Universal Service and Access South Africa: Strategic Plan & Budget 2008/9 Briefing

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Communications and Digital Technologies

18 March 2008
Chairperson: Mr I Vadi (ANC)
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Meeting Summary

Members met with the Universal Service and Access Agency of South Africa (USAASA) in order to discuss the Agency’s strategic plan. USAASA outlined its Information and Communications Technologies (ICT) framework, legacy projects, financial review,  and the strategy plan and priorities for 2008/09. Members sought clarity on issues pertaining to USAASA’s core function, and noted that there was difficulty in understanding precisely what this was. They also asked for an explanation of the working definition was and comment on the difference in function between this Agency, Sentech, and Post Office. Members also noted that USAASA should have provided a clearer definition of what a digital cyberlab and a telecentre was. USAASA was also asked to comment on why it needed to review the universal service obligations, why it felt it was important and what its main areas of focus were.

Meeting report

Universal Service and Access Agency of South Africa (USAASA) Strategic Plan Briefing
Mr James Theledi, Chief Executive Officer, USAASA, and Ms Cassandra Gabriel, Chairperson, USAASA outlined the strategic plans of the Agency around the ICT Framework, the legacy projects, financial review, and the strategy plan and priorities for 2008/09. They stressed that USAASA’s legacy project was the rehabilitation of telecentres, where a total of 30 telecentres would be rehabilitated.  The major challenge with this project was that there was no mechanism for monitoring and evaluating the real impact: usage of the Access Centres, by the community. USAASA also undertook various projects that involved the rehabilitation of school Cyberlabs, and the training of 30 telecentre managers.  USAASA’s strategic goals and objectives involved turning the organisation’s role from implementor to facilitator, and elevating the role and the impact of the Agency.  Some of the major challenges included empowering USAASA to deliver on requirements placed on it by the Electronic Communications Act (ECA), engaging with the Department of Communications and National Treasury on expanding resources, budget allocation, and unlocking existing funds.

Discussion
Mr R Pieterse (ANC) noted that for ten years USAASA could not execute its mandate. USAASA had managed to achieve a turnaround; however it was too early, in his opinion, for USAASA to ask for more funds and it needed to build an adequate expenditure track record.

Adv P Swart (DA) said that there would always be an underlying question of whether one could justify the Agency’s existence. He agreed that it was too early for USAASA to ask for more funds. There was also some concern about the use of USAASA’s budget, because there seemed to be overspending during the financial year. He also asked for clarity should be provided on the first slide of the financial review, and the digital hubs.

Mr S Nxumalo (ANC) asked why the branding of USAASA was similar to that of the sports organisation, and whether they had thought of changing the name.

Mr Theledi replied that it was not too early for USAASA to say that it had delivered. The organisation’s passion was for the efficient delivery of universal service and access, and the reality was that delivery needed to take place at a faster rate in order to compete globally. In regard to the branding USAASA had thought of the name, but had concluded that changing the name may be a lengthy and complicated process.

Mr Keith Keys, Chief Financial Officer, USAASA, added that the total column on the financial review slide that was queried by Adv Swart was dealing with USAASA’s performance from the inception of USAASA to date.

Mr Winile Lamani, Head: USAF Projects, USAASA, replied that in regard to the Cradock business hub, the approach for rehabilitation was to look at what was lacking according to the business plan. USAASA assisted the business hub in obtaining equipment and building partnerships. Going into the future, USAASA would no longer go to communities and place a digital hub, but would merely link a digital hub to a development hub.

Mr K Khumalo (ANC) noted that the problem with new people coming in and establishing turnaround strategies was that they often undermined the work that was done by the predecessors. USAASA should provide a clearer explanation on the definition of what a digital cyberlab and a telecentre was. USAASA should also comment on why it needed to review the universal service obligations.

Ms D Smuts (DA) said that there was something that was worrying the Committee; namely the standoff between the Department of Communications (DOC), Sentech and National Treasury. The Minister and DOC wanted Sentech to provide wireless access to under-serviced areas. National Treasury brought up issues of whether there were adequate business plans and who would be responsible for the various costs.  USAASA’s legislative job was also to roll out wireless broadband access to under serviced areas. Therefore USAASA could be the solution to the standoff. She wondered, if USAASA decided to take on the project, to what extent they would be able to pick up the tabs for the schools.  USAASA had noted that it would not subsidise unsustainable business; however the whole purpose of USAASA’s existence was to provide services to unsustainable communities.

Mr E Kholwane (ANC) said that he was not concerned by the name, but was rather concerned about whether the particular institution would be able to deliver. Clarity should be provided on whether there was there still a case for Under Serviced Area Licences (USALs). It seemed that all entities linked to the Department of Communications had a problem with National Treasury, and clarity should be provided on where the problem was.

Ms I Mars (IFP) noted that other African countries seemed to be streaming ahead in terms of the delivery of communication services. There was a need to look at where South Africa was going wrong. USAASA’s approach was very impressive and they should be commended for the work done despite the challenges. However, she agreed that clarity should be provided on what the relationship with Treasury and the Department of Communications was, and why Treasury was refusing to unlock funds.

Ms L Yengeni (ANC) noted that there was no fundamental difference between what USAASA presented in this year and the previous year. There was a need to identify the fundamental interventions that had been made by USAASA to date. Clarity should also be provided on how many departments USAASA had formed partnerships with, since Mr Theledi’s term of office had begun. Slide 11 pointed out various strengths and weaknesses of the universal service and access concept. USAASA needed to focus more on the weaknesses as this would have enabled the Committee to assist with improving the strategy. Slide 30 listed South Africa’s digital population index. USAASA should comment on whether the index was an accurate assessment, and should also state from what areas of the population the statistics had emanated.

The Chairperson noted that he had difficulty understanding what USAASA’s core function was. The slide on page 8 on the turnaround strategy did not provide an actual strategy. USAASA stated that they needed to find a new working definition. Clarity should be provided on was USAASA’s current working definition was. USAASA should also comment of the difference in function between itself, Sentech, and Post Office.

Mr Theledi replied that the matter relating to the digital index would be addressed in the workshop presentation. USAASA had been supporting USALs and three USALs would be going up soon. USAASA also faced various challenges in the roll out of basic infrastructure to schools where students lacked basic access to services. The telecentres were the community access centers and there were about 152 telecentres across the country. There were about 10 computers which had internet access, and printing facilities. Cyberlabs, on the other hand, comprised of about 40 computers, and when they were rehabilitated they were equipped with the latest technology. The digital hubs were containers that were packaged with ICT facilities. These existed in rural areas where there were no buildings. Digital hubs were seen as advanced telecentres as they included advanced services such as video conferencing.  USAASA was working with Sentech and Telkom in ensuring connectivity at the telecentres and digital hubs.
 
On the Universal Service obligations USAASA was informed by a review of whether the obligations were useful or effective. In schools, for example, the obligations would require operators to provide connectivity to certain schools for a certain period. Many of these operators would only place a modem and state that they had provided connectivity. USAASA would then come in and provide basic infrastructure. However many agued that the obligation of the operators was to provide basic infrastructure. Therefore there needed to be a review of the effectiveness of the obligations, and whether or not they were needed. USAASA was working with Independent Communications Authority of South Africa (ICASA) on addressing the matter.

In relation to the competition with operators, USAASA’s approach was not to compete with operators, but merely monitor and advise the policy makers on the universal service obligations and access.

USAASA met regularly with DOC and Sentech in order to determine ways of working together. USAASA needed to talk with Sentech on how to leverage in infrastructure in schools. It should be noted that the issue of connectivity of schools was very broad, and it required partnering with the Department of Education.

On the funding of sustainable business plans, USAASA was merely stating that there was a need to look closer into the business plans of the operator, in order to prevent a situation where there was a permanent reliance on the subsidy. USAASA however had the responsibility to subsidise operators who were prepared to provide services.

In relation to the strategy plan, USAASA had been engaging with DOC in the process of formulating strategy. USAASA was inspired by what was happening in other African countries. Mr Theledi noted that the funds from Treasury were ring fenced and USAASA needed to sit down with Treasury and outline its strategy. On the question of partnerships, USAASA had already begun a forum with the Post Office and various companies in order to work on universal service and access issues.

Mr Theledi noted that whilst the presentation may not have provided details of the strategic objectives; a corporate scorecard had been circulated to members which highlighted the key areas of the strategic objectives. The working definition for USAASA had changed. The digital technology had expanded, and people needed to make use of the benefits of the digital technology. The strategy of the agency was to respond to the rights of citizens in having access to universal services.

Mr Lamani added that in regard to the evolution of mandate, there were companies that had certain obligations they needed to sustain. Over time the companies had reached the obligations that they needed to sustain. Obligations were given to all the major communication operators and Small, Medium and Micro Enterprises (SMMEs) which were provided with Under Serviced Area Licenses, to assist operators in providing services to under-serviced areas. However, going forward, there was a need to review the roll out obligations that had been given previously and to decide whether they had been met. There was furthermore a need to look into previous license obligations, and the lessons learnt from those previous obligations to determine the impact the new obligations would have. He noted that there were up to 13 partnerships that had been formed and memoranda of understanding had been signed with various companies.

Ms Gabriel added that Parliament was to blame for the broad mandate given to USAASA in the Electronic Communications Act. USAASA saw that there was a need to serve underserved areas, and provide infrastructure to schools and hospitals, but there were no funds for the projects. However USAASA would do what it could with the limited resources it had. In the areas of policy advice and research USAASA was capable of creating coordination and research, and this was the distinctive strategic competency of USAASA. There had been many questions in the past that had not been answered correctly. USAASA would provide a proper written response and forward them to members of the Committee.

The Chairperson said that he was not fully satisfied with the responses. USAASA was an important instrument, and clarity should be provided on what USAASA should be focusing on. There needed to be more discussion on USAASA strategy. USAASA was managing the Universal Services Fund, and should provide details of what USAASA was going to do with all the funds.  Clarity should also be provided on whether the presentation had been approved by DOC.

Mr Theledi replied that the DOC approved USAASA’s strategy and a meeting took place with senior management of DOC, who signed off the document.

Mr Khumalo noted that the major problem with USAASA lay in page 7 of the presentation. In terms of the mandate, USAASA was accountable to the Committee and the DOC.

The meeting was adjourned.

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