Minister of Communications briefing on Targets and Goals for 2007, State of Nation Address

Meeting report

Minister of Communications: Briefing
Ms Ivy Matsepe-Casaburri, Minister of Communications, said that the two topics of her presentation - progress report on targets and goals announced in the 2007 budget speech; and an overview of the State of the Nation address and its impact on public entities - were interrelated.

The Minister reviewed the benefits consequent to the Broadcasting Digital Migration Policy that had been published in the Government Gazette on 01 June 2007. The policy document had been published for public comments. The finalisation had been delayed whilst awaiting the decisions of the World Radio Conference of the International Telecommunications Union (ITU) held in October 2007. Critical decisions that needed to be taken into cognisance were those on the allocation and use of frequencies. It should be ready by 08 March 2008.

The implications of this policy were that television broadcasting would, as approved by Cabinet, from 01 November 2008 be carried by digital signals that would be received by a decoding device incorporating an antenna to be installed on top of the consumer's existing television receiver. 80% of the population would be able to receive digital signals in time for the 2010 World Soccer Cup Event. By 01 November 2011, coverage would be countrywide.

Consumers would, for the next few years, still be able to receive their programmes by means of the existing analogue signals, which would continue to be transmitted through the interim phase of 'dual illumination'. However, by 01 November 2011, consumers would have had to purchase and install their set top decoding devices, costing about R400, which would be manufactured in South Africa. On this date transmission of the existing analogue signals would totally cease.

The Department of Communications (DOC), together with the Department of Trade and Industry (dti) and the South African Bureau of Standards (SABS), was working with manufacturers to develop standards for the decoding devices.

Digital transmission would ensure a much more comprehensive coverage by more efficient use of the frequency spectrum than was possible with analogue transmission.  It would also enable a wider range of broadcasting services. This raised the importance of increasing local content and was related to the issues of national identity and social cohesion. It was hoped that young people would be actively involved in developing local content. To this end, the Department of Arts and Culture (DAC) was taking a leading role in working to support increased local content, in co-operation with the Department of Communications.

A body had been created to oversee the roll-out of digital migration in South Africa – the Digital Dzonga (South). Though it did not yet have a full complement, its Chairperson had been working with the Department in the areas of standards and technology related to set top boxes; economic and financial modelling related to set top boxes, and digital migration awareness strategy together with an implementation plan; and commencement of work for the roll-out of the digital network by Sentech.

The Department was committed to the allocation of a spectrum of frequencies to a national network for digital mobile broadcasting services, and was pleased with the acceptance of the concept of a single network by members of the industry.

The Department was committed to the unbundling of the local loop in telecommunication services, and a report had formally been submitted to Independent Communications Authority of South Africa (ICASA). Unbundling was driven very much by consumer demand, and it was acknowledged that the general public might not be aware of the implications of unbundling. The typical inhabitant of a small town or rural area, used to a fixed land line, might need education as to what was involved in unbundling. Demand would come from particular areas of the country.

The Department was committed to transforming SA Post Offices post offices into Thusong post offices, and these post offices would be rolled out in 100 communities. It was hoped that these would bring empowerment to specific areas.

The Department had also made a commitment to prioritise access to health care and educational institutions, government services, post offices, and the Thusong centres, previously known as multi-purpose community centres, in the roll out of Sentech's electronic communications network for the provision of wireless broadband. This was priority three of the Government’s Apex Priorities. The Department had undertaken a topographic data collection exercise. Sentech would then design the network. The Department would then know how many centres would be covered.

One of the other commitments that the Department had made was that ICASA would be asked to accommodate the services of Worldspace until other arrangements had been made. ICASA had given an assurance to that effect.

The Department had been committed to bring the protocol for the New Partnership for Africa’s Development (NEPAD) ICT broadband network for ratification by Parliament. It was ratified in June 2007 and in force as of 16 February 2008.

The Department had committed itself to a system of toll free numbers, by which citizens could contact government departments using any telephone to raise issues of service. All operators had committed themselves to making this idea a reality by the end of June 2008. The Department of Public Service and Administration (DPSA), in conjunction with the State Information Technology Agency (SITA), had a contact centre number (1020) in operation for more than a year.

With regard to call centres to be located in economically depressed areas, the working group of operators was co-ordinated by the Department. 14 sites were identified for call centres. The dti was currently marketing them to potential companies. The intention was to create employment for young people in those economically disadvantaged areas.

With regard to Sentech's commitment on digital terrestrial television, the first digital transmitters were due to be commissioned by 01 November 2008, and, to date, these were on schedule. There was much to be done to make people aware of their responsibilities to equip themselves to receive the digital signals.

To support the high definition television channel for the 2010 world soccer cup, Sentech decided to provide additional capacity, and National Treasury had considered this in the budget for 2010. SA Broadcasting Corporation (SABC) intended to have six high definition units in place by the end of 2009.

Discussion
Mr M Kholwane (ANC) said that it was important that Sentech could go to the financial market and obtain as much finance as they could. Sentech appeared to be a stepchild in terms of funding, but it had huge responsibilities. He asked if Sentech would be able to obtain the necessary funding. Members had been reading some disturbing news concerning insufficiency in this regard.  He asked if the Department had intervened.

The Minister said that sometimes a Minister and the officials who advised a Minister did not always agree. There were frustrations when some people advised that a business plan must be changed to allow the private sector to enter into areas where it was known that the private sector would not be able to succeed. There was indeed a role for the private sector to play, but the realities of South Africa were that the private sector could not be expected to perform adequately everywhere. Imagining this was so was “a fool’s paradise”. It was necessary to empower those areas to make them attractive for private sector investment.

The Minister said that the issue of the funding of Sentech was very important. Most members of the Cabinet were now convinced that Sentech must be given enough funding and be rescheduled.

Sentech's technology was regarded as the best. As Committee Members would remember, it was Sentech that had first entered into 3G technology. At that time, Government was faced with the competing interests of water, housing and other issues, and spending money on a technology to support a telephone was not of immediate concern to a public preoccupied with finding money for food.

The Minister said that Sentech's business was composed of two parts. The first was signal distribution. In that regard, Sentech had been able to compete with the best in the world. The other was the part that some people would like to acquire. It was not possible, however, to 'hive off' that second part of Sentech's business, which was essential to transformation in South Africa.

There was no lack of confidence in Sentech's capability. The staff who left Sentech were not crucial to the delivery as such. Sentech should visit the Committee to talk to Members. Where the sector was opening up, people could look for alternatives because there were indeed alternatives, made possible by the Department.  From the Cabinet side, the decision had been taken that Sentech should be empowered.  It was Sentech that was chosen to make wireless broadband available to the disadvantaged areas in particular.

Mr Kholwane asked further about the licenses for the under-serviced areas. He asked if there was still a strong case to pursue that particular policy. He understood that 100 areas were involved. He understood the roll out but asked when the roll out would be finalised. In terms of the broader policy, he wanted to be sure that the roll out was not dependent on the profitability of post offices. He was aware of the difficulties with local government.

The Minister said that it would be important to hear her upcoming Budget Speech to learn about the innovative technologies that were to be implemented to benefit the poor. One did not have to be discouraged. The Department had started with the roll out of 100 post offices. The post office itself had become innovative, so that instead of just sending off a telegram as in the old days, staff would be able to send off an email, and for parents whose children worked in towns this was important. The Department was, in co-operation with the Department of Social Development, encouraging the elderly to have Postbank accounts, because they had been discouraged by bank charges. In Postbank, withdrawals three times a month without charges would be possible and would improve life for ordinary people. This was a focus of the Department. Post offices would have to be on line. The post office could expect a much bigger role than had it played in the past, for example, with the transmission of MAFISA funds to farmers in the poorer areas, and APEX funding. It was important thereby for post offices to help grow the local economy and not just make profits. The post office addressed previously disadvantaged areas. Security for old people was a concern, which the post offices could address to reduce dependence on cash.  
 
Ms D Smuts (DA) asked for clarification about Sentech and the roll-out of its wireless network.  She asked if more details were available and said that when such a plan was drawn up, the end result surely had to be clearly envisaged. She asked if the Department of Education would be installing the computer terminals in schools, and the Department of Health installing them in clinics. She asked if the Post Office would do its own installation. She lacked a clear idea of what happened at the end of the wireless signal and asked if it just went into the ether.

With regard to the switching on of the digital signal in November, which the President had also announced, she asked what good it would achieve if the signal was transmitted but there was nothing to convert it into a form that ordinary members of the public could receive, view and listen.

The Minister assured Ms Smuts that those with digital decoding devices would be able to receive the digital signals. Those without such devices would still be able to receive the existing analogue signals. For three years there would be 'dual illumination'. However, 'dual illumination’ meant greater expenditure, and that was the reason for keeping the period short and withdrawing analogue services in November 2011. Public awareness was important, as was ensuring that there would not be a dumping of analogue television sets on to the market. It was important to buy television sets for the future. 

Ms Smuts said that the Minister had told the Committee about the work going on to design set top boxes and the manufacturers' involvement. The Deputy Minister had had an interesting session with the Committee. The Department of Trade and Industry was examining a manufacturing strategy. Ms Smuts asked if it could be assumed that, when the digital signal was switched on in November, people would be able to receive it.

Ms Smuts asked for the Minister's comments on a report in Business Day, 04 March 2008, in which the Minister expressed frustration, similar to that of Sentech itself, on the funding of the digital migration. As Mr Kholwane had said, the Committee had often expressed its frustration. She asked the Minister to take the Committee further into her confidence. She asked if the Treasury lacked confidence in Sentech. She asked if it was because of what had happened to the My Wireless commercial initiative, which, to be frank, had not worked. She asked if Sentech was not really well placed to do commercial work. She asked to what extent policy was a problem. It did seem that the policy was not in place to cover the whole period of digital migration, in which public uptake must be the driving force. The Minister had cited it with regard to local loop unbundling. If it was not possible to persuade members of the public to want digital signals and more channels, then nothing would happen.

Mr Roy Padayachie, the Deputy Minister, said that Ms Smuts' question was significant in view of the oversight role of the Portfolio Committee. It was clear that Sentech was the core of public sector connectivity. If that was the Government's commitment, then the question had to be asked why there were difficulties in funding Sentech, the government-designated service provider for public service connectivity. The question that Ms Smuts raised was precisely where were the problems, and what measures should be taken to ensure that Sentech be given the resources to fulfil its government-assigned role. It might be that there were differing views on the extent to which this public institution, Sentech, should be resourced. It might be that the State was saying that the State's funds could take some of the responsibility, but for other parts it would be appropriate to examine alternative methods. In the discourse between the Treasury and the Department of Communications, one would often hear this oscillation between substantial funding from the public purse as compared to partial funding from the private sector. If that was the financing model for Sentech, then one needed to know what were the obstacles that stopped that from happening, and deal with them. The Committee should interrogate that as part of its oversight. It had to be asked if Sentech did not have a strong enough balance sheet to borrow from the market. It also had to be asked if the Schedules did not allow them. If that aspect of Sentech's business was sufficiently attractive to attract private sector investment, then it was necessary to see if the schedules were an obstacle. Then it might be asked if Sentech should be taken out of the current scheduling, and if the concurrence of the Finance Minister might be obtained. These were the issues that the Portfolio Committee should address. The continued financing difficulties of Sentech should not be countenanced. It was critical to government policy to overcome the digital divide. It was essential to connect the first economy to the second economy.  It was not possible to leave the provision of broadband in the poorer areas to the private sector. It was known that the private sector would not do that. That was why Sentech was charged with the responsibility of providing broadband in the poorer areas.

Ms Smuts said that someone had asked her that morning if the Minister would allow private operators to undertake the work of signal distribution. The question was relevant, she said, in the light of the ongoing concern about under-funding of Sentech. She asked if lateral thinking was appropriate and if the private sector should be asked to do the job. 

The Minister, with regard to private sector signal distribution, said that the private sector had been most supportive of some of the work with Sentech.

The Minister said that in the cluster of departments concerned with the information society, Arts and Culture had been tasked with content development. Under the Constitutional arrangements that were in place for concurrent powers, the Department of Communications did not have concurrent powers. It had set up the intergovernmental forum for itself to be able to go to the provinces and discuss directly with them. The reason the Minister had visited Kimberley the previous day was to have an imbizo with other partners. The Northern Cape was one of the areas where the Department had not sat with the whole executive. The technology would help reduce the need for long journeys for meetings, especially in the Northern Cape, where distances between centres of population were huge. Local government was now taking an interest in what fibreoptics or broadband could do for them. At all three levels of government, people were now more interested in buying in to the new technology. If one examined the radio stations, there were already four community radio stations that used Voice over Internet Protocol to broadcast. It would now be possible to hear them in England through a computer, rather than receive them by radio waves. The policies that the Department had been promoting were now beginning to show their worth and be recognised by the three spheres of government and others concerned.

Mr Norman Munzhelele, Acting Deputy Director-General, Department of Communications, said that the frequency distribution policy provided for two multiplexes – one the national multiplexes, and the second the metropolitan multiplexes. The national multiplexes were going to be distributed for public and commercial broadcasting purposes. Each multiplex would carry eight channels. The provision of mobile broadcasting services had been designated to be provided using the two metropolitan multiplexes. Each of those would carry 12 channels, enabling 24 channels in the mobile broadcasting services.  It was necessary to separate the issue of infrastructure ownership from the issue of provision of services.  

Mr R Pieterse (ANC) asked the Minister to confirm that the size of the footprint (signal coverage area) of SABC would be increased with digitalisation.

The Minister confirmed that the public broadcaster's footprint would be increased with digitalisation, and the Department would give greater clarity to that subject in its 11 March presentation to the Committee. Analogue broadcasting, because of shortage of frequencies, and the greater demand for bandwidth, could not reach such a large proportion of the population.

Mr Pieterse asked if the set top decoding devices had been developed. He asked if a single device could cater for the signals of several broadcasters.

The Minister assured Mr Pieterse that the Department had consulted with manufacturers and broadcasters to ensure that there would be no need for a multiplicity of set top boxes.

The Deputy Minister asked Mr Munzhelele to take note of Mr Pieterse’s comments. 

Mr Pieterse noted, with regard to post offices, that reference was often made to post offices in the well-resourced areas of cities. However, one did not observe much progress with the postal agencies in the rural areas. He asked the Minister if, when the upgrading process began, those postal agencies would receive 'the first bite'. It was essential that the poor should benefit first from the improved postal services.

The Minister replied that the Department had started with the roll out of post offices in 100 economically disadvantaged areas. The post office could expect a much bigger role than had it played in the past. It was important thereby for post offices to help grow the local economy and not just make profits. Security for old people, so that they did not have to carry cash, was a serious concern that the post offices could address.  

Adv P Swart (DA) said that there was a lack of public awareness of the implications of the migration to digital broadcasting, as had been stated in the Committee at its 19 February 2008 meeting. Dumping of analogue sets was a major problem and had been going on for a year or so. There was need for an awareness campaign as soon as possible. He asked if there were any dates set, from the Executive's point of view, for unbundling.

Mr K Khumalo (ANC) asked whether Sentech would be licensed in the same terms as the SABC and ETV for offering high definition television in time for the 2010 World Cup.

Mr Khumalo said that Advocate Swart was providing some defence for the Department.

Mr Khumalo asked about the Digital Dzonga that the Department had established. He asked for the meaning of ‘Dzonga’, and from what language the term came.

The Minister said that ‘Dzonga’ meant 'South'. It was an isiSonga word.

Mr Khumalo asked about the price of set top boxes and their affordability for the poor. He asked also about the size of the boxes. He envisaged built in decoding devices.

Mr Khumalo asked how far the Department had interacted with ICASA on mobile broadcasting services that could be received through cell phones.

Mr Khumalo said that the ANC Conference had resolved that ANC should ensure Sentech should obtain 100% funding from Government. Partial funding of Sentech was not practicable.

The Deputy Minister said the Department was well seized with all the issues, and asked Mr Munzhelele to reply in detail.

Mr Munzhelele assured the Committee about the set top boxes. There were discussions between a working group composed of industry representatives and members of the Department about the set top boxes. It had been resolved that hey should be South African made, and that there should be no dumping. The drafting team had prepared specifications. The Department would be meeting with dti as part of the Business Unusual Project. He expected a price for set top boxes of R400. The set top box would incorporate an aerial. There were discussions with the Treasury to consider the needs of those who could not afford them. The Department was confident that on 01 November set top boxes would be available. The Department would be promulgating the framework.

The Deputy Minister said that he was sure that ICASA would at a later stage present a report to the Committee.

Two weeks ago ICASA had interfaced with Telkom to talk about unbundling the local loop by 2014. They would also open the last mile to those who wanted to tap in. Four sub committees would report to a steering committee.  Committees had been set up with regard to television licensing.

The Minister assured the Committee that the Executive was seized with the matter up to the highest level. All were aware of the fact that officials would have to be encouraged to push the policies forward. It was recognised that Sentech was crucial. It was not a matter of ‘either / or’.

Ms M Morutoa (ANC) said that people were frustrated with the responses they received from the existing toll free number for enquiring about government services. Those who were to operate it should receive training in the Batho Pele concept.

The Deputy Minister said that there were two aspects to the toll free number. There were a number of concerns that the 1020 number was not very effective.

The Minister said that she would take up the matter of training with the Minister of Public Service and Administration. A pilot project (using 112 in the Western Cape) had revealed much misuse of the service.

The Deputy Minister said that a definite date should be put on the table.

Ms Smuts asked about small operators wishing to roll out wireless networks. Smaller entrepreneurs should as of right be able to apply for licenses and start a service. The Minister had previously dealt with big operators. She gave an example of a Wi-Fi service, that of Mr David Jarvis at Knysna, who, she said, was doing excellent work, as were other small operators, who were showing excellent growth. They wanted their right to grow networks. She wanted the Minister to introduce new directives and regulations, and multiple class licenses, or treatment as an organically grown layer that could not afford the fees of the upper tier layers. Their frustration had lasted longer than anyone, including Sentech, since 2003. They wanted the right to build networks. She wanted ICASA to prioritise their case. She said that they used the unlicensed band.

The Minister said Ms Smuts had a democratic right to ask and she, the Minister, had the democratic right to offer an opinion or not.

The Director-General would hopefully be able to say more on 11 March 2008. The Minister would investigate the matter.

Committee business
The Chairperson informed Members that the Committee would meet specially on Friday, 07 March 2007 at 09h00 to meet with representatives of Sentech and officials of the National Treasury.

On 11 March the Committee would meet with the Department of Communications to discuss the Department's strategic plan, its budget, and to reflect on the current financial year. Of especial importance would be the outstanding report on the underwater cable. Digital migration would be discussed further. Also to be discussed was Digital Dzonga.

On 18 March the Committee would hold a special meeting to discuss the South African Post Office.

The meeting was adjourned.