”.

Minister Pule, you know as well as I, that not much has changed over the last 12 months to make the SOE’s efficient, and I want to tell the honourable minister today, your goal should not just be about achieving clean audits only, it should, and must be, about delivering those services that they are responsible for efficiently to the communities of our country.

I thank you.

Marian Shinn, Shadow Minister of Communications 

Highlights
Minister Pule neglects her obligations to parliamentary oversight, with 28 unanswered questions last year and this year’s performance does not look better;
The ICT Indaba has been famous for all the wrong reasons. The outcome of the Indaba is one of the many unanswered parliamentary questions loitering in the minister’s in-tray. In March I asked details of the progress of task team formed to implement the Indaba’s resolutions. The minister is silent on these matters of substance.
The department’s finances have been a mess for years and it fails to achieve most of its targets. The programmes and entities it oversees also fail to meet their targets.
The Department of Communications has failed to grasp that its core role should be to develop policy and regulate an information and communications ecosystem;
Government must sell its stake in Telkom. Telkom must become a willing collaborator in a wholesale infrastructure consortium that forms the backbone of a ubiquitous, high speed, affordable, robust communications ecosystem.
Under DA-governance, by 2020 every resident of Cape Town will have access to broadband infrastructure in excess of 100 Megabits a second. A globally competitive communications infrastructure is what the rest of South Africa can expect from the Democratic Alliance when it wins the national government in 2019.

If the Department of Communications was closed down, would South Africa’s Information and Communications Technology (ICT) sector miss it? What difference would its disappearance make to the way South Africa functions? 

These questions were put to department officials during the communications portfolio committee’s interactions with the department on its strategic report and budget plans. And they were questions the officials could not answer.

One of the tragedies of South Africa’s fledgling democracy is that is has been so thoroughly undermined by government departments that are critical to the liberation of our people: education and communications are two of these.

The Department of Communications has, during the past 20 years failed to grasp that its core role should be to develop policy and regulate an information and communications ecosystem. This would enable citizens to exploit the opportunities technology offers to leap out of generations of oppression and disadvantage and prosper.

It made a few tentative steps to liberalise the market and bring in competition. The half-hearted liberalisation of fixed-line infrastructure through the privatisation of Telkom was a start, but then government hobbled this by holding the majority of its shares.

The folly of this was proved last year when the honourable minister pulled the plug on Telkom’s turnaround deal with Korea Telecom Corporation. This was then compounded by her naive interference in the company’s Annual General Meeting (AGM), which jeopardised its corporate governance. It has yet to recover and produce a coherent strategy that is better than the one the minister destroyed last year.

Government must sell its stake in Telkom. Telkom must become a willing collaborator in a wholesale infrastructure consortium that forms the backbone of a ubiquitous, high speed, affordable, robust communications ecosystem.

The Department of Communications lacks the appropriate skills to be the custodians of the ICT environment that sparks opportunities for economic growth and global competitiveness. 

Who can take seriously the strategists who placed broadband as their top priority of the year, and then ranked the availability of radio spectrum at number eight? You cannot have the one without the other. This indicates a serious lack of skills and understanding at the very top of the Department of Communications. 

The department’s finances have been a mess for years and it fails to achieve most of its targets. The programmes and entities it oversees also fail to meet their targets. 

A few pointers from Parliament’s research unit for the finance and public cluster that landed on our desks last week - and I quote:
Over the five-year period (until financial year 2010-11) the Department of Communications and the Department of Public works were two of the lowest spending departments;
The worst perpetrators of fiscal dumping include the Department of International Relations and Co-operation and the Department of Communications;
The Department of Communications emerged as the worst spending department at only 66,8%.

This negligence in doing the job properly starts at the top. The honourble minister neglects her obligations to parliamentary oversight. At the end of last year she left 28 parliamentary questions unanswered - the second highest tally of all the ministries. And so far, this year’s performance does not look much better.

Now, there are those who will say that the honourable minister has been in this post for only one-and-half years, and that she needs to be given time to turn around the damage of her predecessors. Maybe that is true, but let us looks at what the minister has achieved so far. 

1.    She initiated - at last - an ICT Policy Review process that was long overdue. But it took a year to be assembled and - with due acknowledgment to the panel that met for the first time at the end of January - produce its policy framing paper for comment. 

I am concerned that, instead of instigating a positive disruption that would release creativity about the ICT ecosystem, the panel is split into conventional silos that could steer them in a direction that serves political, rather than national needs.

2.    The department has rushed out six new pieces of legislation. Of particular concern is the Independent Communications Authority of South Africa (ICASA) Amendment Bill that emasculates this Chapter Nine regulator by vesting much of its powers in a proposed Spectrum Management Agency. This promises to be another bureaucracy for cronies in search of inflated salaries and tenders to manipulate. 

Do the hard stuff, honourable minister. Fix ICASA. Give it the money and skilled resources it needs to do its job properly, and resolve the policy development conflicts. Put radical legislative changes on hold until the policy review is completed.

3.    Then there is the ICT Indaba - famous for all the wrong reasons. The outcome of the Indaba is one of the many unanswered parliamentary questions loitering in the minister’s in-tray. In March I asked details of the progress of task team formed to implement the Indaba’s resolutions. The minister is silent on these matters of substance.

4.    Next there is the matter of the minister’s unlawful action to unilaterally switch the responsibility for the set-top box control system from free-to-air broadcasters to Sentech, clearing the way for the minister’s preferred supplier, Nagravision, to implement the control system. 

E.tv’s rightful legal challenge took eight months and stalled the digital migration process. 

Now the honourable minister and her acolytes in the department bewail that e.tv’s legal challenge is the cause of the delay in rolling DTT (Digital Terrestrial Television). How delusional is this? You may believe your spin, honourable minister, but the rest of the nation doesn’t. You can’t duck your negative role in this process.

Another question, not yet answered by the minister is: What the taxpayers have had to pay to the lawyers briefed to defend the indefensible. The portfolio committee was told by Sentech and departmental officials that the legal bill for this ministerial whim is about R1.4 million. Sentech’s bill alone was R798 000 and the department’s is R579 000 and rising. Why is the minister too embarrassed to answer the question herself?

5    Which brings us on to the South African Broadcasting Corporation (SABC), whose legacy of inappropriate - and possibly illegal -appointments to executive management will cripple this organisation for many more years to come. One of the reasons why the ANC deployees on previous board were told to resign may well be because they were being far too diligent in evaluating the bids for the set top box access control system.

At one of her last meetings with the previous board the minister instructed it to accept the Nagravision bid.

Why? Is it because its Nagravision - and its local agents African Union Communications -submitted a bid that was R47-million more expensive than the two other bids on the table? Who, minister, stands to profit from your influence?

By the way - whatever happened to broadband, local loop unbundling and spectrum allocation? These are the critical issues that South Africa needs unlocked to become an economic powerhouse - and the department shows no urgency in driving them.

National Treasury has put a hold on funding broadband until the department comes up with a coherent, acceptable policy and plan to implement it. 

Another draft broadband policy was recently put out for public comment - but it was a lukewarm effort and is overshadowed by the National Development Plan’s chapter on ICT which, incidentally, had little input from the Department of Communications.

This brings me to the issue of the allocation of much sought after spectrum. An audit of what spectrum is available and being used has been done and is being kept under wraps. Why? There must be transparency on what is a national resource so we can see what’s being used and how much is available before it is priced and released to market. If there is secrecy we stand a real risk of paying too much for access to resource that may not be scarce at all. 

And local loop unbundling, which would bring down the cost of fixed line access and increase demand for fixed broadband services to home and work premises? There are regulations being drafted for comment, but again, urgency is lacking as the deadline for these is set for next March. Telkom’s lack of direction is also having a negative impact on opening up this network.

While all this prevarication is going on South Africa slips further and further down the rankings of ICT-empowered nations.

In 2003 the World Economic Forum’s Networked Readiness Index ranked South Africa 37 - ahead of Brazil at 39 and Mauritius at 43. These countries have now overtaken us. This year Mauritius is at 55 and Brazil at 60. South Africa has slipped to 72.

The GSM Association - a body that represents mobile telephone operators worldwide - has just opened its Africa office in Nairobi because that’s become the African hub of mobile communications. Johannesburg or Cape Town could have been that hub - but we’re not.

This is a pity because our mobile application developers keep winning international accolades. Of the 30 top brilliant African technology startups - as determined last year by VentureBurn -13 were from South Africa - the highest number from any nation. Many of these innovative, nimble developers are based in Cape Town, which is rapidly becoming the location of choice for high-powered creative talent. 

They are coming to this city and the Western Cape because, where it governs, the Democratic Alliance delivers on technology’s opportunities for interactive service delivery for all the people who want to live and work here.

The province aims to deliver affordable high-speed broadband access to citizens in every town and village in the Western Cape by next year - that’s only five years since winning the government off the ANC. By that time 70% of provincial government buildings, rural libraries and schools will have high-speed access to the internet.

By 2020 every resident of Cape Town will have access to broadband infrastructure in excess of 100 Megabits a second. 

This is the critical nervous system that will turn Cape Town into an Opportunity City - a city that attracts investors and innovators to establish growing, globally competitive enterprises that offer work opportunities to Small Medium and Micro-sized Enterprises (SMME’s) and individuals with a passion to excel and contribute to our nation’s growth.

A globally competitive communications infrastructure is what the rest of South Africa can expect from the Democratic Alliance when it wins the national government in 2019 - that’s in six years’ time. 

We have a vision of a dynamic and robust technology-driven nervous system, designed and managed by the best appropriate skills to rigorous standards, to drive service delivery to empower citizens and entrepreneurs.

We see government’s role in ICT as the facilitator serving the communications needs of a productive, healthy and well-educated citizenry. It will be the nervous system through which they connect and prosper in an open opportunity society. Connected cronies will be a thing of the past.

So, will we miss the Department of Communications if it closed down? I think the nation would proposer without it