Transforming ICT landscape in South Africa: Department briefing; with Deputy Minister

NCOP Public Enterprises and Communication

03 February 2021
Chairperson: Mr T Matibe (ANC, Limpopo)
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Meeting Summary

Video: Select Committee on Public Enterprises and Communication 03 Feb 2021

National Integrated ICT Policy White Paper

The Committee convened on a virtual platform to be briefed by the Department of Communications and Digital Technologies on the national integrated ICT policy White Paper: aims and objectives in changing and transforming the ICT landscape in SA. The Paper outlines the overarching framework for transforming SA into an inclusive and innovative digital society. It sets out interventions to ensure all the people in South Africa, regardless of who they are, where they live or their socio-economic standing can improve the quality of their lives through accessing the benefits of participating in the digital society. These interventions include:

-Interventions to promote universal service and access

-Framework for building a digital society

-New policy approaches to address supply side issues and infrastructure roll-out

-New approaches on scarce resources such as spectrum

-New approach for the postal services sector

-Frameworks to increase ICT industry growth and transformation of the sector

-The institutional frameworks to facilitate the realisation of the new policy approaches

Members asked how the Department, through the ICT White Paper, would ensure that the auction or selling of the spectrum did not further benefit the dominant industry players to the disadvantage of small players, if anything had been done yet to ensure that licensed operators fulfilled their license obligations instead of opting to pay fines, how would SMMEs benefit from the master plan, the unbundling of the Post Bank away from post office

Members said it was indeed important that every household needed to be connected and that the digital divide be reduced – the Department was asked how the digital fund would be financed, when it would finalise the digital economic master plan and high data costs. There was concern that rural areas were especially behind in terms of connectivity and Covid19 had made it clear SA was still lagging behind. Members berated the Post Bank and the queues of people that gathered everyday without being served.

The Department was probed on the Digital Development Challenge Fund, and exactly what it was all about, how it ensured SA citizens’ data was safe, rumours that Covid19 was linked to 5G, plans to ensure cyber security and outsourcing spectrum.

The Committee said the Department must prioritise connectivity in rural areas and avoid perpetuating the digital divide, and the DCDT needed to prioritise post office queues, which had become Covid-19 super spreaders


Meeting report

The Chairperson advised Members that one of the Committee’s secretaries was hospitalised due to Covid19, and asked them to keep her in their prayers, and wished her a speedy recovery. The Committee observed a moment of silence for all Covid-19 victims.

He said the Minister had rendered her apology, as she had a meeting with the President. Ms Pinky Kekana, the Deputy Minister of Communications and Digital Technologies, was therefore leading the delegation that was to present to the Committee.

Mr A Cloete (FF+, Free State) raised concern over the absence of the Minister, and argued that the Committee was working with a White Paper which was a very important policy document, and the Minister should have made an effort to attend the meeting.

Deputy Minister’s opening remarks

Deputy Minister Kekana also conveyed condolences to all families who had lost their loved ones due to Covid19. She hoped the coming of the vaccine would be a timely intervention to stop the carnage that the virus had caused. She said Ms Nonkqubela Jordan-Dyani, the Acting Director General (ADG), would present with her team on the integrated information communication technology (ICT) policy framework. The framework was important, as it would assist the country on connectivity, providing all the ICT elements that were required for the country’s citizenry to rise to the occasion and be able to respond to what Covid-19 had exposed them to. The policy sought to ensure no home, society, school, etc was left behind in terms of connectivity, since the world had changed. Of concern was the increasing digital divide and the post office queues that had become “super spreaders.”

National Integrated ICT Policy White Paper

Ms Jordan-Dyani said the ICT framework sought to ensure universal service and access to all ICT networks, platforms, content and services so that all South Africans, regardless of who they were, where they lived, or their social or economic status, benefited from the opportunities offered by the ICT sector to improve their quality of life. In a digital society, universal access to communications services was not just a tool to address inequality across society, but also a precondition for equality.

The challenges faced were that the digital divide persisted -- there was unequal access to ICT services, especially access to the Internet. The framework and definitions for universal service and access were not extended to cover access to high quality broadband. There was duplication and a lack of alignment in the institutional framework and roles, and an over-emphasis on subsidising the network extension.

The Minister was responsible for policy formulation on universal service and access. Policy interventions included the regulatory functions of the Universal Service and Access Agency of South Africa (USAASA) being transferred to the new sector regulator; the evolution of the universal service obligation to incorporate broadband connectivity; the framework on consumer protection to be set and regularly reviewed; and the dissolution of USAASA and transformation of the Universal Service and Access Fund (USAF) into a stand-alone funding agency to support universal service and access -- the Digital Development Fund.

 A new fund – the Digital Development Challenge Fund (DDCF) – would be established to significantly contribute to closing the digital divide, and an Electronic Communications Amendment Bill was currently being developed for this purpose. The proposed amendments include improvements regarding the current universal service and access framework. The terms “universal access” and “universal service” would be substituted with “universal digital services.” Specific provision had been made to ensure that the policy on universal digital services was updated at least every two years in order to promote a digital economy and digital society.

Digitisation, convergence and changing technologies had affected the market structure, with more vertically integrated companies. Market definitions were changing as services that were previously distinct became increasingly substitutable. There was vertical and horizontal integration between content and telecommunications providers. The key objectives were to encourage fair and sustainable competition to ensure all users had access to their choice of affordable services, to promote certainty about the competition regulatory framework, and to ensure responsible and effective ex ante regulation based on regular informed reviews by the regulator.

Policy interventions would include market reviews, with the regulator prescribing lists of markets and market segments, conducting market reviews and publishing sector performance reports. The capacity of the regulator would be strengthened by ensuring that there was a memorandum of cooperation between the regulator and the competition authorities. Improved and increased cooperation between the regulators would avoid forum shopping and potential delays in the finalisation of mergers and acquisitions.

Ms Jordan-Dyanti said the Department was currently drafting an Electronic Communications Amendment Bill to provide for key amendments recommended by the Competition Commission in its Data Services Market Enquiry report. A key focus area of the amendments was to improve competition. One of the recommendations involved amendment of the market review process, since there was a need for an environment where the Independent Communications Authority of South Africa (ICASA) was afforded more regulatory flexibility in order to keep a pace with market developments and prevent anti-competitive outcomes for the sector. ICASA should also be provided with the means to regulate, based on the findings and recommendations of other regulatory or enforcement agencies such as the Competition Commission. More effective means of inter-regulator collaboration could efficiently serve to strengthen regulatory oversight, enforcement and regulation.

The Department, ICASA and the Competition Commission had joined forces to carry out several intervention programmes, such as:

-ICASA and the Competition Commission’s market enquiries on data services, the findings of which were released in December 2019;  

  • ICASA and Competition Commission had signed a Memorandum of Agreement (MoA) to address issues of concurrent jurisdictions between the two institutions to address the definition of markets for electronic communications, broadcasting and postal services, and determining whether or not there was effective competition in these markets and dominance or significant market power in such markets.

To that effect the following was underway:

-A review of section 67 of the Electronic Communications Act (ECA) 36 of 2005, to ensure that the preconditions for regulatory action were proportionate to  the mode/type of regulatory action;

-In 2020, collaborative approaches between the Department and regulators had seen average data prices reduce by 33% per 1GB across major operators.

The internet was disruptive in its very nature, and had and would continue to impact in more ways on every aspect of people’s lives. Facilitating access by everyone to the opportunities offered by the Internet was therefore at the core of this policy. There was a need for an integrated approach to governance of the Internet at an international and national level, as well as policies on managing and administering the Internet in line with the vision set out by the World Summit on the Information Society (WSIS). Management of the Internet should be multilateral, transparent, and democratic, with the full involvement of governments, the private sector, civil society and international organisations. Users must be able to legally access and share information, and run and develop applications and services. Lawful Internet traffic must be treated equally, without discrimination, restriction, or interference, regardless of the sender, receiver, content, device, service, or application. The Internet must continue to be based on open standards to facilitate innovation.

Policy interventions were required to ensure net neutrality. The sector regulator would hold an inquiry into extent to which intervention was required to uphold the principles of an open Internet. The government would put in measures to encourage the establishment of data centres. Development of local search and browser applications would be facilitated. For electronic numbering, the sector regulator would conduct an inquiry into the impact of ENUM technology protocols. The regulator would also identify issues related to Internet governance of relevance to South Africa and propose recommendations to address them.

Amendments to the ECA had commenced in order to address issues related to the cost to communicate, community networks, ineffective service-based competition, lack of sharing, and access to electronic infrastructure to facilitate internet access. The sector regulator had already conducted an inquiry into net neutrality, but was yet to finalise the report. The Department was finalising the data and cloud policy for consideration by Cabinet, which also advocates the establishment of data centres. The Digital Development Challenge Bill was being developed to address ICT Infrastructure and services. The fund would, among others, support innovation. The sector regulator, in partnership with the Department of Communications and Digital Technologies (DCDT) had established a national internet governance forum (IGF) with the purpose of soliciting input to shape how the South African and global internet was being governed. South Africa participated in international forums on Internet Governance such as global, continental, and regional  IGFs, the Internet Corporation for Assigned Names and Numbers (ICANN), the African Network Information Centre (AFRINIC), etc.

The Minister had issued a policy and policy direction on the licensing of high demand spectrum and a Wireless Open Access Network (WOAN) in July 2019. ICASA had published Invitations to Apply (ITAs) for high demand spectrum and the licensing of the WOAN in October 2020.  The closing date for applications in respect of the high demand spectrum auction process was 28 December 2020; and for applications in respect of the WOAN licensing process, it was 30 March 2020. The ITA confirmed, amongst others, that the WOAN applicant must be a consortium of persons and may include public entities as shareholders. The WOAN would be required to provide access to wholesale services on open access principles. The applicant must comply with empowerment requirements, must include diversity of ownership to ensure meaningful participation of all entities involved, including small, medium and micro enterprises (SMMEs) and must be at least 20% black women owned.

The Department was working towards the finalisation of the data and cloud policy which covered the following issues:

-Consolidation of the existing networks of state-owned enterprises (SOEs) such as SENTECH, the State Information Technology Agency (SITA) and Broadband Infraco, to form a state development and investment corporation (SDIC). 

-Establishment of a high-performance computing and data processing centre (HPCDPC) that would include processing and data facilities that incorporated the cloud for cloud computer capacity.

-Establishment of a digital/ICT special economic zone (SEZ) to support local and foreign investment in data and cloud infrastructure and services.

The Department had also published a draft policy and policy direction on the rapid deployment of electronic communications networks and facilities for comment.

Cabinet had approved the National e-Government Strategy in 2017, and as part of its implementation, the Department developed a draft national “Smart Communities Framework” and an e-Government programme for Smart Communities to guide the implementation of e-Government at the local government level. Accordingly, the Department had formalised a partnership with the Internet of Things (IOT) Council and the Development Bank of South Africa (DBSA), which allowed for the implementation of the e-Government programme for Smart Communities.

The Department, together with SITA, had continued with the implementation of the National e-Government strategy, focusing on the digitisation of government services with specific focus on frontline services, supported by a fully functional and accessible national e-Services portal. The national e-Services portal (, had been developed with the aim to publish 50 e-Services of other government departments in the 2018/19 financial year.

To date, SITA had deployed over 100 e-Services over the past three years and published on the national e-Services portal, including those for the South Africa Police Service (SAPS, and the Departments of  International Relations and Cooperation, Higher Education and Training, Basic Education, Small Business Development, Arts and Culture, Justice, Social Development, Correctional Services, etc. These e-Services were primarily responding to the following imperatives: digitalisation of government business processes, big data and data analytics -- including business intelligence -- and the establishment of an open digital platform. The national e-Services portal was currently being reviewed and enhanced to be more user friendly and simpler to navigate by including additional features as Chat-Bot, which was aimed at providing online interactive help, inclusive of people living with disability, an online call-logging facility, Google analytics to collect and visualise user statistics, an online blogging facility for citizens to provide their survey and feedback, and government news flashes through Advert-as-a-Service.

The Postal Services Amendment Bill was developed in 2019 to enable implementation of some of the policy pronouncements in the White Paper. The Bill was submitted for re-introduction into Parliament on 30 January 2020, following the coming into office of the new administration. The Department was awaiting processing of the Bill by Parliament.

The draft South African Post Office (SAPO) Amendment Bill was being developed to address some of the policy interventions as they related to the restructuring and repositioning of SAPO and expanding its mandate to contribute towards universal access to ICT and the digital economy, and to make it a central government service delivery player. Working together with SAPO, implementation of the national address rollout in the unaddressed communities had commenced since the approval of the policy. A number of households had been assigned with physical addresses.  

The new Digital Development Challenge Fund would be accountable to the Minister of Communications and Digital Technologies. The mandate of the DDCF would be to co-finance projects by public, private, and non-governmental organisations, using an open, competitive application process that would significantly contribute to closing the digital divide, as well as to information, communication and technology readiness related to the Fourth Industrial Revolution. The establishment of the DDCF would be preceded by legislative enablement that would set the basis for the disestablishment of USAASA and the repurposing and renaming of the USAF to the DDCF. The Department was currently drafting the required Bill.

The Department was currently in a process of developing a business case to merge the .za Domain Name Authority (.ZADNA), ICASA and the Film and Publication Board (FPB), to establish a new Smart ICT Regulator.


Ms L Bebee (ANC, KwaZulu-Natal) asked how the Department, through the ICT White Paper, would ensure that the auction or selling of the spectrum did not further benefit the dominant industry players to the disadvantage of small players. She also asked the ADG if anything had been done yet to ensure that licensed operators fulfilled their license obligations instead of opting to pay fines, as such practices seemed to undermine the government’s objective of making communication services accessible to everyone.

Mr A Arnolds (EFF, Western Cape) said it was indeed important that every household needed to be connected and that the digital divide be reduced. He asked if the Department could brief the Committee on how the digital fund would be financed, and when it would finalise the digital economic master plan. How would SMMEs benefit from the master plan? He also asked about high data costs, and said the government should do something to reduce the costs, as they were still high.

Mr A Cloete (FF+, Free State) said that the Minister had spoken last year about the unbundling of the Post Bank away from post office -- was this still on the table? If so, what model would be used and in what department would the Post Bank be housed? He also asked the ADG to explain the Digital Development Challenge Fund, and exactly what it was all about. What did the Memorandum of Cooperation (MOC) which the Department had mentioned, contain? With which corporations had the Department signed the MOC.  He asked about the national IGF -- what it stood for and what it was all about. What criteria were used to appoint the wholesaler? He also asked about the SEZs and emphasised that he needed more information on the aims and objectives.

Mr M Nhanha (DA, Eastern Cape) noted that connectivity issues were still with them, and it was frustrating, as the country’s network was still unstable. People in the rural areas were still behind, and Covid19 had made it clearer that the country was still lagging. Referring to expanding the Post Bank, he said he had observed a sorry state of affairs at the country’s post offices ever since the President had announced the R350 payout to the unemployed. People were being dehumanised, and he did not like it. If one looked at the queues, people would arrive at the line at 6am, only to be served at 3pm. Ordinary members could not go to the post office during those days. No one was monitoring the queues and making sure the health protocols were being observed. He also asked what the government had done to minimise the digital divide. 

The Department had mentioned the importance of people trusting the internet platform, and he agreed with this, but he argued that a few weeks back the Russians had been accused of tampering with the Americans’ cyber space. If the Americans could have their cyber space breached, how could South Africa handle this? What was the Department doing to ensure that South African data was safe?

He asked the Department to investigate the rumours that Covid19 was linked to 5G. The cellphone repair sector was being dominated by foreigners such as Pakistanis, so what role was the Department playing to protect the trained South Africans in this the saturated market?

 Lastly, Mr Nhanha he asked what the Department was doing to stop people who were promoting hate speech and violence in the country.

Ms W Ngwenya (ANC, Gauteng) asked about the Digital Development Challenge Fund, and if it was possible to establish the amount needed and what steps would be taken to fundraise the money. She also asked new plans were in place to fight cyber security especially in schools and in government institutions. With the integration at ICASA, what was the state of affairs with regard to job security? Could the Department could give an outline of how rural areas could benefit from electronic connectivity. 

Ms T Modise (ANC, North West) asked what measures the Department put in place when it was outsourcing spectrum to make sure the public sector had enough spectrum.  Also, on auctioning spectrum, did it have measures or a clause for service providers which stated that part of what they had to do was to put infrastructure into rural areas?

The Chairperson also asked about progress in formally making the Post Bank a bank? How far was the application to the Reserve Bank from completion?

Department’s responses

In response on the 5G question, the Deputy Minister proposed that the Committee should take the route that the premier of KwaZulu-Natal had taken, which was to have Prof Marwala and ICASA take the Members through some of the issues so that they were empowered and avoided misinformation.

Ms Jordan-Dyani responded that for questions on the spectrum, she thought it would be prudent to invite the regulator. When the Department issued the policy directions, their objectives were that they wanted licensees to promote the universal provisions regarding connectivity, and had to ensure that there was broadband coverage in rural and under-served areas. They had put specific emphasis on that because of the concern that some of these licensees had had the spectrum for over 20 years, but they were not seeing much improvement in the remote areas. What was of concern was that when the Minister issued the policy direction on the high demand spectrum in 2019, it had explicitly stated that the authorities must consider following the terms of reference, including the access obligation. However, from what they had seen of what the regulator had issued, there were no access obligations imposed. This was a matter they were concerned about. Unfortunately, what was currently contained in the ECA stated that the regulator may consider taking it up or not. The Department had issued a Covid-19 policy specifically to to urge them to issue temporary licences to their operators in order for them to provide schools’ connectivity.

She said the intention of the Challenge Fund was to transform USAF into a digital development challenge fund. This fund was benchmarked on the Treasury’s Jobs Fund, and it had been successful since its inception in 2010. Its mandate would be to co-finance the projects by public and private organizations, to contribute to closing the digital divide and helping the beneficiaries. They were characterised by open and competitive applications and a one-year grant to support innovation, research and development.

Mr Jabu Radebe, DCDT, said the digital economic master plan would be finalised by the year-end at the latest. The draft had been completed and the Department was making consultations with the Minister with the view of getting an approval. The SMMEs would benefit from the master plan in a number of ways, and one of the things the Department was looking at was the whole value chain of any system, and what role they could play. The implementation would identify what role the government would play to assist in the implementation of the master plan, including the SMMEs. The Department was also considering the establishment of a digital transformation centre that would be there to assist the SMMEs. The challenge the Department faced with the SMMEs today was that they would come out with the concept, and there would be a need to develop it into a product, and once they had a product they would need to get financiers to invest into that product. The digital transformation center would assist SMMEs by bringing all relevant parties together at one place.

On data protection, the data policy dealt with data protection, but there was both personal information and there was general data. Issues of personal information were covered by the Personal Protection Act, which was managed by the information regulator. The Department had been in contact with the information regulator, and they were currently engaging with WhatsApp and Facebook in order to analyse to what extent they deviated from the Personal Protection Act. The DCDT was also seeking to establish a high performance data centre so that all government data was stored within the borders of South Africa and within government custody.

On data prices, the Department said it had done something, but it was not enough. When Covid-19 had started, it had negotiated with telecommunications companies to have other applications zero rated. It had identified the need for ICASA to work on the leasing to make sure that it streamed some of these approaches. ICASA and the Competition Commission had signed an MOU. Over and above that, they would be sharing information issues, and this would have a greater impact in reducing data costs.

On the issue of television licence fees, the Department had published a draft White Paper on audio visuals in October, and the closing date was 15 February. Issues raised in that draft would broaden the television access definitions, and would strengthen enforcement issues. Over the last two months, it had been dealing with the matter and had agreed that nowhere would people using mobile phones be charged.

Regarding the unbundling of the Post Bank and Post Office, Ms Jordan Dyanti said the Post Bank would still remain under the DCDT. They were hoping to introduce this to Parliament.  The Department would also provide the Committee with a list of all the bills.

The Department was aware of the queues at post offices, and noted the challenge at the pay points. The marshals to monitor health protocols were there, but did not have the capacity to monitor the queues. However, the Department had tried to see if they could deploy some officials, and it was still finalising ways to deal with this. She was talking with the Treasury to seek funding to employ more marshals, and also with the SAPS to assist the Department.

She said the IGF stood for Internet Governance Forum. At a global level there was an IGF, and it was the same at the regional or continent level.

The Post Bank did not have a banking licence yet. The current Post Bank Act had a clause that indicated that once the Post Bank had been incorporated, SAPO shall be the sole owner and shareholder of the bank. Given stringent requirements for Reserve Bank in relation to how the bank controlling companies were constituted, one of the requirements in Section 34 of the Banks Act stated that those who want to own the bank should be in a financially sound position. As Members knew, SAPO was not currently in a sound state, so the act had to be amended. The application was there, but they were some outstanding issues.

The Chairperson thanked the ADG for the responses and asked that the Department put their answers in writing.

The Chairperson commented that the Committee needed to prioritise connectivity in rural areas and avoid perpetuating the digital divide, and the DCDT needed to prioritise post office queues, which had become Covid-19 super spreaders.

The meeting was adjourned. 

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