Universal Services and Access Agency of South Africa & USAF on their 2016 Annual Performance Plans

Meeting report

The Chairperson noted apologies from the Minister of Communications, and the Deputy Minister of Telecommunications and Postal Services.

Universal Service Access Agency (USAASA) and Universal Service Access Fund: 2017 Annual Performance Plans briefing
Mr Mawethu Cawe, Acting Chairperson, USAASA, said that the presentation would be brief because it was expected that Members have already gone through it. USAASA aims to provide and promote the rollout of adequate information and communication technology infrastructure to enable universal access to under-serviced areas in South Africa. The organisation has evolved over the years to come up to speed with developments in the ICTS sector. Its plans were aligned with the National Development Plan, and the strategic goals of the Department of Telecommunications and Postal Services. He said that this meeting was important because there should be MOUs signed with the provinces to ensure effective rollout of ICTS services throughout the country.

Ms Vuyo Ntshoko, Executive Manager: Performance, USAASA, outlined the mission and vision of the organisation. In the 2016/17 financial year, USAASA aimed to implement an organisational work skills plan, review and implement functional HR policies and develop and implement a HR service level agreement. It also aims to ensure sound that legal services are provided to the Agency. It will implement a stakeholder engagement and integrated communications policy, and ensure compliance with the Public Finance Management Act and National Treasury Regulations.

The USAASA budget allocation (see attached slide for full details) set out the administrative expenses which include employee costs, operational expenditure and capital expenditure. The 2015/16 budget was significantly higher than previous years because of an additional allocation of R196 million for the Broadcasting Digital Migration project and distribution costs. The CAPEX amounts included in goods and services now relate to IT equipment, furniture and fittings.

The organisation’s risks had been identified as including the following:
- inadequacy of the skills-set to deliver on its targets
- lack of institutionalisation of the ERP system,
- inability to recover should a disaster occur
- lack of clarity on the role of USAASA in the implementation of South Africa Connect
- negative stakeholder perceptions
- an inability to continue operating in the foreseeable future, due to declarations made in the ICT Review recommendations document.

Ms Ntshoko then presented the 2016 Annual Plans of the Universal Service and Access Fund (USAF) . She said that a total of 195 out of the 226 underserviced local municipalities were identified across seven priority provinces. The rollout of projects included broadband projects initiated and completed in the local municipality areas of OR Tambo District in the Eastern Cape and maintenance of broadband network connectivity in 127 schools, 93 clinics and 38 ICT centres, in compliance with Section 88 of the Electronic Communications Act.

USAASA had deployed a total of 38 community health clinics in the 2015/16 financial year, with 17 being in Mutale Local Municipality in Limpopo Province, and 21 in Albert Luthuli Municipality. The devices provided in these clinics included notebooks, tablets and printers. The USAF projects had specific targets for the most social impact, which would include the improvement of quality education through introduction of broadband connectivity and internet services to educational institutions.

The aims of USAF in the 2016/17 financial year included funding 58 460 Set-Top Boxes and related accessories, to be procured and installed for qualifying and needy TV-owning households.

The risks identified included an inability to deliver on the USAF mandate due to inadequate relevant technical skills pool, inadequate funding to facilitate the rollout of integrated broadband infrastructure, negative stakeholder perceptions and an inability to ensure affordable connectivity services.

The ICT Policy Review Panel submitted recommendations to the Minister of Telecommunications and Postal Services that will have a direct impact on the Agency and its projects. The budget provided continued to limit the Agency’s ability to accelerate the rollout of broadband and ICT connectivity in underserviced areas. Provincial departments' inability to take over connectivity costs impacts on the number of new educational institutions and healthcare facilities receiving connection.

Discussion
Mr O Sefako (ANC, North West) asked a question about slide number 6, and whether there is a target number used to measure the number of needy individuals and the set-top boxes to be provided  per province. There is an area that stretches from Zeerust to the Botswana border in the North West province, and he wondered how here, the connectivity was regulated to ensure that people on the other side of the border were not enjoying the benefits unduly?

Ms N Mokgosi (EFF, Northern Cape) asked about slide 13 which speaks about John Morolong Municipality and the USAF project that was done there in the 2014/15 year. She particularly wanted to know what criteria are used to award tenders?

Mr D Julius (DA, Gauteng) commented that a lot of presentations are needed so that development in this area can be ensured. He asked what were the plans within the provinces to close the ICT gaps in the rural areas? Where is the information gathered from, and what measures are used to gather sources and information? Does the Agency do its own surveys or does it source information from sources such as Statistics SA?

He commented that the service providers that are currently paying 0,2% of the levy should be increased to 1%. He wanted to know how far National Treasury was assisting in this regard. He asked what was the difference between the USAF and the amounts needed to close the ICT gap in South Africa. There was a mention of collaboration between provinces, and he wondered what the USAASA had done to facilitate the collaboration? He asked whether Telkom is the preferred service provider in the rollout of broadband in South Africa.

The Chairperson requested to know more about the issue of TV licenses and the rollout of Set-Top Boxes, and the limitations of implementation. How is the International Islamic University ranking going to affect the Agency, and what plans are in place to improve that ranking? She too enquired how the “needy households” were to be identified.

The Acting Chairperson of USAASA noted that he had joined the organisation in September last year, and it should be noted that he was not part of the board that implemented the projects. There would be written responses provided to the Committee in the event that answers could not be given immediately.

Mr Cawe said that the  issuing of TV licenses and the planning of implementation of projects is dealt with by the SABC, and there had been different boards and leadership dealing with the matter. The ranking issue does not affect the organisation because the model developed is being used by other countries. There are indeed funding issues, and the funding that was approved did not take into consideration the installation costs.

The borderline areas are a priority and the projects will be implemented by the end of June. The question asked by Ms Mokgosi was  important issue because it meant that awareness campaigns were not adequately conducted, which was why people are not aware of the projects that were done. The Member may go and conduct oversight as well.

Ms Makhotso Moiloa, Acting Chief Executive Officer, USAASA, said that the payment of TV licenses is a legal matter and as such the Agency does not have any control over this matter. There is a research document that looked into the regulatory frameworks of the ICT sector in the country, and this had been applied in other countries also, including Columbia and Japan. The research had shown that there was a lot of money that had gone into infrastructure in the urban and peri-urban areas, which meant that the large majority of the country had not been serviced.

She pointed out that the sector was not being honest because it spoke about full-on connection and full-on accessibility, which actually was not the case. Some areas are “dead “ in terms of connectivity and people do not have access. She pointed out that the mention of 195 municipalities meant that over 80% of the country was not connected. The existence of a network does not mean that people do have access. The Agency is looking at areas where there has not been any infrastructure and ICT connectivity and access.

The Electronic Communications Act requires the Agency to have a fund manual that will paint the picture of what the target areas are, how much it is going to cost, who can apply for the funding and who has access to the Fund.

She answered the question about what was done in the John Morolong Municipality by saying that here, there was a need to award a tender to set up a new network. The project resulted in an incentive, with the result that what that was meant to benefit two areas ended up benefitting seven areas.

The provincial departments provide the Agency with information about the areas that are in need of connectivity. The Agency uses this information and the political and social dynamics determine the area and extent to which the rollout will take place. Telkom is not the preferred service provider because the rules around awarding of tenders declare that a bidding must take place and applications must be made. Telkom has so far not applied for any tenders at USAASA.

She noted that it had been found that there had been some collusion, because big service providers required more money to share their space than it would cost for the relatively new to the field operator to erect his own tower. This  showed that something untoward was taking place there.

The Chairperson thanked the delegates for the presentation.

The meeting was adjourned.