Communications Budget

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Communications and Digital Technologies

29 February 2000
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Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
29 February 2000
BUDGET BRIEFING

SUMMARY
 

The Department of Communications presented their budget to the Committee. Both the South African Telecommunications Regulating Authority and the Independent Broadcasting Authority complained that their budget allocation was too little to enable the organisations to fulfill their mandates. However the Department was not convinced as its view is that the budget is a fair one and RDP issues must take precedence. The Committee directed the Universal Service Agency to submit a list of what it is doing in terms of its legislation. The Committee expressed its disappointment at the absence of the South African Broadcasting Corporation although invited to attend. The budget allocation of Telkom was not discussed. Both the Committee and the Department congratulated SAPOS for being on budget.

MINUTES
The Director General, Mr Andile Ncgaba, presented the Department of Communications budget (see Appendix 1).

Discussion
SATRA and the IBA
Ms D Smuts (DP) asked the Chairpersons of SATRA, Mr M Maepa, and the IBA, Mr M Langa, to express their views on the budget allocation for their organisations. She said she felt the budget allocation to be too small for these bodies to fulfil their mandates. An ANC committee member concurred saying that when interviews were held to fill SATRA councillor positions, competent people could not be secured because the salaries were too low.

Mr Maepa agreed that the budget is totally inadequate for SATRA. He said in 1998 SATRA had requested a budget of R112 m and received only R68 m. Now SATRA had asked for R103 m but had received only R 64,5 m resulting in a shortfall of R39 m. SATRA now has to operate with even less money. He complained that the is far lower than what SATRA expected to receive. The organisation has as its top officials people who are functioning in an acting capacity. Officials quit because there is no money. In its strategic plan SATRA has activities that it will not be able to carry out because the R 64,5 m is not enough. Mr Maepa said plainly that SATRA did not like this budget.

Mr M Langa said that what has been articulated by SATRA is a syndrome that also applies to the IBA. He said insufficient budgets create a situation where what has to be done is not done according to the timetable because the staff has been reduced. Their three-year plan is increasingly looking like a ten-year plan. IBA has a problem with attracting the right kind of personnel because it pays meagre salaries. He called for a re-look at the budget for the whole broadcasting industry as a way to restore stability in the industry must be found.

Mr N Kekana (Chairperson, ANC) asked the Chairperson of SATRA if there have been instances where SATRA has run short of money because they have over-committed themselves.

Mr Maepa replied that they try not to use money that would put them in a disadvantageous position. He said SATRA limits itself within its budgetary constraints.

Ms D Smuts argued that the budgets of SATRA and IBA cannot be accepted. She called for the Minister to be persuaded to redistribute the budgets from less important programmes to SATRA and the IBA.

Mr Maepa promised to provide the Committee with SATRA's strategic plan for the next three years in terms of the Telecommunications Act. He read out to the Committee a number of projects that are essential but which will not be done because of the limited budget. These include the installation of radio monitors, linking of the SATRA database to the regional offices, licencing of alarm projects, upgrading of the network and the auditing of Telkom's services amongst others.

Mr Langa said that they are not convinced by the observation that a SATRA / IBA merger can be cost effective. He suggested an enquiry be undertaken which will show how this is possible.

Universal Service Agency
Mr Yako of the USA said they have accepted the budget of R9, 6 m as an operational budget. The R9, 6 m will assist in the further deployment of telecentres. He complained that the head of the USA has not been appointed as the absence of a director causes a number of problems. Mr Yako called upon the Department to appoint a leader immediately.

Ms D Smuts (DP) read the relevant section in the Telecommunications Act that states the functions of the USA. She complained about its concentration on tele-centres only. She expressed the view that a budget of R9, 6 m is too much for the USA. She called for its budget to be cut so that the money can be given to SATRA and IBA.

The Director General, Mr Ncgaba, replied to the complaint about the lack of a leader at USA by stating that Mr F Kumalo is presently acting head. A permanent head will be appointed in the next month or so. He said that the USA must be seen in the context that for a long time there were no telephones in the rural areas. Tele-centres are being deployed worldwide for people who cannot afford to have telephones, fax facilities and internet access. The USA is playing an instrumental role in bringing those services to communities. The Director General said that if one looks at the damage caused by the floods in the Northern Province, USA will be highly influential in restoring the damaged facilities to such an extent that it may need more money.

Mr N Kekana called for the USA to submit to the Committee a written account of what they are doing in terms of the law.

The Director General challenged members when visiting provinces to make an effort to visit some the tele-centres and see the great job that is being done by USA.

Telkom
The Chairperson proposed that there should be no discussion on Telkom and the Committee agreed to this.

SABC
The Chairperson noted that although they have been invited, the SABC was not at the meeting. An ANC committee member complained that in his village in the Northern Province, the community is not able to view all the TV channels even though they pay their TV licences.

The Director General said that the requisite infrastructure will be rolled out by Sentech and rural areas will be able to view all channels. He promised to inform the committee member soon exactly when his village will be able to view the channels.

Ms D Smuts (DP) complained that so much of the budget is made available for the stations of the old TBVC states. The Director General gave examples of where the TBVC stations had entered into long leases such as twelve years for the buildings they use. He said it is difficult to extricate itself from such circumstances and the Department is trying to negotiate itself out of these leases. He went on to say it was established that it will take about five years for the TBVC stations to be fully incorporated into SABC.

Ms D Smuts (DP) voiced her concerns about the amount Channel Africa is costing the country. The Director General promised that the situation will be turned around and Channel Africa will soon be self-sustainable.

SAPOS
The Committee thanked SAPOS for being on budget. The Director General congratulated SAPOS for being self-sustaining.

Y2K
No discussions took place on the subject.

General
The DG said he respects the view that regulators need more money but said he is of the view that things should be looked at in a broader context. In his opinion the budget is fair and that it needs to be accepted so that money can be released to go to social welfare, housing and other deserving areas. An ANC committee member concurred and said that the budget as it stands is a reality. He criticised SATRA for not being innovative

Mr Maepa countered that SATRA has been innovative. He mentioned the example of their engaging the services of collecting agencies as they do not have sufficient staff. He said they invest some money which helps a great deal.

The meeting was adjourned.

Appendix 1
Presentation to the Portfolio Committee on Communications
By the Director-General

Department of Communications:

· · Postal Sector
· Broadcasting Sector

Responsibilities:
Legislation & Policy Research & Development
· · Shareholder Management
· Postal Regulation

Objectives
Implementation of a national strategy to ensure rollout of services
· · Development and implementation of policies for the sector
· Establishment of a regulatory regime
· Information backbone for the country
· African strategy for communications
· Increasing human resources capability of the Department and the industry

Comparison of Budget

 

99/2000

R'000

2000/01

R'000

Increase/

(decrease)

Administration

52 562

58 262

10. 84

Telkom Policy

124 263

164 531

32. 41

Postal Services

314 656

21 274

(93.24)

Broadcasting Policy

287 208

216 949

(24. 46)

Auxiliary Services

 

5 932

 

Total

778 689

466 948

(40. 03)

 

 

 

 

Decrease

 

(311 741)

 


 

- Regulatory Authority (SATRA)
 

Department of Communications
 

DOC WILLS
· · South African Telecommunications · Independent Broadcasting Authority (IBA)
· Universal Service Agency (USA)
· South African Broadcasting Corporation (SABC) - Public Broadcaster, Integration of TBVC States and Channel Africa
· Year 2000 Decision Support Centre - Y2K
· National Electronic Media Institute of South Africa (NEMISA)
· FUNDS - Not funded out of NRF
- Universal Service Fund (R21, 2 million included under Programme 2: Telecom Policy)
· · 10 DOC WILLS nationally - tertiary institutions
· 30 to be rolled out - schools
· ISA - 1999 total students: 74 of which 46% women
· 2000 - total students: 94 of which 62% women

SATRA
Budget 99/2000 - R64, 5m
· · Budget 2000/01 - R64, 5m
· Income Generated 98/99:
- Licence Fees - R434, 5m
· Licences issued thus far
· First Public switched telecommunications network (PSTN) licence
· 18 Private Telecommunications Network (PTN) licences
· 88 Value added Network (Vans) licences

IBA
Budget 99/2000 - R35, 0 m
R28, 4m - Operational Budget
R5, 2m - Restructuring/Merger
R1, 4m - Elections

· · Budget 2000/01 R29, 8m
(operational)

USA
Budget for 99/2000 - R8, 0m
· · Budget for 2000/01 - R9, 6m

- Telecentres rolled out thus far: 62 nationally focus
- rural and peri-urban
- beneficiaries: schools, community centres, containers
- 90 elecentres to be rolled out this year of which 30 specifically target disabled people

Telkom
Dividends for 98/99 - R331 m
Lines in underserviced areas:
97/98
261 788

98/99
319 652

Apr/Jan. 2000
233 102

Total 823 563

Village (first time installation)
97/98
461

98/99
920

Apr/Jan 2000
361
Total 1 742 villages

SABC
Budget 99/2000:
Public Broadcaster - R140 m
TBVC - R60, 7m
Channel Africa - R27, 8 m

· · Budget 2000/01:
Public Broadcaster - R 37m
TBVC - R74, 5 m
Channel Africa - R28, 2m

· SABC Dividends for 98/99 :
R27, 4m

· Radio Listenership (daily) increased from 13,874 in 1998 to 14,122 million in 1999

· Television licences:
97/98: R268 million
98/99: R277 million

· Local content 61,71% average achieved during first quarter
· Sentech Turnover for 97/98:
R291 m
No dividends for 97/98

SAPOS
Budget 99/2000 - R238, 2m
· · Budget 2000/01 - R 0
· To move from subsidy to specific projects
· Rolling out of postal addresses to rural areas
· Building up of infra-structure
· Turnover for 98/99 - R2 792,3 m
· Roll-out of post boxes and street addresses:
Total 684 163 (18,3% urban, 81,7% rural)

Y2K
Budget 99/2000 - R7, 8 m
· · Budget 2000/01 - R4, 8 m
· Effect of Year 2000 on IT products and existing computer applications
· Have to complete final report

Development in Legislation during 2000/01
Postbank Act
· · Upgrade legislation on emergency communications
· Legislation on E-Commerce
· Legislation on convergence
· Legislation on Internet Broadcasting
· Minor amendments to Broadcasting Act, Postal Services Act and Telecommunications Act

Development in New Services/Projects
Telecommunications
Development of e-commerce policy and legislation
· · Development of a national strategy for establishment of emergency telephone services
· Micro satellite programme
· Initial Public shares offering for Telkom
· Introduction of second national fixed line operator
· Universal service delivery
· Feasibility study on domestic satellite
· Development of spectrum pricing policy

Postal
Acceleration of roll out of Post Office infrastructure in rural and previously neglected urban areas
· · Postbank corporatisation
· Multi-purpose Community Centres (MPCCs).
· Roll out of MPCC s will commence shortly and the process of identifying location for these poverty-alleviating projects has been completed.
· Public Information Terminals (PIT). PIT kiosks will enable rural and urban communities to access government information and forms, internet, tele-health, tele-education, etc.

Broadcasting
Corporatisation and Restructuring of the SABC
· · Support programme production for children, women and the disabled
· Foreign ownership and control of private broadcasting services
· Broadcasting and the Internet
· Establishment of a Sector Education Training Authority for the Communications sector
· Economic benchmarking
· Convergence of telecommunications, broadcasting and IT
· Restructuring of Channel Africa
· Partnerships
· Dedicated Educational Channel
· Digital Advisory Council
· Local Production with the DACST, industry and Broadcast Production Advisory Body
· Continental Service with the SABC and Multichoice for delivery of African news
Support to community broadcasting sector
· · Support for children's programming
· Restructuring/SEP for Sentech
· Restructuring of BOP Broadcasting Corporation

 

Decrease is mainly attributed to decrease in SABC subsidy and termination of Post Office subsidy

Budget Composition
Department of Communications
Telecommunications Sector
 

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