Universal Service Agency: briefing

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Communications and Digital Technologies

06 September 1999
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


Documents handed out:

Universal Service Agency Information File (extract below)
Chairperson's comments on the Universal Service Agency

USA Slide Presentation
Telecommunications Act, No 103 of 1996, Sections 58 -68.slide presentation]


Questions by committee members

Ms S Vos (IFP): Are there any guidelines with regard to the tariffs charged at these telecommunication centres?

Mr F Khumalo (Acting head of USA): This question relates to affordability and sustainability. Sustainability is an important issue, and these centres must therefore generate enough money that will cover their costs. There is a possibility of providing a reduced tariff in needy areas in order to make these services accessible to the poor.

MP (ANC): Statistics can be very misleading at times. Can these statistics be verified?

Mr F Khumalo agreed, and said that statistic can be misleading, but it does however provide a basis for planning.

Mr L Green (ACDP) asked why Telkom was fined R1m for not delivering on its target?

Mr Khumalo said that Telkom has a duty to provide a report on their achievements with regard to their target to the regulator. If Telkom achieves their target they will be rewarded, and if they fail to achieve this target they will be penalised. Telkom did not achieve their target, and they were therefore fined R1m. The USA also did independent research to determine how much they were off their target.

Ms D Smuts (DP) enquired what had happened to the R20m funding received in terms of S67 (1): Annual contributions (Telecommunications Act) and how are the subsidies for needy people determined?

Mr Khumalo said that the funds are used to finance education. Field officers are used to find people who really need funding. The USA consists of 17 permanent staff members, and 3 field workers. They also operate with the assistance of other NGOs.

MP asked who employs the trainees at the telecommunications centres?

Ms M Letsoalo (Senior Manager of Projects and USF) said that the trainees have to sell their own services. This area is still being looked at, because the first graduates has been issued with certificates this past Friday.

Mr G Morkel (NNP) asked how these field workers determine the venues and operators for these telecentres?

Mr Khumalo said that the fieldworkers conduct workshops with the communities, and assist them in forming an organisation to enable them to apply for these centres.

MP (ANC) asked how these pilot projects work.

Ms Letsoalo informed the committee that the pilot projects belong to the USA, and has not yet engaged them into S21 Companies (a company not for gain).

Ms W Newhoudt-Druchen (ANC) asked how accessible these telecentres are for disabled people?

Ms Letsoalo said that USA has made provisions for needy people in their budget. The USA will provide subsidies for the centers that make provision for the disabled, by providing specialised equipment.

MP: Is training at these telecentres free of charge, if not, what is the charge?

Ms Letsoalo said that the trainees pay a nominal fee. The department of communication pays for the training of teachers, so that the teachers can provide training to the school children.

Mr K Naidoo (General Manager of Telecommunications) said that the Minister directs the USA Fund Policy, and it was set up by SATRA. Telkom provides about 50% of the funding, and the other funding is provided by the other SATRA licence holders. The Telecommunications Act provides for the lifespan of USA, to be no less than 5 years. S45 of this Act governs the price regulations.

Appendix 1:

Extract from

Universal Service Agency Information File

The ultimate aim of the Universal Service Agency is for all in South Africa to have access to communications services. In order to do this, at least three things need to happen at roughly the same time. First, a package of technologies must be developed and fine-tuned to community needs. Second, community awareness of these services must be increased; people are not aware of their rights to information, and they do not know the technology that will allow them to assert their rights. Third, sufficient private sector investment must be mobilised to ensure the widest provision of services. For each of these three, a stakeholder information system is needed to produce hard data on the social and economic impact of telecentres, without losing the qualitative experiential dimensions of the social acceptability and insertion of these facilities in the South African society.

In this project, a proven field research and communications method was adapted to serve as a telecentre stakeholder information system. Given that most telecentres that prosper will do so on the basis of their acceptability and profitability, the evidence generated by the stakeholder information system could conceivably attract early investment for telecentres; communities will be able to interact systematically on the issues that concern them most.

A total of 14,086 adults were interviewed in 12,472 households were interviewed in a panel of 102 sentinel communities (37% Eastern Cape, 32% Northern Cape, 30 % Northern Province). Most were rural communities and two out of three respondents were female. One in five (19%) of the households were from communities for which a telecentre has been approved. At present, there is only one telecentre working in each province as a "pilot". Roughly two out of every three approved telecentres are in rural areas. Finances and unemployment were the main problems declared in all three provinces. Communications are perceived as a problem in very few cases in all three provinces.

Based on the household interviews, public phones are used more frequently than private ones in all three provinces. If the percentage of households with a phone is an indicator of connectedness, the Northern Cape is most connected and the most polarised, with a higher proportion of shanties but also a higher proportion of private phones than the other provinces.

Most phones are available every day, since most of these phones are public/street phones, or privately owned by the householder or neighbour. The other phones would correspond mainly to phone-shops. In general there is a low availability of fax machines, copiers and computers. There is also a low appreciation of the utility of these devices, particularly copiers.

The central task of this baseline was to establish a series of indicators against which the impact and coverage of telecentres can be benchmarked. In addition to this, the survey identified certain factors, which will help determine the future success of telecentres:

1. Installing phones and hardware is not enough the culture of isolation must be challenged programmatically, with a new culture of communication

In all three provinces nearly one half of the respondents said they had never made a phone call, despite the high coverage with telephones. 24-hour access of phones, including street phones, was reported by 85% of the sample in the Eastern Cape, 95% in the Northern Cape and 75% in the Northern Province. The first (and considerably easier) component is provision of the hardware. The second, more challenging element involves a communication strategy, promotion and training to address the weak or absent tradition of connectivity.

People do not know how to use the various machines, but more importantly they are unaware how a specific machine can be of use to them. Perception usefulness of a photocopier, for example, was not high. Focus groups said that local demonstrations of what each machine does, and exactly how it can be useful, might change those perceptions. Funding the cultural component would probably need the same dimension of investment as the hardware.

  1. Telecentres are part of a service industry -- yet service provision is not a priority
  2. A review of 29 providers of telecommunication services in the sentinel communities (including eight phone shops and 15 post offices) revealed low service standards. One third of the managers of these centres acknowledged no knowledge of their users' needs and two thirds said they do not develop new services to meet users' needs. The findings highlighted a poor service mentality with no evaluation system and no system of adjusting to community needs. When asked how they know the needs of the users, one half of the managers said "people tell us" and 31% said they "don't know". Asked about comparisons with other places offering similar services, half the managers said that their centre is better in quality of services, training and facilities. A third answered they are cheaper. This indicates a possible sense of market which can be built on. The introduction of the concepts of service delivery can add to this.

    3. Telecentres must be linked to real needs

    In order for telecentres to work, they must be responsive to community views. No less than 48% of the adults surveyed were looking for a job. If telecentres can begin to focus on these needs, or even demonstrate the attempt to be of service in this respect, their place will be assured.

    A strong message emerging from this baseline is that telecentres should focus first on the technology the communities are most interested to use: computing. Although only seven percent of the respondents said they were currently able to use a computer, one in three felt they ought to be able to use it. Despite their shyness of these technologies, the adult focus groups also emphasised the need for computer skills. Telecentres can capitalise on this interest. Only one in six saw the need for a fax machine and only one in ten saw the need for a copier. In light of this, the introduction of computing and Internet access might prove to be more successful than "intermediate" technologies like fax and copiers.


    In many areas of the country there are asymmetries in access to telecommunications services. South Africa is the 14th largest user of the Internet in the world, with modem communication systems including cellular phones in many urban areas. In many rural areas, however, there is very poor service - many South Africans have never made a phone call. The latest reliable figures on telephone usage in South Africa comes from the 1995 October Household Survey conducted by the Central Statistical Service:

    Universal service: 32% of households have a fixed line phone or a cellular phone

    Universal access: 75% of households have access to useable phone within 5 km

    The asymmetry of access is reproduced across racial groups and provinces with Africans and Coloureds reporting the lowest levels of use: 14% and 37% respectively. Free State, Northern Province, North West the Eastern Cape and Mpumalanga have the lowest telephone usage.

    The operational goal of universal service is to provide telecommunications where everyone in the country can have access within 30 minutes' travelling. This can only be achieved with co-operation from business, government and the broader community. A major role of the USA will therefor be to co-ordinate the many efforts to extend access to telecommunications - working with community organisations, non-governmental organisations, telecommunications operators, service providers, government at national, provincial and local levels, business, universities, donor organisations and others. Improving access to telecommunications is a key factor for the Reconstruction and Development Programme - for meeting basic needs, democratising the state and boosting the economy.


    The USA will work with other organisations in establishing telecentres at schools, libraries, churches, existing community centres and civic organisations. The USA has approved 68 telecentres. Six pilot telecentres have been established in Gauteng, Kwazulu-Natal, the Free State, Northern Cape and Eastern Cape. The remaining 62 are due to be established through partnerships with small, medium and micro enterprise, international donors, civic organisations. Two managers, one of which is female, have been named per telecentre.

    For telecentres to be a long term solution, they must fit with community perceptions of need; in part this can be done by increasing community awareness. But the USA, as the agency responsible for promoting communication technologies, lacks the evidential base to play the brokering role or to direct its awareness programmes.

    This project adapts a proven field research and communications method as a stakeholder information system (SIS) for ongoing evidence-based planning of telecentres. It focuses on participatory fact-finding for assessing their impact on local economic development processes. At the same time as building national and local level evaluation skills, the scheme will produce accurate, detailed and actionable data - currently nonexistent - rapidly and at low cost.

    Beyond the hard baseline data, it promotes the increasing use of local perceptions and evidence in planning. On the basis of new information, at least three levels of stakeholders should modify their decisions on telecentres (households, service workers in communications and policy/promotive agencies). The research will seek to measure these wider social and economic impacts, without which the social and economic impact of telecentres cannot be gauged.


    The Project develops a prototype stakeholder information system capable of measuring the social and economic impact of telecentres. This should contribute to the design of telecentres currently being implemented by the USA, finetune the service mix and improve the community interface dynamics. The project should allow for lessons on the sustainability of telecentres, incorporating the community voice in the management of telecentres and related services.

    The specific objectives of the stakeholder information system are therefore:

    I. Determine the short-term impact of telecentres in three provinces (Eastern Cape, Northern Cape and Northern Province) over two years;

    2. Make evidence on impact, coverage and costs available for local and national policy, focusing on actionable factors affecting telecentre effectiveness, and their role in democratisation and good governance;

    3. Develop learning dynamics, capacity and habits at local level to improve understanding of the evidence and to propose concrete local action;

    4. Build local capacities to run community based evaluations.


    The USA mandate and interest goes beyond telephony. Universal access to wider information services is needed if the information society is to be a reality for more than a small elite. The USA works to allow access to computers and the Internet to all in South Africa. Telecentres can serve as pilot projects in providing universal access; many telecentres will provide other services such as small business support, health, education and training services. In this way, a telephone will be used by many people for many purposes - making it economically viable and meeting the needs of the community. Telecentres equipped with a computer and an Internet hookup can play a strong role in information literacy.
    The Universal Service Agency (USA) is a statutory body established by the Telecommunications Act of I996, the Act that also established the South African Telecommunications Regulatory Authority (SATRA) to regulate this sector. The mandate of the USA is to promote universal access to telecommunications for all in South Africa.

The Chairperson's Comments on the Universal Service Agency


The White Paper on Telecommunication and the Telecommunication Act 1996 adopted a principled universal service approach - the provision of basic telephony to disadvantaged communities must be balanced with the modernisation of the telecommunication network for the provision of high-level services. The Universal Service Agency (USA) was legislated to oversee the penetration of basic telephony while ensuing that other new services are also rolled-out to communities. The USA is therefore a quasi-regulator that is responsible for universal service.

South Africa has two worlds in one, while the urban residential areas could be compared with highly industrial areas in terms of telecommunication services the rural areas and other previously disadvantaged areas have a teledensity compared to the poorest countries of the world. It is estimated that the teledensity in many previously white suburbs stands at almost 90 per 100 residents while the adjacent townships it is as low as 3 per 100 residents. The rural areas are worst off with a penetration level less than 0 percent. According to a Deloitte Research it is estimated that our penetration levels will move from 10.76 to 25.37 per 100 residents. We currently have about 4 million telephone subscribers and this number must double by the year 2002.

The beneficiaries of our universal service policies must primarily be the under service areas while adding value to our telecommunication network. Basic telephony is not an end but a platform for more new services. Our country will benefit from a dynamic universal service that ensures that people are connected while business benefit from a modern and competitive network.

We must therefore assess me success or weaknesses of our universal service approach. The USA is created to be a tool of measurement of how we are implementing universal service policy. A universal service policy must be affordable, telecommunication services must be available and accessible especially to people with disability and our network must be technologically developed to provide new services and universal service must improve the quality of life of our people and assist in deepening democracy in our country.

The biggest challenge to our objective to provide telecommunication service is the funding of universal service. A cross-subsidy system is universally proven to be the most reliable form of funding although the sharing of universal service responsibilities by all providers of services is increasingly the preferred funding of universal service obligations.

The USA and other network players must brief us on how best to approach our dual task - that of providing basic telephony while modernising our network for economic growth.

USA presentation


The USA, led by Mr Fikile Khumalo, gave a slide presentation about their objectives and projects


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