Minister of Telecommunications and Postal Services Budget speech & responses by ANC and DA

Minister of Telecommunications and Postal Services, Mr Siyabonga Cwele, gave his Budget Vote speech on the 10 May 2016

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Accelerating Broadband Access for Ordinary South Africans

Honourable House Chairperson,
Honourable Members,
Distinguished Guests,
Fellow South Africans,

INTRODUCTION

It is an honour to present Budget Vote 32 on Telecommunications and Postal Services worth R2.4 billion for policy debate and approval by Parliament. This year calls upon our nation to celebrate historic events which have contributed to the democracy we enjoy today. A 100 years ago, the University of Fort Hare was established and has been instrumental in educating many of our leaders who fought for our liberation. We celebrate 60 years since the heroic women's march to the Union Buildings in protest against the unjust pass laws. We commemorate and salute the bravery of the young people who on 16 June 40 years ago, rose against a repressive apartheid education system.

All of these anniversaries are a testimony to a consistent and selfless struggle by the African National Congress, working with all people to liberate us from colonial apartheid oppression and lead us to a united, non-racial, non-sexist, democratic and prosperous nation. As we move towards local government elections, even the most critical opponents agree that in the past five years the ANC government has delivered massively on basic services such as water, housing, electricity, roads, telephony, health and education for all. We will continue to work hard because we care about people like you.

Working together, we have acquired experience and commit to work harder to improve local service delivery and strengthen the fight against crime and corruption. The future of local government is in your hands. We invite you to join us on the journey to a prosperous nation. 'Sishoda Ngawe'. We call upon all our compatriots to go their municipal offices to register their addresses to enable them to vote for their councillors on August 3, 2016.

Malunga ahloniphekileyo

Our economy is facing difficulties due to the slow global economic growth. Our government is responding by an enhanced implementation of the Nine Point Plan to grow the economy as announced by His Excellency President Zuma. Investing in modern Information and Communication Technologies (ICTs) is one of the crosscutting measures to ignite growth, create jobs and cushion the poor. The access to fast, reliable and affordable internet is a critical enabler of socio-economic development. It remains the most powerful equalising tool available to humankind within and between nations.

House chairperson,

IMPLEMENTATION OF SOUTH AFRICA CONNECT OUR BROADBAND PLAN

South Africa is making strides in the rollout of broadband as a result of government and private sector investments. In 2015 our telecommunications operators invested R23.5 billion and were planning to increase it to R26 billion this year.

We are making progress towards our 2019 mobile broadband target of connecting 80% of the population. The mobile broadband 4G/ LTE coverage now stands between 35 and 53%.

Manene namanenekazi siyaqhuba.

The Universal Service and Access Agency contributed in the upgrade of all base stations at Mutale municipality in Vhembe District and Chief Albert Luthuli Municipality at Gert Sibande District in order to improve Internet connectivity in these municipalities. In addition, USAASA connected three special schools for students with disabilities namely Phumlani in Albert Luthuli, Fhulufholo in Mutale and Tsolo in Eastern Cape. This year USAASA will focus on upgrading base stations in Mhlontlo and King Sabata Dalindyebo Municipalities in the OR Tambo District.

State owned companies are the largest investors in the fixed line broadband coverage with Telkom having more than 147 000 km of fibre. In September 2015 Telkom announced their plans to connect 500 000 homes to fibre by December 2016, growing to one million homes by 2018.

Broadband Infraco (BBI), despite its funding challenges spent R203 million to add 1000 km of fibre to its network and established 24 Points of Presence (POP). This year BBI will invest R75 million in infrastructure including for additional 17 POPs.

In 2015 SENTECH spent over R150 million towards infrastructure upgrades related to service diversification in a bid to increase coverage of vernacular language services for both the public and community broadcasters. This year SENTECH will spend over R500 million to sustain its current services, and expand its services and coverage.

Fellow South Africans,

Phase 1 of government broadband roll out in 8 districts is almost ready for implementation after long planning, consultations and agreeing on coordinating structures with the 8 municipalities and relevant provinces. In this financial year, R316 million has been allocated to connect 2700 government facilities to scalable broadband infrastructure. The department is working with SITA to finalise the process of appointing the service provider in line with the Public Finance Management Act.

We have also finalised the planning and costing for phase 2 to the rest of municipalities. Unfortunately there is no allocation in the budget because of the economic downturn. We are looking at alternative funding options including from our private sector and development finance institutions.

Malunga ahloniphekileyo,

OUR CONTRIBUTION TO MUNICIPAL FREE WIFI ROLL OUT

The July 2015 Cabinet Lekgotla received an inspiring report on the municipal free Wi-Fi program. , which was lead on the main by Tshwane Metro with over 715 funded operational sites followed by Ekurhuleni, City of Johannesburg and Cape Town. Cabinet directed our department to expedite this programme. We set aside R40 million to assist those metro municipalities that would demonstrate capacity and plans to spend before the end of March 2016.

I am pleased to report that Nelson Mandela Bay has completed all 17 sites to provide free connectivity to the people of Zwide, Kwanobuhle, Korsten, KwaMagxaki, Motherwell and KwaZakhele.

Tshwane also completed connecting 61 sites for the benefit of people of Mabopane, Saulsville and Winterveld.

Ekurhuleni has completed their 43 sites in Alberton, Benoni, Daveton, Springs, Katlehong, Voslorus, Thembisa, Tsakane and Nigel.

Cape Town is on track to complete its 28 sites in Athlone, Goodwood, Khayelitsha, Gugulethu, Harare and Crossroad.

Johannesburg is working hard to complete 47 sites in Alexandra, Diepsloot, Tsepisong, Ivory Park, Doornkop, Orlando East, Dlamini, Lawley and Protea East.

After initial delays Mangaung will also complete connecting 35 sites in Bloemfontein, Thaba Nchu and Bosthabelo.

Dr KK Kaunda District Municipality has been the star performer outside metros and has through its own resources, rolled out free Wi-Fi across all its local municipalities. Let us welcome Cllr Pinky Moloi joining us today all the way from the Dr KK District.

What is most encouraging is that most people use free Wi-Fi for educational content, job opportunities, small business development and marketing. Free Wi-Fi is daily bridging the digital divide. We encourage all our municipalities to set aside funds for this empowering programme for affordable internet for all. We have learnt from the best practices and stand ready to assist municipalities with sustainable Wi-Fi programmes.

Let us welcome in the gallery Martin Nyokolodi who is a social entrepreneur who runs an internet radio station over free Wi-Fi targeting the youth in Soshanguve and the Tshwane City centre. He did so despite the lack of funds which took him out of his studies at Tshwane University of Technology.

House Chairperson,

THE CYBERSECURITY HUB

On 30th October 2015 we launched our National Cyber-Security Hub to assist business, NGO's and citizens to protect themselves from attacks while using Internet by issuing alerts, general awareness and resolution of reported incidents. By the end April 2016 the Hub received more than ten thousand incidents of which 75% were classified as low risk and only 10% as high risk. The frequently asked questions on the website relate to banking phishing scams, cybercrime fraud, verification of hoax messages, property scams, identity theft, cyber bullying and other intrusions and denial of availability.

The development of the Hub has followed a phased approach. It was launched with a set of basic systems and tools for reciving and analysing cyber-security incidents. The website is currently being upgraded to interactive functionality that will be available at the end of June 2016.

This upgrade will be immediately followed by a further phase of development which will include social media platforms for reporting incidents. All of these developments form part of the roadmap to full international certification of the Hub, which is envisaged to be completed by next year.

Fellow South Africans

THE SOUTH AFRICAN POST OFFICE

The South African Post Office (SAPO) remains a strategic entity for extending government, e-commerce and financial services to South Africans far and wide through its approximately two and a half thousand (2 448) outlets.

Last August, we appointed a new board to guide the operations and bring stability to SAPO. We have also begun the process of cleaning up and strengthening its management.

In January this year, we appointed Mr. Mark Barnes as the CEO who brought a breath of fresh air to SAPO. Plans are well under way to finalise the appointment of a CFO and other senior officials to drive the growth and stability of the company.

SAPO is correcting the maladministration of the past ten years by implementing the recommendations of the Special Investigating Unit (SIU) and the Public Protector, alongside its home grown Strategic Turnaround Plan.

SAPO's financial stability continues to be our top priority. This year, SAPO received a R650 million capital injection. This may look like a drop in an ocean as the company urgently requires about R3.7 billion to stabilise it operations and start implementing revenue generating initiatives. Our department will continue to offer the necessary support that will enable SAPO to raise additional funding from the markets. I am confident that the CEO will soon finalise a domestic syndicated loan facility towards the required funding.

Despite current challenges, SAPO managed to assign over 261 000 addresses to households in the rural and informal settlements.

Honourable House Chair,

POSTBANK

The ANC government remains committed to ensuring the Postbank becomes a developmental bank that will provide simple, easy-to-understand financial products and services for the unbanked and underserviced. Last year alone, the Postbank opened over 219 000 new savings accounts for the unbanked.

In February 2016, SAPO complied with all the section 12 requirements for a permission to establish a full banking company. We are awaiting the response from the South African Reserve bank which will lead to compliance with section 13 requirements for establishing of the bank such as;

The appointment of the Postbank Board,
The incorporation of the Postbank Company, and
The registration of the Bank Controlling Company.
House Chairperson,

FINALISATION OF THE INTEGRATED ICT POLICY WHITE PAPER

Last year we committed to table a new Integrated ICT White Paper before the end of March 2016. The policy is in its final stages of consultation and approval as we plan to finalise it in the next few months. This policy is informed by the developments, innovation and convergence of technologies in the ICT sector. It is our tool to implement what is envisaged by our National Development Plan. It is based on the equality provisions of our Constitution and introduces a range of interventions to ensure everyone in South Africa, irrespective where they live or their socio-economic status can access the benefits of participating in the digital society.

The new policy proposes radical supply side interventions to accelerate inclusive growth of the industry. It will redu barriers to entry by moving away from monopolistic infrastructure based competition, to open access broadband networks. A new spectrum policy will support open access networks as it aims to open the use of high demand broadband spectrum for use by all licensees while adequately compensating those who invest in infrastructure.

The ultimate target is to benefit the consumer by increasing consumer choice, reduce costs, increase innovation, and encourage all consumers to fully experience the Internet.

The White Paper proposes a rapid deployment policy that will provide a simplified, streamlined and nationally coordinated framework to accelerate the deployment of electronic communications networks. This will drastically reduce the costs to operators and ultimately the consumers.

Distinguished Guests,

SOUTH AFRICA'S INTERNATIONAL ICT AGENDA

Last year, we participated in the World Radio Congress (WRC-15) where South Africa led negotiations on critical agenda items such spectrum for mobile broadband (IMT), the protection of spectrum for Digital Terrestrial Television, unmanned aircraft, and Global Flight Tracking. We are proud to announce that we obtained an additional 487 MHz of spectrum for mobile broadband which will assist us to expedite the deployment of these services, especially to the rural areas. This year we will prioritise the finalization of the our National Radio Frequency Band Plan as required by our legislation.

We led discussions at the World Summit on Information Society (WSIS) UN High Level Meeting, on behalf of G77 and China, to advanced equitable safe use, governance and availability of internet to all global citizens.

As a member of the African Union Bureau for Ministers responsible for ICTs we will continue to explore options for the affordable digitisation of Africa.

Tomorrow, Deputy President Ramaphosa will lead us to WEF Africa in Kigali to position Africa for the 4th Industrial Revolution, which is driven by the Internet of Things.

I was also elected into the UN Broadband Commission, where we together with other global influential ICT leaders are advancing ICT programmes, specifically broadband strategies for sustainable development. There are 3.2 billion global citizens who are connected to the internet. Our mission is ensuring universal access to the internet, by connecting the next 4 billion.

We will also work with our BRICS partners in increasing skills, innovation and collaboration among our companies. This year we will train 40 students and experts in ICT skills in China as part of this collaboration.

Later this year, South Africa will participate at the Universal Postal Union Congress, where we have been given a responsibility to chair the Future Strategy programme for the growth of the postal sector.

Honourable Members,

DEPARTMENTAL MATTERS

I have made progress in resolving the leadership challenges in the Department which impacted negatively on the timely delivery of the Department's outcomes. To this end, I established a fact finding inquiry by the Public Service Commission (PSC) to investigate an alleged paralysis after I met with all branches in the Department.

The PSC has produced a report and made recommendations of which we are implementing. I am confident that the implementation of these measures has begun to foster an increased focus on the performance of the Department towards delivering on its mandate.

I am closely monitoring the various SIU reports on our entities and the Department which have been released and those which are expected to be released during the course of the year.

Fellow South Africans,

CONCLUSION

The long walk to the vision of a connected South Africa as envisaged in the National Development Plan has begun. It may be long and difficult as we connect the remotest areas of our country but we know that walking and working together united in our efforts to bring about an inclusive society we will succeed.

I would like to extend a note of gratitude to the Department, the Deputy Minister, Parliament and all stakeholders in the ICT sector for your support.

I am confident that the house will endorse this Budget Vote for the Department of Telecommunications and Postal Services.

I thank you.

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Budget Vote Debate By The Deputy Minister of the Department of Telecommunications and Postal Services, Hon. Prof. Hlengiwe Mkhize during the Occasion of DTPS Budget Vote No. 32

Theme: "Accelerating Broadband Access for Ordinary Citizens"

Hon. Minister Dr. Siyabonga Cwele,
Ministers and Deputy Ministers
Chair of the Portfolio Committee NK Kubayi
Honourable Members
Special Guests
Captains of Industry
Honourable Speaker,

We present this budget vote during the 60th anniversary of the Women's March to the Union Buildings and the 40th anniversary of the Soweto Uprings. These are acts of courage which give us strength as we tackle deeply rooted historical problems, which have created a mostly unequal society.

It is proper and fitting to briefly reflect on some of last year's commitments:

School Connectivity Programme
Creation of Localized ICT Hubs - the improvement of e-literacy (e-Skills), e-enterprise, youth inclusion and local economic empowerment.
Enterprise development for SMEs
Provision of e-government services
Transformation of the ICT Sector
We are today accounting on progress made, claiming no easy victories, by also reflecting on perennial challenges. The school connectivity programme is a good story to tell. Currently we have connected a total of 11, 528 schools nationally. Of the 11, 528 connected schools, 3, 793 are located in rural areas and 6, 223 are in urban areas. The Department of Basic Education in many regions has initiated training modules for teachers on digital literacy. When we launch the school laboratories, we have been amazed by the number of parents and citizens who attend and express appreciation on behalf of the community.

We would like to congratulate the Gauteng MEC of Education Hon. Panyaza Lesufi for migrating the schools registration process on-line. This is a true example of our government in action.

With the launch of the Presidential Operation Phakisa, one of the streams is the use of ICTs in education.

As we are debating today, we have some of our guests who are witnesses to the work we have done in their different areas, looking at the gallery, for instance, the principal of Mathole High School is a witness to the fact that a child
from Edlebe Mahlabathini, has access to the computer and can access the curriculum on-line like a child at Bishop's Court in the Western Cape. The school connectivity programme talks to our ability to partner with the private sector and we commend the commitment made by some companies who have gone beyond the bear minimum requirements prescribed by the regulator. MTN left the memorable joy at Hluhluwe, uMkhanyakude District Municipality, during the launch of the school laboratory, when realizing the plight of rural children travelling long distances to school barefooted, made a second visit and warmed the hearts of villagers and school going children by giving them bicycles, shoes and lunch bags.

In our good story to tell, we acknowledge people like Prof. Darelle Greunen from the Nelson Mandela Metropolitan University who works tirelessly in connecting rural communities and use the connectivity to promote mobile health. We will continue our efforts in increasing the number of connected primary health care facilities especially in rural areas so that even home-based care-givers in rural areas can access health experts often concentrated in big cities. The municipalities in regions like Ekurhuleni have already connected a significant number of their health care facilities.

We recently visited the agricultural plant owned by the youth, in Ncera, OR Tambo region, whose agricultural plant was set up with the assistance of companies operating in the surrounding areas. To their representative sitting in the gallery, we want to assure you that access to the Internet will help you gather information on expert advice about suitable fertilizers, the e-environment, how to access finances and markets.

Honourable Speaker,

South African Youth Participation in the Global Information Society

Our first democratic President, uTata Nelson Mandela gave a promise to this generation that they will be citizens of global information society. The challenge for us has always been to connect rural areas. Our first democratic President, Tata Nelson Mandela when addressing the 7th World Telecommunications Forum and Exhibition on the 3 October 1995 in Geneva, emphasized the importance of skilling young people for the information revolution, he said: "Many of us here today have spent much of our lives without access to telecommunications or information services, and many of us will not live to see the flowering of the information age. But our children will. They are our greatest asset. And it is our responsibility to give them the skills and insight to build the information societies of the future. The young people of the world must be empowered to participate in the building of the information age. They must become the citizens of the global information society. And we must create the best conditions for their participation".

The digital revolution is about the five A's, namely:

Availability of broadband network - especially in the most remote rural areas.
Awareness - broadband rollout should not only be for its own sake, if people are not aware of the value of being connected they simply can't enjoy the benefits of being online.
Accessibility of broadband at a national level - once there is connectivity, there should also be connectivity to the village as well as connectivity to the home.
Affordability - data is expensive, connectivity without internet access is worthless. Our people must get access to the network infrastructure as well as access to the data services, hence our bias towards open access networks.
Ability to use the applications.
Honourable Speaker,

Government's Policy/Position on Skills.

Compatriots, in this financial year we have made an allocation of R95.6 million for Policy Research and Capacity Development.

Our SA Connect Policy has identified human capital development as a key success factor in ensuring social and economic inclusion in the Information Society and knowledge-economy. Six percent of the budget in each organization should be earmarked for skills. Awareness about ICTs have shown that rapid deployment of technologies to communities are not an end on its own. What is needed is a shared dynamic skilling program, which puts trainees in a pipeline, from acquiring basic computer skills to advanced skills for accessing internet economies.

We are in discussion with the Departments of Labour, Public Service Administration, Higher Education and Training amongst others. In our discussions issues which are being addressed includes: e-Education to drive a digital the economy, investment in the R&D and skills for knowledge economy, Internet connectivity for rural economy to stimulate growth and opportunities for entrepreneurship and the development local skills for knowledge economy.
Honourable Speaker,

The merger of the National Electronic Media Institute of South Africa, the e-Skills Institute, and the Institute of Satellite Software Applications to form the Ikamva National e-Skills Institute was initiated to address the overlap, duplication and gaps in e-skills development within and between government departments, the education sector, business and civil society.

Honourable Members,

We are supporting the process of establishing the institute with an increased funding of R126.4 million over the medium term transferred to the National Electronic Media Institute of South Africa in the ICT Enterprise Development and Oversight programme.

The DTPS established NEMISA which today has community labs, we also have the MIC SETA for workplace ICT skills training and all these innovative ideas are informed by the realization that, broadband roll out and the deployment of all other connecting technologies, require a skilled society for rapid uptake and possible contribution to the sector through the deployment of local content and many other forms of innovation.

For our skills pipe line to yield the desired ultimate goals, categories under environment, socio-cultural and economy, should be at the center of the skills production line as they are best suited to determine and predict critical skills, which could enable participation throughout the business value chain of the ICT economies of scale. The digital revolution is another opportunity for us as a country to meet the country's set targets for the number of disabled people who should be employed in each and every organization. All our technology tools can be designed to compensate all forms of disabilities. We have to work closely with the umbrella body of disabled people, as this body has a wealth of knowledge in terms of their members' needs so as to be able to function effectively.

Also as a sector, we have to generously massify the techno-girl program as per the company size. This program serves as a transformative agenda, as it prepares girls to meet requirements in faculties like engineering, science and technology. The programme is an effective transformation tool as it prepares young girls to be experts in computer science, software development and many other related subjects.

Honourable Speaker,

Connectivity for Dealing with the Triple Challenge: Inequality, Poverty and Unemployment

During this medium term, one of our key focus areas will be the ongoing rollout of South Africa Connect, the department's broadband policy. We have put aside a funding of R500 million with a clear bias towards connecting under-serviced areas, prioritizing schools, health facilities and other government institutions.

The costs of a digital divide are incalculable. Prevalent research studies show that Information and Communications Technologies (ICTs) are laden with economic and social opportunities, of which once unleashed herald increased country competitiveness, economic growth and improved human development results.

Broadband is a widely recognized catalyst for socio-economic development and research has discovered that there is a positive correlation between the high penetration of broadband services and the socio-economic development. For example, 10% of broadband penetration will on average contribute about 1.3% of economic growth.

The country's vision 2030, the National Development Plan (NDP) has two time-bound ICT-related goals for Government, i.e. :

a) 100% broadband penetration by 2020, and
b) the adoption of a full e-Government approach by 2030.

The NDP also envisages a "seamless information infrastructure to meet the needs of citizens, business and the public sector, providing access to the wide range of services required for effective economic and social participation - at a cost and quality at least equal to South Africa's competitors".

Honourable Speaker,

The Use of ICTs to Attain the Sustainable Development Goals

The United Nations (UN) Heads of States have at a high-level meeting of the UN General Assembly in December last year, reaffirmed their commitment to utilize Information and Communication Technologies (ICTs) as an essential tool for achieving the Sustainable Development Goals (SDGs). Already the International Telecommunications Union (ITU) has begun work to link the World Summit on Information Society action lines and the Sustainable Development Goals (SDGs).
SDG 5, speaks to achieving gender equality and empowering all women and girls, is directly linked to the WSIS Action Lines C1, 3, 4, 5, 6 and 7. Governments have the important role of creating an enabling environment that is safe and secured and inspires confidence amongst women.

Ilitha Labantu and PWMSA will be offered training on the interlinkages between WSIS Action Lines and the SDGs with the ICTs to harness the cross-cutting potential of ICTs as a driver for development and socio-economic growth.

In this regard, as part of our inclusive digital agenda, we will pursue multi-stakeholder relationships with various research bodies such as the Internet Society. This will be to ensure that women from our communities acquire the necessary digital skills and benefit from the educational opportunities from our own home-grown agencies like NEMISA and other Universities of Technology thus fostering long-term partnerships with employees, entrepreneurs, facilitating SME opportunities and economic growth.

Honourable Speaker,

Sustainable SME Business Development.

Chairperson we have a responsibility to ensure growth of our ICT SMEs, we have set aside R13 million for the SME Development. Linking the World Summit on Information Society (WSIS), action lines and sustainable development goals, we all have to come to the table and support women owned SMEs. This is an opportunity for all of us to collaborate and integrate our women empowerment programmes. The Post Office, with its foot print throughout the country, including the most remote rural communities, could be used to ease the burden in the SME distribution channels, by focusing on specifics like e-agriculture, linking it with e-health, e-financial services and poverty reduction.

Honourable Speaker,

What we see emerging at all spheres of government whereby there are ICT hubs which support connectivity as well as SME development is as a result of government's concerted effort that our people must be connected.

The multi-stakeholder approach allows all of us to bring our expertise, in a step up program for promoting gender equality and mainstreaming in technology. The ITU has made this one of its programs working in partnership with UN Women, under a programme called GEM-TECH. Our success could be a lasting memorization of the life and work of MAMA AFRICA in technology, Dr. Ivy Matsepe-Cassaburi who left a strong brand that ICTs are not only the privilege of the elite but are critical tools for connecting women to all opportunities commonly enjoyed by the few in affluent areas of our society.

Honourable Members,

The Department has brought a special impetus to our townships by assisting municipalities to increase the number of Wi-Fi hotspot in the neighborhoods where people gather for other functions like sports fields, women's resource centers and libraries and even the bus stops. Tangible uptake includes social, economic and environmental benefits such as sharpening ICT digital skills, facilitating easy access to research and information as well as promotion of innovation and creativity on-line, fostering inclusivity on a digital platform. Harmful sites are blocked to ensure that pubic Wi-Fi is not abused or harmful to users of different ages.

I have Mandisa from Ilitha Labantu and women from the PWMSA sitting in the gallery who have active users of Wi-Fi hotspots to access markets and a diverse wealth of information at their fingertips.

Smart Cities and villages with abundance of Wi-Fi hotspots are improving the lives of our citizens who are using the internet to carry out everyday tasks. It is also cutting down on previously time-consuming activities such as application of smart ID cards, filing tax returns, and conducting on-line registration for cars and business. We are also striving for a seamless digital economy ranging from access to public transportation timetables, monitoring of traffic flow, weather services, waste management and efficient energy and water consumption. The internet isn't just about technology, it's about making life easier and taking on board the human factor in every organization and community. We want to strive for citizen satisfaction and a cohesive society.

Honourable Speaker,

Online Security for the Youth, Children and Women

Young people and women face a myriad of challenges online but also have a number of opportunities available to them if well supported and guided. The Department has developed three sector-specific strategies to coordinate our sector and state machinery effort in the development and empowerment of our young people and women namely: Youth Development and ICT Strategy, Children Empowerment and ICT Strategy, and Gender Mainstreaming and ICT Strategy.

As part of the implementation of the Children Empowerment and ICT Strategy and in our quest to lead and contribute towards ensuring the safety of our young people online, we will engage the Department of Social Development (DSD), National Youth Development Agency (NYDA) and other relevant stakeholders to develop an ICT National Mainstreaming Programme which is envisaged to culminate into an ICT Summit aimed to achieve amongst others;

1. Development of the comprehensive Child Online Protection Programme.
2. Research programmes on cyber bullying, social cohesion, online behavior and parents support.

Honourable Speaker

Transformation in the ICT Sector

The excess of policies and legislation was promulgated under the Apartheid regime to deny black people access to economic productive resources and skills. In order to change all this, courageous and consistent interventions are required to address the past imbalances. It is with this in mind that the Department has put in place the Broad Based Black Economic Empowerment ICT Sector Codes.

The B-BBEE ICT Sector Codes were gazetted in June 2012 to support the implementation of B-BBEE in the ICT sector. The objectives of the ICT Sector code amongst others include:

To bridge the "digital divide" by actively promoting access to ICTs,
Advance economic and social transformation in the ICT sector,
To foster equity and address the legitimate economic aspiration of all South Africans,
To provide an enabling environment conducive to transparency, fairness, and consistency when adjudicating on matters related to BEE in the ICT sector
The Minister of Telecommunications and Postal Services established the Broad Based Black Economic Empowerment (B-BBEE) ICT Sector Council on 24 September 2015 after obtaining Cabinet endorsement of the 16 member appointed Councilors.

The DTPS has been providing administrative support to the Sector Council since its formation in September 2015 and will continue to do so in the next year and going forward. This is to ensure that the Council is fully operationalized.

Government will continue to partner with the sector stakeholders to contribute financially to the sustainability of the Council in ensuring delivery on its legislative mandate.

A great feat achieved by the ICT B-BBEE Sector Council was on its successful compilation and submission of the first Annual ICT Sector Monitoring Report to assess the implementation of Broad Based Black Economic Empowerment in the ICT Sector. I commend the Council and its leadership on this achievement despite an absence of any guidelines on the status of transformation in the ICT Sector and the limited time that it had to put the report together.

Honourable Speaker

ICT Research and Development

We are in the "4th Industrial Revolution" and this is an opportunity for us to find solutions to an inclusive developmental agenda for our people. Countries that have successfully harnessed the potential for socio-economic development from ICT have done so through deliberate strategies that promote domestic R&D, innovation and commercialization of new ICT products and services. These strategies recognize the complementary role of government, the research community and industry and promote what has been labelled "triple helix collaboration". The WEF states that "emerging and developing economies need to build their resilience against turbulence in the markets and foster their innovation potential in order to sustain rapid economic growth. Against this backdrop, ICTs - in their role as key enablers of innovation and new employment opportunities - are drawing more attention than ever before. As the benefits of ICTs increasingly materialize into tangible assets, building and strengthening digital ecosystems becomes increasingly important."

We are working closely with the Department of Trade and Industry to ensure that some of their Industrial Development Zones are earmarked for ICTs.

Honourable Speaker,

We are conscious of the fact that the speedy finalization and alignment of the SOCs is critical in ensuring that the Department delivers on its mandate. With the able guidance of the Portfolio Committee most of our SOCs have made significant strides.

We will continue to work very closely with our multi stakeholders for sustainable and inclusive development and growth of our economy. We thank the Acting Director General, Mr Mjwara and all the officials for their dedication to the success of the department.

I Thank You.
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Reponses

Speech by Hon M.T. Kubayi on the occasion of the Budget vote debate of the Department of Telecommunications and Postal Service


Hon Chairperson,
Minister and Deputy Minister of Telecommunications and Postal Services Dr. Cwele and Prof. Mkhize,
Members of the National Assembly,
Representatives of the Telecoms Boards and Senior Management present,
Captains of the industry, ladies and Gentleman

Today marks 22yrs since the inauguration of the first democratically elected President of the Republic of South Africa and the day that gave hope to majority of South Africans while others had fears of what is to come of the government led by a black President. It is through the historic speech delivered by Tata Madiba that gave assurance that indeed the ANC as the leading party was not about to abandoned its commitment to a non-racial society and its pronouncement that South Africa belongs to all who leave in it both black and white.

Let us continue to build upon the foundation that has been laid by our forebears and ensure that we don't temper with the pillars that build this country and its democracy. Ga re emeng gahlanong le bao ba tswelang pele le go kgetholla babangwe go ya ka mmala.

Chairperson, ICT is widely recognised as a potent tool for socio-economic upliftment. In this regard, the ICT market in South Africa has been expanding quickly and is likely to continue at an exponential rate in the years ahead, driven by rapid growth in mobile telephony, Internet economy- e-commerce, and the advent of broadband.

In his ninth SoNA, President Jacob Zuma said: "A resilient and fast-growing economy is at the heart of our radical economic transformation agenda and our National Development Plan (NDP)". The ICT sector is, therefore, the key to the success of the national economic policies of the country. Access to communications facilities is not only necessary for the delivery of services in critical sectors such as education and health; it is the essential backbone in promoting the country's developmental agenda.

Hon Members, the portfolio committee embarked on a process as required by our laws to scrutinize the annual performance plans and budget tabled by the department and its entities which are SAPO, SITA, SENTECH, .ZADNA, USAASA & USAF. We were not able to interrogate plans for two of our entities i.e. NEMISA and Broadband Infraco. I will deal with the issues of these two entities later, as I highlight our observations and recommendations of each entity.

It is important to note that the department highlighted that the tabled Strategic Plan 2015-2020 has been revised with targets that are measurable and achievable. The revision of the Strategic Plan is to ensure that it is aligned with the NDP, Nine Points Plan and the Medium Term Strategic Framework (MTSF). The department noted that the major priorities remained the broadband rollout, integrated ICT policy, national e- strategy, and e-government. These revised targets will make it easy for an effective monitoring and oversight function over the department by the portfolio committee. I am flagging this noting our comments in the previous budget during the 2015/16 financial year and it's comforting to see that recommendations made by parliament have been considered and responded to by the department.

Based on the tabled appropriations bill, the department has been allocated an amount of R2, 4 billion, an increase from R1,4 billion of the previous financial year, 2015/16. Of the total allocated budget for the current financial year, an increase from R728,6 million to R1,054 billion is allocated for transfers and subsidies. A significant portion of the budget is for the ICT Infrastructure Support programme (R1,1 billion), which is 49% of the total budget, and ICT Enterprise Development and SOC Oversight Programme (R891,8 million) which constitutes 37% of the total budget.

It is encouraging to see more focus and plans being channeled towards the development of ICT infrastructure which will further propel the agenda of universal access and services within rural communities. It is also encouraging to note that ICT Enterprise Development and SOC Oversight programme has been allocated the second biggest budget.

This is against the background that during the SoNA, President Zuma pronounced on plans to stimulate growth and create jobs as well as the need to empower SMMEs to accelerate their growth.

The NDP projects that 90% of new jobs will be created in small and expanding firms. One of the strategic outcomes of this programme is to promote the transformation of the ICT sector through the development of the ICT SMME strategy. Honourable Minister, it is therefore incumbent on the department to provide specific and practical strategies and guidelines on how this will be realized.

We are still concerned though, about the budget allocation of consultants that the figure is still high especially taking into consideration that major senior management level post have been filled in the department. Minister hi kombela kurhi meshwe lankuta leswe kurhi shwi ngayi mahlweni.

We appeal to the department to ensure stability in the department and its entities by making sure that newly appointed executive management and board members are people with relevant experience and competencies within the sector. Mphathiswa siyacela ukuthi ubukisise lomkhandlu wa phathi aba phezulu ku SITA, NEMISA no USAASA, sizobuye sixoxisane kabanzi ngaloludaba siyi komiti nawe.

Honourable Minister, the rationalisation of the state owned companies in the department's portfolio will have to be expedited in order to be in line with the recommendations of the Report of the Presidential Review Committee on State owned companies. Further delay on this will have a negative impact on the effectiveness of the affected entities.

On SAPO, we are encouraged by the stability at board level and the appointment of the CEO. The plans submitted are mainly focused on the business rescue and this is understandable taking into consideration of the state of the company. It has to be noted that the submitted plans incorporates some of the major projects from the turn-around strategy in ensuring that the organisation becomes profitable again.

The entity is expected to break-even in the latter part of the 2017/18 financial year. SAPO is also in the process of rationalising its properties, as part of the turn-around, and this will be done purposefully to ensure that properties are not sold at less than their market value. It is also encouraging to see that Postbank continues to do well and is not affected by the challenges experience by Post Office.

I would like to urge government to utilize services of both Post office and Post Bank. We need to see government leading in the forefront of showing confidence in the services rendered by this company. It has to be emphasised though that part of ensuring the success of the turn-around of the company will be doing business with some of the government departments.

Hon Members, It is better to fund Post office through doing business with it rather than just providing bailout, which is not sustainable. The current situation of funding SAPO through loans is not sustainable but more one of the highest risk the state is taking. The more concern what the loans are currently funding as this will not enable SAPO to achieve the turn around. The capital injection can't be used to fund salaries but should be used to re-capacitate the company to be more profitable and pay quality salaries and sustain jobs.

On SITA, as mentioned above we are concerned of the vacancies at the board level and the number of board members. We would like the minister to relook at the number of board members and the current arrangements of alternates. We believe that the company can function effectively with a less number of board members.

We raised a need for the SITA Act to be amended and it's unfortunate that this is not in the tabled plans of the department for 2016/2017 financial year. We are also still concerned of the top bloated structure of the company and believe it will not assist the entity to achieve its objectives. We urge SITA board and executive to look at our reports and recommendations and address our concerns.

On the SITA plans, it's encouraging to see the company has now refocused on its mandate and plans to address previous weaknesses. The company will be mainly focused on the implementation of the e-government services, ICT Security and streamline the procurement processes. It is important to note that Auditor-General had raised concerns around procurement which led to discomfort by clients/departments and in the process moving their businesses away from SITA to the private sector.

The SITA regulation requires that a project plan for the implementation is provided within ten days once a service has been procured and SITA has made a commitment to adhere to these requirements. The company has also committed to improve customer service and this will ensure an improved customer base.

On Sentech, the entity continues to be an exemplary model in the professional manner the company is run. The corporate plan tabled was of high quality and shows response on issues raised by both portfolio committee and the Auditor-General as this is factored into their plans. Our report recommends that this best practice be replicated in other companies within the portfolio.

We commend the department for ensuring that Sentech has board members with diverse and relevant expertise to the development of the sector and this can be used as a model and replicated across other entities with vacant posts.

Hon Minister, our concern is on the consequence of the DTT rollout delay on Sentech, the dual illumination funding is required to ensure that the entity doesn't find itself in strain financial situation in future. We are currently in discussion with PC on communication to convene a meeting with all affected entities and the two departments to deal with cost implications caused by the continued delay on the DTT rollout.

It is also important to note that the challenge for community broadcaster's sustainability is still a major factor and Sentech has committed to come with a plan to bring them on board as part of the enterprise development and subsidise the signal distribution costs. The committee has also recommended an urgent meeting between Sentech and Media Development and Diversity Agency (MDDA) to come up with a plan on how to support community radio stations.

On USAASA and USAF, the entity has done well in previous years and we are encouraged by the inclusion of audit outcomes to the performance plans.

Hon Minister, we are concerned though by lack of continuity and appropriate ICT skills at the board level of this entity. We appeal for the Minister to ensure that there are people with experience and expertise from the industry serving on the USAASA board taking into consideration the mandate of the entity.

The huge salary bill for the entity is also concerning while at the same time it highlighted lack of skills and expertise in their risk register as part of the challenges. The same issue was raised during the tabling of the previous budget vote and there has not been any improvement in this area.

We have also observed with concern the duplication of the department's work on broadband rollout by this entity and this can be perceived as the entity not being clear on its role and responsibility. We appeal to the department and Usaasa board to look at this matter and report to parliament.

Hon Members, we are further concerned about the presentation of the USAASA to the committee in relations to the DTT rollout project. We got a sense that there is shift from what was tabled and presented to parliament. As I said earlier, a joint meeting with PC Communication has been planned to deal with all our concerns related to this project, especially consequence of the delay to the entity and the country at large.

On .Zdna, the target is to ensure that the entity continue running effectively with a lean but effective structure. Minister, we noted a deficit during the tabling of the entity budget for the 2016/17 financial year and this is of major concern to the committee. The state owned enterprises are expected to deliver value to the shareholders and not take away from the state. The deficit means that the much needed funds are taken away from the government.

As mentioned earlier, the number of board membership remains a concern as some of these entities are small to warrant the huge number of board members. We urge the Minister to look into this matter urgently. Our report also recommends partnership with other departments to promote the work of the .Zdna based on the limited resources of the entity.

On both Broadband Infraco and Nemisa's plans, We were not able to interrogate the plans as the committee. BBI's corporate plan was withdrawn by the Minister and a request to table later was received. The current uncertain future of BBI needs to be resolved urgently.

Nemisa's plan was sent back by the committee due to the quality of the document and as well the need to have the establishment of iNesi as an institute finalized before plans can be approved. There is a need for clear direction and progress so that as parliament we are able to hold the executive accountable on the basis of the plans presented.

We are further concerned by the prompt resignation of the CEO, CFO and the Board Chairperson at this entity. We urge the Minister to pay special attention to both Nemisa and BBI and report to parliament.

Hon Members, the correct use and proper deployment of infrastructure and resources will assist our country to redress the past imbalances. I want to take this opportunity to Congratulate MEC Lesufi and team for the online admission system introduced in Gauteng. These are some of the good examples that shows that e-government will improve service delivery to South African citizens. This system deals with the challenges of access to education and ensures that even SGBs don't create barriers to entry into schools for learners.

In Conclusion, South Africa has an opportunity to improve the lives of its citizens in the most efficient and effective manner through the use of ICT. I will reiterate this each year in my speech until the situation has changed. The lack of infrastructure in rural communities continues to perpetuate inequality in our society. It impacts negatively mostly to women and children. We cannot afford as a country to still have areas where you are unable to make a call when globally people are competing on the speed of 5G networks. A child in the rural area must have the same opportunity as the child in the urban area. The broadband rollout is critical for the development of our communities and to grow local economies.

Bahlonishwa, icommitti licela ukuthi izinhlelo ne (budget) ezomyango wezokuxhumana nama Posi, nama kampani a wela phansi kwa lomnyango mawaxhaswe abuye amakelwe. Si amalungu ka khongolose si ya yi xhasa le budget vote
(Hon Members, the Portfolio Committee recommends that the department of Telecommunications and Postal services and its state owned companies plans and budget be supported and approved. The African National congress supports this budget vote.)

Thank you

Debate On Vote 32: Telecommunications and Postal Services by Hon Nokuzola Ndongeni

Honourable Chairperson
Ministers and Deputy Ministers
Honourable Members
Officials of the Department
Distinguished Guest and Fellow South Africans
Molweni

Hon. Chairperson: this budget debate takes place barely three months before the Local Government elections take place and it is important that we report to the society at large what the ANC led government has done and achieved so far.
The South African Post Office is mandated through its Universal service obligations licence agreement to provide postal and communication service to all South Africans at affordable price. The post office has faced some including a disruption of services labour unrest, intermittent strikes, and failure of good governance. There are some reason for this state of affairs including but not limited to poor management, the decline in revenues as a result of mail substitution. However, there is a government plan to stabilise the post office and ensure the implementation of a turnaround strategy to address the short to medium term challenges. To allow the organisation to attract funding and improve revenue, R650 million is allocated for in 2016/17 for the recapitalisation of SAPO. Again SAPO has been tasked with the responsibility of managing the distribution of set-set-top boxes and antennae for the broadcasting digital migration project and received an additional R480 million from the Department of Telecommunications and Postal Services over the medium term for this. The SA post remains a monopoly entity in the reserve mail business, which constitutes the biggest component of its business. The global trend has seen a steady decline in the letter mail volumes as other forms of communications pervade the market. The postal industry has been going through transformation to adjust to structural changes in its core mail business. The committee interacted with the leadership and management of the post office and we are happy with the development so far. The post office is on its way to recovery. The provision of broad band is crucial for economic development and must be extended to rural and underserviced areas so as to improve access, uptake and usage of ICTs to address the digital divide.

The ANC support budget vote 32 for Telecommunication and Postal Services. This budget talks to the need to be build capacity of the state by mobilising resources for the SITA and the committee to come closer to SAPO. Both the App and budget are aligned to the NDP.

The primary focused areas as outlined by the DTPS for SITA are e-government, data security and cleaning up procurement processes from the governance administration point of view. The e-government programme has been reviewed to making it simpler and getting results much quicker.

Hon. Chairperson

The approach on the issue of ICT security will be mainly to look and improve the skills that are required to implement effective data security. The first order of business is fixing all the government websites. SITA is at the end tail of the programme which will take all the government websites and put them in a secured area.

The procurement processes have been reviewed and what is now needed is to focus on is the implementation. The improvement on the turnaround time on the procurement of services from SITA will also be streamlined. The SITA regulation requires that a project plan for the implementation is provided within ten days once a service has been procured from SITA and this requirement will be adhered to.

SITA is also looking at all the systems hosted within their data centres and a full review has been completed and most of the systems are quite old. The approach is first to consolidate and stabilise the existing system while designing the new ones for later implementation.

The customer service management is also another focused area. There was a customer survey in 2013 and the results were below 40% of customer satisfaction even though the SLA reporting on the network uptime had been more than 95%. There is a clear disjuncture on the customer perception and the operations management of the organisation.

Hon. Chairperson,

For SITA to achieve and maintain the anticipated profitability, the organisation plans to focus on the following during the 2016/17 financial year:

* Service Delivery: the goal is to provide high-quality IT services to enable Government to deliver efficient and convenient services through the use of ICT.
* Infrastructure: to optimize the provision of SITA's IT infrastructure services in order to increase availability, flexibility, scalability, predictability and security.
* Procurement: to address all issues relating to delayed procurement turnaround times, removing customer pain points, and transforming the procurement function.
* Financial Sustainability: to ensure an effective and efficient financial management and ensure financial growth and sustainability
* Organization: to build and maintain organizational capability to enable SITA to achieve its strategic imperatives and becomes an employer of choice within the ICT industry.
* Governance and Administration: to provide leadership, strategic management, governance risk and resources management in line with government-accepted norms and standard.

Hon. Chairperson

We need to further highlight that the total number of targets for SITA in the financial year 2016/17 is about 25 and the company believes that with streamlined internal processes, it will deliver on the set goals. A lot of work has been done regarding strengthening internal capacities to deliver on these focused areas.

South Africa Post Office (SAPO): The Postbank had a critical role in the financial service environment of South Africa, especially as it concerned economically marginalised citizens and those who were not in reach of the banking sector. Within this broader theme of universal service and access, the Postbank would lead the expansion of access to banking services to the majority of citizens, mainly in rural South Africa.
Thus, SAPO will continue with the restructuring and corporatisation of Postbank to meet South African Reserve Bank requirements so that it can operate as a bank. Over the medium term, the organisation will focus on continuing to provide for access to postal and related services, and increasing the number of addresses to allow wider access to postal and financial services in under-serviced areas. The organisation expects to roll out 1,5 million community addresses over the medium term to allow both new communities and existing communities without street or postal addresses to receive mail.

Hon. Chairperson

The modernisation and adaptation of postal services is crucial to ensure their continued relevance and value, such that the existing postal infrastructure should be leveraged to provide an expanded range of goods and services to South Africans. Despite the declining trend in letter volumes, the postal services sector remains an important component of the economic sector in South Africa. SAPO is therefore an important national strategic asset, and its turnaround and sustainability is important to SA's broad long-term developmental goals. Furthermore, the SAPO's infrastructure has a far greater depth of reach to the citizenry than any other entity.

Hon. Chairperson

SAPO will aim to adapt to the rapidly changing environment, increase productivity, and improve business operations and financial performance while delivering on government's social mandate of providing postal services to areas that were traditionally neglected. Sisondeze inkonzo zeposi kweza ndawo zifana neNkantolo eBizana, eCungcwini eDutywa nako Hluleka eNgqeleni oku kukukhuthaza oosomashishini abancinci nokopolotyeni, bakwazi ukusebenzisa inkonzo zeposi.

Nogogo notatomkhulu bafumane imali zabo zendodla kufutshana. Nolutsha likwazi ukuthumela izicelo zomsebenzi nokufumana ingxelo zezifundo zabo. Olu hlahlo lwabiwo mali luthetha ngqo kwingxaki ezi jongene nabasebenzi kwelisebe lezeposi.

The focus of SAPO over the medium term will be on implementing the revised business operating model, corporate plan which has incorporated some of the key projects from the strategic turnaround plan. This will stabilise business operations and engagements with stakeholders to improve and strengthen the organisation's position as the national provider of postal and related services.

For SAPO to achieve and maintain the anticipated profitability, the organisation plans to focus on the following during the 2016/17 financial year:

Increasing and diversifying revenue streams.
Cost Management.
Improving operating efficiency.
Foster a modern and performance driven organisation.
Hon. Chairperson

The ANC appreciates the appropriation of the R650 million for the 2016/17 financial and this is the much needed cash injection to ensure the entity is back to sustainability and profitability. However, it has to be emphasised that additional funding will have to be raised and put into the system in order to complete the implementation of the turn-around and corporate strategy. The organisation is therefore considering other funding measures such as commercial banks for additional funding and the response has been very positive. Once the funds are secured, SAPO will be in a position to settle debts from the past which will further stabilise its operations and then focus on implementing revenue generation initiatives. This could not have been possible without the much needed government support and guarantees.

SAPO is confident that the viability of the organisation to turn-around will be in the 2017/18 financial year for the entity to return to profitability. This is a base case and it can be far exceeded. It has to be emphasised though that part of ensuring the success of the turn-around of the organisation will be doing business with some of the government departments.

Hon. Chairperson

In conclusion, it has to be noted that considerable progress has been achieved on the stabilisation of the department and SOCs, particularly at the human resources level with a clear understanding of challenges faced by the sector. I am therefore confident that 2016/17 financial year will be even a greater year.

Xa sibambisene siluluntu norhulumente singenza ngcono # sishota ngawe.

Thank you.

We should stop bailing out state owned entities: Cameron Mackenzie DA Shadow Deputy Minister of Telecommunications and Postal Services

 

House Chairperson

In this year’s budget speech Minister Pravin Gordhan warned of a ratings downgrade. It’s very bad news for the economy and the Rand – more so than the Hon Van Rooyen’s weekend stint as Finance Minister.

Minister Gordhan said “We are resolved to preserve our economy’s investment-grade status” and outlined the steps needed to do so.

To this end, careful and responsible management of wasteful and inefficient state-owned companies is critical.

The actions of some of these companies’ directors are reprehensible. Like the Nemisa Chairperson, who together with the CFO and CEO pocketed their fees for a full year and then resigned a month before their annual strategic and performance plans were due to be presented to the portfolio committee. Disgraceful!

Or the new ZADNA chairperson who tables a Strategic Plan that turns an annual surplus in at a R300,000 deficit by moving to plush offices, buying a company car and hiring 9 directors when 3 will do fine for a company with a R13 million turnover.

But all of this pales in comparison to the SA Post Office.

Artist Paul Treleven, who did the artwork for the SAPO’s philatelic stamp collection didn’t have the opportunity to attend this EPC as he’s one of the thousands of SAPO creditors who haven’t been paid for more than a year and a half.

Mr Louis Germishuys also wasn’t free to come here today as he never got the invitation sent to his PO Box because the Bloubergrant Post Office has been closed due to non-payment of rent.

I also hear the reason the stadium was so empty for the ANC’s manifesto launch was because the invitations were sent in the post!

And let me thank the Hon Speaker Mbete for her Christmas card; it was posted before Christmas and only arrived on the 4th April.

But the SAPO doesn’t just owe its creditors; it’s simply unfair that millions are also owed TO the SAPO and remain unpaid by ANC controlled entities. USASA owes R7 million and the Road Traffic Infringement Agency owes a massive R39 million.

The fact is the SAPO has no cash, loses R125 million a month, and is collapsing under the R900 million owed to creditors.

How fair is it then that the city of Johannesburg owes R26 million for more than 90 days, R5,5 million by Tshwane and R11 million by Ekurhuleni – all ANC ruled municipalities – well, at least until the 3rd of August election when the DA will change all that.

To turn the SAPO around will cost R 2,7 billion over the next two years – over and above the R650-million bailout in this year’s budget as well as the government issued guarantee for R1,8 billion.

But the interest on this is hundreds of millions of Rands each year, and as Minister Gordhan said: “We cannot spend money we do not have. We cannot borrow beyond our ability to repay.”

So instead the SAPO asks for an “equity injection” – in other words, that billions be given interest-free in exchange for more equity in a company that we already own 100% of. So we’ll get another 20% to add to the 100% we already own? Now that’s creative accounting!

While we recognise the vital role played by the SAPO in our economy and it cannot be allowed to fail, we also say NO to more bailouts. And we’re not alone.

As Minister Gordhan said: “South Africans are very clear – we should stop bailing out state owned entities”.

And South Africans are right. Because there IS an alternative to bailouts and it’s in the National Development Plan.

As Minister Gordhan says: “We need to move forward to mobilise the resources and capacity of public-private partnerships.”

New SAPO CEO Mark Barnes has some innovative ideas on how to turn the SAPO around. But he also wants to reintroduce a government subsidy and enforce the SAPO mail monopoly.

But as Minister Gordhan said: “The strength of our major state-owned companies does not lie in protecting their dominant monopoly positions, but in their capacity to partner with business investors.”

The Postbank is the only profitable part of the SAPO and while Minister Cwele is very keen to see this as a state-owned, fully-fledged commercial bank, Minister – you’ve already got one: the African Bank which government already owns through a 50% Reserve Bank stake as well as the Public Investment Corporation.

A Public-Private Partnership or part ownership scheme with African Bank, Capitec, or other interested operators will save millions in Postbank corporatisation costs, banking licence applications, and new IT systems and infrastructure.

As Minister Gordhan says: “It means being bold where there is need for structural change, innovation and doing things differently. It requires bold and constructive leadership.”

Minister, it’s time to show bold leadership. Put an end to bailouts, partner with the private sector to raise capital, support your new and competent SAPO Board and its CEO, and help them get the SA Post Office back on the road to profitability. Demonstrate to the ratings agencies, your Cabinet colleagues and foreign investors that you’re serious about playing your part to get our economy right, and will do what’s necessary to avoid that costly downgrade.

As Minister Gordhan said: “As South Africans, we need to… provide very concrete evidence over the next few months that we are not just talking…It is time for collective action, concrete action and demonstrable action.”

This country needs action now, not words, and if you can’t do that, then step aside and the DA will.

The ANC government simply cannot deliver opportunities and freedoms of a digital future: Marian Shinn DA Shadow Minister of Telecommunications and Postal Services

 

This ANC government cannot deliver to South Africa the opportunities and freedoms of a digital future.

It does not have the money, capability, honesty of purpose, nor energy to create the environment that is necessary for us all to prosper in the connected world.

Consider only a few of the flagship ICT projects in play and it is clear the targets cannot be met:

·         The SA Connect broadband policy needs R67 billion to meet its targets;

·         Operation Phakisa: ICT in Education needs R170 billion to deliver e-education to schools in seven provinces;

·         The free set-top box programme needs an extra R2 billion to produce 5 million units;

·         The dual illumination programme, that phases in digital broadcasting signals while phasing out analogue signals, has no money at all. It needs R285 million.

This is a critical step in the digital migration process. Failing to take it cripples the expansion of mobile internet which, worldwide, is the most rapidly growing ICT sector.

These budgetary failures amount to R239 billion. National Treasury has washed its hands of them, telling the relevant departments to fund them from existing allocations which, as we all know, have been severely pruned this year.

Through repeated ministerial and policy bungling, including the stupidity of the splitting of the former Department of Communications, this ANC government has violated the trust of South Africa’s innovative, energetic, resourceful and committed ICT sector. Their desire to extend their capabilities and offerings to all South Africans has, for years, been undermined by regulatory uncertainty, political ignorance and interference, and inertia.

These flatfooted ministries and their departments are a chain of potholes on South Africa’s Information Superhighway.

Pothole One: Spectrum.  The delay in releasing high-demand spectrum for the next generation of mobile broadband networks is perpetually delayed. Failure to release spectrum is evident to every mobile internet user whose connections are gridlocked as more users bumper bash to join the highway.

The industry asks for a transparent auction of spectrum that could inject between R16 billion and R25 billion into the fiscus.

The regulator, ICASA, wants an auction held soonest so it can release the spectrum by year end. The Minister wants a closed-bid process. Stop stalling Minister. Set the auction in motion.

Pothole Two:  South Africa Connect. Government’s ambitious broadband network plans to connect 90% of the population to the internet by 2020, among other targets.

Minister Cwele has admitted that it will need about R67 billion to implement –money government doesn’t have.

So he’s looking for private sector benefactors, not partners, to come with open wallets to the rescue. But they’ve been excluded from the planning. And there’s no sign they’ll be included in the rollout.

If the private sector’s role in delivering connectivity to the entire country is not properly recognised and incentivised SA Connect will continue to fail.

Raising the Universal Service Access Fund levy on network licence holders will be met with revolt by industry innovators. They’re tired of paying increasing taxes as their field of play becomes increasingly restricted by ineffective and corrupt government, inhibiting charters and perpetual policy uncertainty.

It’s time for government to payback the private sector. It’s time to engage in real, inclusive and honest conversation to create an expansionary and supportive environment. Don’t bully them for handouts Minister. You won’t get them.

Pothole Three: Rapid Deployment Guidelines.

Minister Cwele has dumped the recommended policy in the ICT Policy Review White Paper so we won’t see action for years. But the Electronic Communications Amendment Act obliges these guidelines to be operational now.

Get the policy out of the quagmire, Minister, and get it operational. And while you are at it, how about incentivising Telkom to unlock the local loop.

Pothole Four: Broadcast Digital Migration.

This is not happening. The process is further delayed by a legal challenge to the Minister of Communication’s unilateral decision to change the policy.

Then, a bizarre tender process for the production of the government subsidised set-top boxes has been subjected to a National Treasury investigation. We await Minister Muthambi’s action on its recommendations.

But meanwhile two of the winning bidders – who on paper have no experience or factories to produce these decoders – have been asked by USAASA to supply Proof of their ability to produce decoders and comply with local content obligations.  How come USAASA is asking these questions now? This was supposed to be declared before being placed on the shortlist – and if their capabilities weren’t verified by the procurement process – how could they be declared winning bidders?

The next major hurdle in the process is funding.

There is no money for dual illumination, as I mentioned earlier.

There is also no money to educate the public about why they need to move from analogue TV. There is no money for the call centre for viewer support. And there’s no money to buy the 5 million decoders government is giving to poor households.

The cost of these decoders and antennae is about R4,3 billion. National Treasury has approved only R2,39 billion.

Pothole Five: The cost to communicate.

This is a perennial issue. Let’s see if Minister Cwele’s policy new directive to ICASA to review mobile data rates gathers any speed.

One thing is clear: The ANC government’s policy obsession with control, rather than facilitation, of the ICT sector continues to marginalise underserviced and poor communities.

South Africa’s digital divide yawns ever wider under this ANC government.

Meanwhile, in the DA-governed Western Cape, an independent assessment by the universities of the Western Cape and Cape Town, and Research ICT Africa, found that internet access in the province far exceeds the national average. In the Western Cape 93,8% of the population access the internet via mobile phones compared to the national average of 70,8%.

Where it governs, the DA delivers on its promises of freedom, fairness and opportunity so all South Africans can be healthy, productive and prosperous.