Minister of Telecommunications and Postal Services Budget Speech

Minister of Telecommunications and Postal Services, Dr. Siyabonga Cwele, gave his Budget Vote Speech on the 24 May 2017.

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Honourable House Chairperson
Ministers and Deputy Ministers
Honourable Members
Invited Guests
Fellow South Africans

Introduction

It gives a great honour during this Centenary Year of Cde. O R Tambo to present Budget Vote 32 of the Department of Telecommunication and Postal Services, worth R1.6 billion. We salute this revolutionary who comes from the generation of leaders that rose above their oppressors, as illustrated by his 1989 message to the Soweto rally[1] to welcome leaders;

“This is a joyful day for all of us. It is a day of celebration for all the people of our country. Those who have chosen to turn their backs on our festivity are a small minority who continue to cling to the anti-human concept and practices of racial arrogance, white minority domination and super-exploitation of the masses of our people. Yet they, are part of our heritage. They are part of that history and continuing reality of our country which has meant the imprisonment of the best representatives of our people for a quarter of a century and more, murder of thousands…. and millions who have suffered from the daily violence inherent in the apartheid system.”  

Our key priorities for the year include measures to; expand ICT access through the broadband roll out, increase skills for internet utilisation, reduce the costs for data and devices, the corporatisation of the Postbank and the implementation of the National Integrated ICT White Paper to foster radical transformation in our sector.

We are pursuing these priorities on the backdrop of the Fourth Industrial Revolution, which is fundamentally changing the way we live, conduct business and the how we interact with government. It offers potential great benefits for those who participate in it but widens the divide to the excluded. The ANC government is embracing this revolution as a platform to propel us to be globally competitive. It calls upon us to prepare the current and future workforce through skilling and reskilling. Some of the skills you need to survive this revolution include;

• cognitive skill such as mathematical reasoning and visualisation,
• comprehension and ICT literacy,
• manual dexterity and precision,
• critical thinking and listening,
• emotional intelligence and service orientation,
• judgment and systems analysis,
• complex problem solving,
• resource and time management, and
• technical skills such as equipment maintenance, operation, and repairs

The key to these new skills is the learning of mathematics, science and coding for every school going child.

State of our broadband

Honourable House Chairperson,

In 2016, despite the tough economic environment, total investments towards ICT increased by 18.8% to R28 billion. However, the focus of the industry was on general network improvements as well as fibre deployment in major urban areas. This improved our World Economic Forum (WEF) Network Readiness Index from 75th to 65th position in 2016. This index measures the country’s propensity to exploit opportunities offered by ICTs and their impact on its competitiveness. The ITU Development Index also improved slightly but constrained by low usage and poor ICT skills.

The recent ICASA Report[2] showed 3G coverage reaching 99% and the 4G rising to 75% of the population. However, not all those who are ‘covered’ have access to or are using the internet, as only 53,4% of South African households have access to the internet[3]. The 10 districts with the least access to internet[4] are; Alfred Nzo, Amatole, UKhahlamba, Sekhukhune, O.R. Tambo, UMzinyathi, Sisonke, Dr. Ruth Mompati, Chris Hani, Pixley ka Seme and Vhembe District Municipalities. The reasons for not having access to home or mobile internet includes:

• 38% lacks skills or confidence,
• 35% Lacks relevant content or the need for use, and
• 20.9% due to high costs.

However, in the metropolitan areas, the high costs of data and equipment are the main concern.

South African Internet for All Partnership Initiative

Fellow South Africans,

We need to connect 22 million people if we are meet our SA Connect and National Development Plan target of universal access to the internet by the end of 2020. The ANC Government maintains this enormous target because we know very well that the majority of the unconnected are those marginalised by  the apartheid system, including  women as well as people living in rural areas and underserviced municipalities. This task requires our collective effort. We are pleased that at recent WEF meeting in Durban, we adopted and announced Internet for All - South Africa Partnership initiative. We forged a partnership with WEF, business, civil society and donor agencies to advance priority areas. In June we will a national launch  of Internet for All to enable more stakeholders to commit on their respective actions. The initiative will rest on four pillars;

• infrastructure expansion,
• ICT skills development,
• Affordability,
• relevant content development including making internet content in our languages.

Let me take this opportunity to thank Ms. Elsie Kanza from WEF and all the global and national partners who have joined us today and are seated at gallery.

The government will provide the secretariat for support and coordination; business provide project management and WEF supervise and guide for success.

The Internet for All global steering committee organisations have already committed to be core champions of this project. They include Telkom, MTN, Microsoft, Qualcomm, Intel Corporation, Boston Consulting Group, Digital Opportunity Trust, Cisco, DBSA, Neotel/ Liquid Telecom, African Development Bank, UK DFID and World Bank. In our preparatory meeting in Cape Town yesterday, more partners committed including Vodacom, Cell C, Google, Ericsson, Accenture, Altron, IDC, SOEs, ICT SMMEs, Research ICT Africa, Ndlovukazi online media and WEF Global Shapers. The meeting was also blessed with the presence of Inkosi Madikane II Diko of AmaBhaca ‘Tholelengwe!”

Some of the commitments to date include;

• training millions of South Africans on digital skills,
• Research assistance, 
•  Infrastructure deployment and funding, and
• Mobilisation of the participation of our youth

Phase 1 Broadband Project Implementation

Honourable Members,

Last year we committed to commence the implementation of the first phase of South Africa Connect in eight pilot districts after following the open tender process by State Information Technology Agency (SITA). Unfortunately, there was no successful bidder among those who participated, resulting in its cancellation in November 2016. We have since decided to utilise our state entities such as SITA, BBI and SENTECH in line with their mandates to implement this critical project. In the current financial year, R416 million has been set aside to connect 2700 sites.

House Chairperson,

In the last financial year, BROADBAND INFRACO (BBI) expanded its network to more than 14 900 km of fibre. It optimised 41 Points of Presence to enable third parties to access to its network. In this financial year, BBI will continue to aggregate state network services and lead in connecting sites in pilot districts. In advancing inclusive growth, BBI continues to connect Black-owned regional Internet Service Providers such as GALELA, UMZINYATHI and BRIGHTWAVE Technologies.

SENTECH is one of our best managed entity with unqualified audits. However, its going concern is currently being threatened by the broadcasters that are experiencing funding challenges and defaulting on paying for SENTECH services. We appeal to broadcasters to make efforts to resolve this debt. SENTECH received a budget of R193 million for DTT dual illumination until next year where we hope digital migration may be completed.

SITA provides the core private network of government. In addition, it has partnered with private sector and Western Cape government to roll out 1930 site in just two years. It is exploring a similar relationship with the Limpopo government. In this financial year, SITA will play a leading role in digitising and connecting sites in pilot districts.

SAPO and Postbank

Compatriots,

The corporatisation and full licensing of the Postbank is on track as part of government effort to ensure financial inclusion in the underserved market. Some of the significant milestones towards compliance target by 03 July 2017 are;

• in July last year, SAPO obtained approval to establish a bank from the regulator
• in March 2017, the first Postbank Board was appointed after a rigorous fit and proper assessment.
• In April 2017, the South African Postbank SOC Ltd company was registered and incorporated with the Companies and Intellectual Property Commission (CIPC).
• Most of IT capabilities have already been implemented
• Key appointments in internal audit, regulatory and risk management positions have been made, and
• Now, our efforts are concentrated in resolving the structure of the Bank Controlling Company as well as the resolution of the legislative conflicts around the definition of a public company by aligning the Banks Act to the Companies Act.

It is important to note that despite the challenges in SAPO, the Postbank division is well cushioned, managed and profitable, with its capital adequacy requirements in excess by R1.4 billion in the last financial year.

In April 2016, SAPO was authorised to increase its long term borrowing to R3.7 billion in the domestic markets. This enabled SAPO to settle past debt, which was crippling its operations. The rest is being spent on revenue generation measures of the Strategic Turnaround Plan. SAPO is ready to assist SASSA to take over the payment of social grants as directed by the court.

Policy implementation

Honourable Members,

In September 2016, the ANC Government approved the National Integrated ICT Policy White Paper to drive the NDP objectives of creating an inclusive information society and knowledge economy. Since then, we have been engaging the ICT industry stakeholders on how best to implement the policy. There is general agreement with the thrust of the policy and the need to implement it without delay. Most of the discussions focused on how best we implement Wireless Open Access Network (WOAN) and the allocation of and the return of the high demand Spectrum. I am pleased to announce that after the last consultation meeting on 19 May 2017 we agreed on the following approach;

• There may be no urgency to return the current high demand spectrum from licensees until the end of current licence period to ensure investment certainty
• In return, the licensees committed to buy at least 30% of the existing capacity of WOAN to ensure its viability
• Given the current levels of investment on the 4G network, the Minister committed to conduct an urgent high level study to determine if WOAN will utilise all high demand spectrum for 4G network. If there will be remaining spectrum, it will be licenced to operators with rural coverage obligations. In such case the licensees further committed to buy at least 50% of WOAN capacity.

It is important to realise that without WOAN, the new entrants particularly black entrepreneurs and SMMEs will find it impossible to enter this industry. In the next few months we intend to finalise the Implementation Plan.

Fellow South Africans,

Our work is made easy and enhanced by our councils and forums we have created. The Deputy Minister will expand on these as well as E-Skills Institute, National Cybersecurity Hub and Universal Service and Access Agency of South Africa (USAASA).

Honourable Chairperson,

We agree with the call from South Africans that “DATA PRICES MUST FALL.” According to 2017 StatSA Report[5] , the ICTs contributes 3.0% to the GDP and constituted 4.6% of household expenditure.

In 2016, I issued a policy directive to ICASA to prioritise the commencement and conclusion of an inquiry and the prescription of regulations to ensure effective competition in broadband markets.  We are still awaiting concrete interventions from ICASA. The response from the regulator suggests they will finalise this work in the next 2-3 years. The speed of intervention is critical in a rapidly evolving sector such as ICT.  The ICASA’s State of ICT Report seem to suggest lack of competition, particularly by dominant players. The report indicates that data traffic increased by 55%, data revenue increased from R30 to R38 billion, the employment decreased by 4000, yet prices remain sticky at same level.

In our view, this may need the attention of the Competition Commission. We appeal to operators start competition in services to ensure the cost data and call fall to affordable levels or below 2% of average household income.

International engagements

House Chairperson,

Our international work is advancing our national development goals in the International Telecommunication Union, Universal Postal Union, United Nations, African Union and the Internet Governance Forum.

Earlier this month, South Africa joined the Smart Africa Alliance. This is an initiative that aims to transform Africa into a single digital market, through harmonising policy, legal, regulatory and investment codes in the continent, generating more demand and establishing more favourable market conditions. Ultimately the intension is to enhance African economy, attract large scale investment, build new industries and create jobs. It supports digital government through IoT such as smart cities, agriculture, water, sanitation energy etc. South Africa will champion the skills development programme and localisation, to stimulate demand of locally produced electronics for the African market.

In Conclusion

With our modest budget and through strategic partnerships, we are on track to meet our ambitious target of ensuring that all South Africans have access to and are utilising internet for their development. We are taking bold and practical steps to move towards inclusive growth in the ICT sector and prepare our nation to reap the benefits of the Fourth Industrial Revolution, while minimising digital divide and unemployment.

Let me thank our ICT industry for continuing to invest in the South African economy. I am indebted to all those who are optimistic about our country, and are partnering with us in to connect 22 million South Africans in the next two and a half years.

I am grateful to all the workers that make our sector tick. I thank the boards of our State-Owned Companies and their managers for always striving to meet their developmental mandates.

I   thank our new Director General, Mr. Robert Nkuna and Team DTPS for improving the performance and governance.

I thank the Chairpersons of Parliamentary Committees and members of the committees for keeping us on our toes to improve delivery.

I thank my family and friends for their unflinching support.

Lastly, allow me to thank our President, Deputy President, Cabinet colleagues and the African National Congress for their guidance in ensuring we take our country forward for the benefit of all our people.

I thank you all.

ADDRESS BY MS STELLA NDABENI-ABRAHAMS, THE DEPUTY MINISTER OF TELECOMMUNICATIONS & POSTAL SERVICES: PARLIAMENT, CAPE TOWN.

Theme: 4th Industrial revolution and the continued pursuit of inclusive economic growth through ICTs: 

Investing in the youth

24 May 2017

Honourable Speaker
Minister of Telecommunications & Postal Services, Dr. Siyabonga Cwele,
Chairperson & Honourable Members of the Portfolio Committee;
The Director-General;
Chairpersons, board members and CEOs of State Owned Entities within the DTPS Portfolio;
Senior Government Officials;
Captains of the Industry;
Members of the media present this afternoon;
Ladies and gentlemen.

Molweni, Avuxeni, Thobela, Ndi matshihari, Lochani, Good Afternoon, Goeie Middag.

Context of our Budget Vote.

It is an honor for me to stand before you this afternoon to deliver my maiden Budget Vote Speech as the Deputy Minister since my re-appointment to this portfolio on the 31st March 2017.  

This is a portfolio that is very close to my heart, especially in realising the role that Information and Communication Technologies play in advancing socio-economic development. I therefore look forward to this second coming. 

With the guidance and continued support from you all, I have no doubt that we will drive the ICT agenda in the country and change the lives of our people to whom we owe this honor.

This Budget Vote coincides with 100 years since, our struggle hero, Comrade Oliver Tambo was born.  This is the man who is credited not only for keeping the ANC together during the torrid times in exile, but he co-founded the ANC Youth league in 1944, thus ensuring that the movement grows and regenerates itself. 

By establishing the ANC Youth League, Comrade O.R. understood that the future of any organization, movement, or country lies in its ability to invest in the youth. 

In this respect, this financial year will see the Department placing more focus on programmes which speak to youth development and women empowerment. 

Our ICT World.

Honourable Chairperson

South Africa’s ICT industry, like anywhere else, is going through rapid changes with the global challenges of 4th industrial revolution inevitably beaconing. 

Our response in this regard, has to be cognisant of us as a developing country with the prevailing legacies of the preceding revolutions (1, 2 and 3). 

As OR Tambo addressed the extended meeting of the National Executive Committee of the African National Congress (ANC), on 1 April 1975, he posed the three points to the meeting; that “we, have to identify our position. Do we not belong to the past? Are we properly marching with the times”? 

In responding to the points raised, we need to be mindful that whatever they are, the benefits of the 4th industrial revolution will never be meaningful to us if they do not help us to overcome the digital divide, empower our youth and women, create jobs and bolster SMMEs. 

These are the challenges and aspirations we seek to address as mapped out in the National Development Plan 2030 and the 9-point plan.  We shall not rest until they are achieved. 

It is unfortunate that we have to deliver on them in a negative economic environment, characterized by declining public funds owing to various competing needs, investment downgrades and unfavorable exchange rates. 

Our commitments last year.       

Chairperson and Honourable members, when we appeared before this august house last year, we made the following commitments:

• Finalise the merger of the National Electronic Media Institute of South Africa (NEMISA), the e-Skills Institute (eSI), and the Institute of Satellite Software Applications (ISSA) to form the Ikamva National e-Skills Institute (iNeSI) in order to coordinate and promote e-Skills in South Africa.  An amount of R126.4 million was made available over the medium term for this process. 
• Upgrade the cybersecurity website to interactive functionality which would be available by end of June 2016.
• Grow ICT SMMEs.

Chairperson, I have a good story to tell because:

The integration of the three entities has been completed.  A business case and draft Bill were developed and the Minister shared its contents with the members of the Portfolio Committee.  During this financial year we intend to table the iNeSI Bill to Cabinet to complete this process.

Through the work done by the National Cybersecurity Advisory Council and Cybersecurity Hub we have completed an Annual Report with various recommendations for the consideration of the Department.

Some of the recommendations focus on the promotion of cybersecurity research, development and innovation, and strengthening public-private partnerships based on complementary roles, common objectives and shared responsibilities.

An initial upgrade to the Cybersecurity Hub’s website was concluded in the last financial year, which included the ability for the public to report incidents and the provision of Awareness information. 

The Cybercrimes and Cybersecurity Bill currently before Parliament will place obligations on both private and public sector organisations.

Continuing from the previous Financial Year, our focus this year will continue to be on those programmes and activities that:

• Adequately skill the SA Youth for the 4th industrial revolution;
• Strengthen our cyber resilience to withstand attacks and crisis;
• Bolster ICT SMMEs for economic inclusivity;
• Transforming the Universal Service Fund into the Digital Fund; and
• Strengthening of Digital economy

Adequately skilling the SA Youth for the 4th industrial revolution:  Accelerate transformation of the sector for economic inclusivity and women empowerment.

Chairperson!

As I reflect on this role of ICTs, I am reminded that in the past few weeks, South Africa was shaken by the spate of gruesome attacks that engulfed our communities; where young women were raped, violently attacked and even murdered.

These atrocious attacks coincided with my reciprocal visit to China. During this visit we engaged on some of the interventions that government, utilising ICTs, should embark upon to build safer communities.

In this financial year, we will therefore rollout the following projects:

• Host an ICT EXPO to educate our communities on effectively utilising ICTs to protect themselves against violence and abuse; and
• Roadshows to empower women to protect themselves against abuse.

Chairperson,

To intensify and accelerate the e-skills programmes for the youth, NEMISA, (transforming to iNeSI) will coordinate all the activities of the various entities within our portfolio to ensure comprehensive e-skilling.  

We hope this coordination will include the private sector in the long term.  This is crucial to measure the impact and monitor progress for e-skills investment in the country, thus avoiding resource duplication. 

The entity will further host the national e-Skills Summit this year. An amount of R49 million has been set aside for the e-skills programme and activities targeting the youth, women, SMMEs, people with disabilities in the eight (8) priority broadband districts and National Health Insurance (NHI) sites.

The e-skills training interventions will be scaled up across the country. The interventions planned for this year include the following:

• e-Skills4All and Cybersecurity  awareness;  
• eSkills4teachers;  
• Tech for Girls; 
• Mobile Tech for SMMEs;  
• Object Orientated Programming: Introduction and Advanced Course in Android Mobile App Development: This is the Train-the-trainer model, targeting the ICT Sector; and
• Social media and Film and TV production: Targeting the mobile broadcasting sector with a focus on “Online Video Editing”. 

Further, in collaboration with local universities and the industry, Post Graduate courses such as Diploma in Software Development; Diploma in Business Analytics and Business Intelligence have been developed.   This year will see the first intake of learners in these programmes. 

In all these programmes, with the available resources, this year alone we are targeting five thousand and forty (5 040) learners

Chairperson,

During the commemoration of the International Girls in ICT Day, we launched the ICT innovation challenge. During this financial year, 50 girl-learners from the Eastern Cape will be trained on developing ICT innovations and upon completion, participate in a challenge to build their own innovation which will benefit their communities.

Through .zadna, female-led SMMEs will also be trained on website development and domain-name registrations.

Chairperson,

During the recent WEF Africa 2017, which took place in Durban, the Department announced South Africa’s adoption of the Internet for All which aims to bring millions of South Africans, especially those in rural areas, onto the internet for the first time through new models of public-private partnership and will focus on addressing the barriers that prevent universal internet access.

In order to achieve this, the department has forged partnerships with multinationals as follows:

• Google to train 1.1. million South Africans on digital skills. 80 000 have been trained thus far.
• IBM to train on digital skills 5 million young South Africans over a 5-year period as part of the 25 million across Africa;
• Microsoft providing training to 1 million people from Gauteng as well as building Africa’s 1st digital hub;
• Cisco connecting 50 schools with smart technology called “Spark Board”;
• Ericson deploying digital labs for schools in Mpumalanga, KZN and Northern Cape; and
• Funding from UK Department for International Development (DFID) estimated at 15 million pounds. 

Bolster ICT SMMEs for economic inclusivity.

As we strive to attain the radical economic transformation, SMMEs are the bedrock of any economy in the developing country. 

Consistent with the 9-point plan, the department has since 2014, been in the process to aggregate SMMEs in the ICT sector.

In this regard we have identified opportunities for the development of SMMEs and support interventions which we will be rolling out.

Additional to this, we have noted the various SMME initiatives managed by our entities which is aggregated to R20 million for this Financial Year.    Through the SOC CSI Forum which is coordinated through my office, we will consolidate interventions and report on these initiatives.

Strengthen our cyber resilience to withstand attacks and crisis. Increasing cyber-security awareness.

Compatriots

Last week’s cyber-attacks demonstrated the degree to which we are all vulnerable to cyber-attacks, especially citizen/customer and government data.  Therefore, there is a need to access and grow the limited cybersecurity skills base and awareness in our country.

For 2017, we envisage to obtain full international certification of the Hub.  Progress has been made on upgrades to the Cybersecurity Hub’s policies, processes, infrastructure, and back-end systems, as this is a requirement in order to obtain this full international certification. 

A national awareness strategy via the Hub’s website has been approved and is in the process of being developed. 

To support this initiative we are going to host the Hackathon in October 2017 which is a youth oriented initiative to develop various Cybersecurity related apps and awareness.  

Further, we are rolling out a Business Intelligence / Data Analytics pilot project whose main objective is to consolidate threats and incident information in order to analyse trends of incidents facing the country.

A survey to ascertain the state of Cybersecurity organisational readiness is currently underway, and the results will provide the first baseline understanding of Cybersecurity readiness across various sectors. This will assist in developing strategic interventions aimed at increasing the overall threat posture of the country.   

Transforming the Universal Service Fund into the Digital Development Fund.

Chairperson

The Integrated ICT White Paper has proposed for the dissolution of the Universal and Access Fund and transform it into the Digital Fund. In effect, this will remove USAASA’s policy making and regulatory functions and instead focus on funding and access delivery to the nation.

We sincerely hope, that upon its establishment, the Digital Development Fund, will further help in the transformation of the sector as it will also fund SMMEs across the entire value chain of the sector.     

Strengthening Digital Economy.

Chairperson

We will continue to ensure that rural communities in the under-serviced local municipalities have access to basic ICT services.  Specifically USAASA will ensure access and provision of the following:

• Internet connectivity to public schools, tribal offices, primary health facilities and for the general community use within the municipalities;
• Availing broadband within local cafes, libraries and local businesses to activate local economic activities.

Following the commencement of broadband roll-out in 2016/17, USAASA plans to complete the entire OR Tambo District Municipality this financial year.  The outstanding local municipalities are Nyandeni, Ngquza Hill and Port St Johns. Also targeted this financial year in KwaZulu Natal are Impendle Local Municipality and Umgungundlovu District Municipality.  An amount of R29 869, 000 has been set aside for this particular purpose.

In terms of women development, we will engage with various stakeholders to train women-led start-ups from the OR Tambo District, on how to utilise the free Wi-Fi which has been rolled out in the district, to create economic spin-offs and work opportunities.

Support for Integrated ICT Policy White Paper.

Chairperson,

In conclusion let me highlight that in support of the White Paper we have drafted three strategies for public comment before finalization by Cabinet.  These are:

• The e-Strategy or Digital Strategy for South Africa;
• The e-Government Strategy; and
• The ICT SMME Support Strategy.
• Our work in this regard has been made easy by the councils and forums we have created, namely;
• The B-BBEE ICT Sector Council: One of the core tasks of this Council is to report on the progress of transformation in the ICT Sector. This financial year we intend to strengthen the support for the council to have more capacity to conduct research.
• The National ICT Forum: This is a platform involving leaders from government, industry, trade unions and civil society to engage on implementation of ICT policies and sectoral plans. The forum will continue to engage stakeholders on the implementation of the Integrated ICT White Paper.
• The National Broadband Advisory Council: We intend to revive this Council to assist with the implementation of Internet for All initiative and to focus more on 4th Industrial Revolution.
• The National Cybersecurity Advisory Council will continue to implement cybersecurity structures, research and development.  

Looking ahead – Moving South Africa forward through a vibrant and diverse ICT Sector.

Honorable members!

I call upon all young people to empower themselves with ICT skills, irrespective of their field of study.  Let us all develop a healthy relationship with ICTs and social media in order to empower ourselves and to network for developmental opportunities.

The 4th Industrial Revolution requires that each one must be ICT literate.

Before I sit down Chairperson, allow me to quote Moses Kotane who said

“Proper education is a mirror in which man sees the world around him and learns to understand it – the right kind of education enables man to see what the world has been, what it is, and how it can be changed to suit him or his way of living.

“We must learn Geography to know the universe, that there are other countries besides our own and to know the people of different nationalities inhabiting these countries

“We must learn History to know and understand the story of man’s development through the ages – the various forms of social organization and the causes of the rise and fall of those forms of human relationships.

“We must learn Science…..” and in this I add ICTs.

Enkosi, Ke a leboga, Baie Dankie.

End.