Author: farhad
Last saved by: User
Company: Depart Of Comm

RESPONSE TO QUESTIONS RAISED BY THE PORTFOLIO COMMITTEE ON COMMUNICATIONS 
DURING THE PRESENTATION OF THE DEPARTMENTAL STRATEGIC PLAN

CONTENTS

1.	DINALEDI SCHOOLS
2.	SMMES IN STB MANUFACTURING
3.	SET TOP BOXES
4.	FINANCES
5.	SOE RELATED MATTERS
6.	HUMAN RESOURCES
7.	BROADBAND
8.	DIGITAL TERRESTRIAL TELEVISION
9.	RURAL DEVELOPMENT
10.	JOB CREATION
11.	POLICY / LEGISLATION
12.	SKA
13.	MARKET ANALYSIS
14.	STUDIES IN PROGRESS
15.	LICENSE FEES
16.	RISK MANAGEMENT
17.	STRATEGIC PLANNING

1.	DINALEDI SCHOOLS

a) What are the Dinaledi Schools connected to?

The 375 Dinaledi schools are currently connected to the internet through various public and private sector initiatives. The remaining 125 Dinaledi schools that will be connected as part of Phase 1 of the Schools Connectivity Project will be connected to the internet through the virtual private network. The network will also provide hosting and email services.

2.	SMMEs IN STB MANUFACTURING

a)	What is the role of SMMEs in the BDM value chain 

SMMEs will play a role in the following aspects of Manufacturing of STB components;

•	Electronic PCB ( Printed Circuit Board) assembly
•	 Steel enclosures
•	 Plastic Injection Mouldings for Front bezels of STB enclosures
•	 Power chords and plugs
They will also play a role in the following areas:
•	STB and associated electronic Repair centres to be set up.
•	Content “manufacturing” i.e. Movies, Radio
•	Logistical systems – Delivery of fully assembled STB’s to SAPO warehouses and recovery of faulty units.
•	STB installers and Support centres.
•	Training Companies – STB, Broadcasting, TV Production

3.	SET TOP BOXES(STBs)

a)	Who will be manufacturing STBs (locally or internationally)?

•	STB’s will be manufactured locally.
•	A Request for Information (RFI) has been approved by  the Department of Communications(DOC) which will collect information on potential local manufacturers
•	A Request for Proposal( RFP) will follow the RFI and go out to selected manufacturers
•	A South African Bureau of Standard  (SABS) has been set up to which local manufacturers will adhere to
•	The SABS is also setting up a conformance laboratory to ensure all companies who manufacture meet SABS standards for both quality and functionality
•	Large manufacturers will mentor emerging Small Micro and Medium sized Enterprise (SMME’s)

4.	FINANCES

a)	Explain the drastic increases in the compensation of employees 

The increase is due to the increase in growth of the organizational structure and inflation related adjustments to salaries. During 2008/09 the department was able to fill critical SMS positions which were prioritized based on the available resources, and there have been challenges in filling some of the positions. During 2009/10 and 2010/11 the department had an organizational review which led to the moratorium on staff appointments hence the decrease.

b)	The DoC spends more money in administration than core programmes.

Administration consists of a number of chief directorates including the Minister and Deputy Minister’s office. The number of Chief Directorates in the  Director General’s office, Gender, Disability, Youth and Children, Internal Audit, Human Resources, Strategic Planning unit, Communications and Marketing which is responsible for marketing, Chief Directorate: Finance of which the bulk of money in this unit is for payment of rent on building as well as devolved funds from Department of Public Works (DPW) for municipality rates and accommodation are also under administration. 

c)	Explain what is “fleet services, incl. govt. transport”

This item includes the cost relating to operation and maintenance of fleet services including Government garage fleet, departmental owned vehicles.

d)	Explain the decline in “travel and Subsistence” in light of the increase in growth of the DoC

During 2012 MTEF process, National Treasury requested the department to submit the proposed savings, of which the department did not have anywhere to cut due to the financial constrains we already have. National Treasury provided the department with a spreadsheet requesting the department to cut from those items, of which travel and subsistence was one of the items. The budget cut is also indicated in the 2012 MTEF allocation letter. 

e)	Explain what is “building and other fixed structures” and what is it used for? 

Buildings are fixed structures which are inhabitable by people, animals or plants or which can be used for storage. Other fixed structures consist of all fixed structures other than buildings. It includes roads, bridges and dams. These assets can be used continuously or repeatedly in production for at least one year. The allocation of R435 million over 2012 MTEF is for Broadband Infrastructure.

f)	Explain the huge increasing in spending from 2010/11 to 2011/12 e.g. contractors, consultants etc.

The increase on contractors and consultants is due the reprioritization of funds for the implementation of Public Private Partnerships on 112 Emergency Call Centre. After the 112 Emergency Call Centre was put on hold by the former Director-General, the project was resuscitated due its strategic importance and potential impact on the citizens of the country hence the increase in spending from 2010/11 to 2011/12.

g)	How come the expenditure on /allocation to SOEs has reduced?-
Some entities such as ICASA, Sentech and NEMISA provided National Treasury with the proposed savings voluntarily since 2010/11, SAPO’s allocation was cut by R750 million in the 2010/11 MTEF allocation by National Treasury. National Treasury also stopped subsidy funding for SAPO from 2013/14 financial year. Funding for Dual Illumination ended in the 2011/12 financial year. 

h)	What steps will DoC take to address overall funding shortfall with National Treasury-?

In an effort to secure additional funding, the DoC will be engaging National Treasury on flagship and other priority projects that the department has to undertake based on the financial implications thereof. The Department does make submissions with proper motivation to National Treasury on additional funding requests during the budget process (during MTEF and Adjustment Estimates process). However, it must be noted that the Department is competing with other national departments for the limited financial resources on offer from National Treasury, and priority is in most cases given to the key priorities of government ( i.e health, education, rural development, job creation and crime prevention etc). 

5.	SOE RELATED MATTERS

a)	How do we deal with rectifying the shortcoming of the ICASA and SABC Strategic Plan as raised by the AG in terms of the SMART Principles?

•	The Department will facilitate meetings with both ICASA and the SABC to address the identified shortcomings in the Strategic Plans in terms of the SMART Principles
•	If necessary a recommendation will be made to both ICASA and SABC to enlist the service of the Auditor-General and/or the National Treasury Technical Assistance Unit (because of possible financial commitments, the DoC can only recommended use of these institutions and the final decisions lie with the entities themselves). These entities might consider that they have internal capacity to do this in which case the DoC can only monitor and provide necessary support to ensure that this work is done satisfactorily.
•	A revised document will be submitted to the National Assembly prior to presentation by the two entities as per programme of the Portfolio Committee.
•	Furthermore, the Department has in place an approved revised organisational structure which makes provision for an SOE Oversight and Enterprise Development Branch which will be fully capacitated to conduct thorough SOE oversights with specific focus on broadcasting, postal, SOE governance, telecommunications and ICT and ICT regulatory institutions. The elevation of the oversight function from Chief Directorate level to that of a DDG with sufficient capacity will most definitely strengthen the Department’s capacity to conduct efficient and effective oversight on it SOEs.

b)	Given its performance, the evaluation of ICASA must be continuous. Can we please elaborate on our oversight role on all entities

•	The first primary task is to ensure that the all entities have Boards and ICASA has a fully constituted council. Once this is in place the following have to be attended to:
•	A review of Corporate Governance is undertaken every three years with the assistance of an independent service provider. The review focuses on systems, policies, processes and procedures to control the entities. It verifies the existence of these, whether they have been reviewed and implemented and makes recommendations of specific measures to be undertaken to strengthen these. 
•	The Department monitors the implementation of recommendations of the corporate Governance Reviews through quarterly reports.
•	In addition, the Department through the Shareholder’s Compact enforces and intends to monitor mainly through Annual Reports and meetings engagements with SOEs, continuous discussions with Corporate Secretariat and via Ministerial Bilateral Meetings the following measures 
o	The Induction of Board members;
o	Development of Yearly Board work plans;
o	Existence of Board Committees;
o	Development of Yearly Board Committee Works Plans;
o	Board Charters and Terms of Reference of Board Committees;
o	Delegations of Authority;
o	Remuneration of Boards;
o	Board evaluations;
o	Reporting procedures and reports;
o	Development of other systems, policies, processes and systems.

It is the intention of the Department to:
•	Revive the Company Secretaries Forum
•	Review of Articles of Association of SOEs and monitoring implementation of the provisions of the Articles of Association
•	Monitor adherence to legislative prescripts
•	Monitoring performance of the SOEs through quarterly and monthly reports.
•	Ensure alignment of the Corporate/Strategic Plans of SOEs with the priorities of Government through SOE/DoC meetings, Ministerial Bilateral meetings, multilateral meeting between the DoC and SOEs and ongoing engagement between the Department and SOEs on specific issues.  
•	Facilitation of the Development and finalization of Shareholder’s Compacts.
•	Monitoring of performance of SOEs through, analysis of Annual Reports and facilitation of Annual General Meetings.
•	Monitoring of financial performance of SOEs through financial reports accompanying the requests for financial transfers.
•	Provision of advice and making recommendations on specific matters referred to the Minister and the DoC by State Owned Entities.
•	Participation in teams that are considering matters related to restructuring i.e. Corporatization of the Postbank, etc.

c)	What is the criteria that ICASA uses to enforce Universal Service Obligation (USO) without a proper database – how does it know what must be done where and by whom? 

The USOs are prescribed mainly in documents that are in possession of the ICASA such as licenses issued. It therefore should not be difficult for ICASA to identify what are the obligations that have to be enforced and in respect of which entity.  What may constitute a challenge as we know it is the existence of capacity to enforce the USOs.

d)	ICASA has challenges with the system for revenue collection i.e. license fees collection, this is also an issue that has been raised by the Auditor General. What actions have been put in place to address this?

This is one of the issues that were tackled by the work undertaken by the SharmaMakwande Joint Venture on behalf of the Department of Communications. The report of this work with specific recommendations was recently submitted to the Department. A report was prepared for the Minister with a recommendation that the report and its recommendations should be transmitted to ICASA for implementation. 
ICASA has also developed what they refer to as a Financial Turnaround Plan and this is subject of discussion between the DoC and ICASA. The Plan among other things addresses this specific issue revenue collection.

6.	HUMAN RESOURCES

a)	The  drastic increase  in bursaries and the criteria used to award these bursaries, the benefit to the DoC and the “work back” clause 

For the past three financial years including the current financial year employees are choosing the long-term career development route, i.e. the bursary application. This also assists in addressing scarce and critical skills in the Department. However, it should be noted that they also use the short-medium term route, i.e. short training programmes to enhance their skills and capabilities. The Department has a Bursary Committee that discusses and approves the bursary applications to ensure that the bursary applications are in line with the requirements of the Departmental Policy and other relevant regulations, i.e. the Skills Development Act, National Human Resources Development Strategic Framework, etc. 

All of the bursaries applied for are linked to the work of the employee as well as the skills needs of the Department therefore, adding value to the Department as well as the individual career progression.

The policy has a clause which includes a work back period for the allocated years, for example, if an employee has been awarded a bursary of three (3) years, the employee must serve the Department for a period of three (3) years on completion of his/her studies and this period only commences after the employee has submitted a certificate of completion to HRM. However, if the employee is transferred to another Public Service Department (Government Department) the Department will transfer his/her file to the new Department to take over the bursary since we are employed by one employer but if he/she resigns from the Public Service then he/she must repay the Department whatever was paid towards his/her bursary and this process is closely monitored. 

b)	What is the headcount of the Department and what is this relation to SMS members

The total headcount of the Department is 298 and the ration in terms of SMS members is 88. The detailed breakdown is tabulated in tables 1 and 2 below.
LEVEL | MALE | FEMALE
Level 1-12 | 73 | 136
Level 13 | 35 | 22
Level 14 | 15 | 10
Level 15 | 2 | 1
Level 16 | 1 | 1
Min and Dep Min | 0 | 2
TOTAL | 126 | 172
TOTAL EMPLOYEES | | 298

Salary Level | Africans | Coloureds | Indians | Whites | Total
| Male | Female | Male | Female | Male | Female | Male | Female |
13 | 27 | 21 | 01 | 00 | 02 | 00 | 05 | 01 | 57
14 | 14 | 06 | 0 | 01 | 01 | | 03 | | 25
15 | 01 | 00 | 02 | 00 | 0 | 0 | 0 | 01 | 04
16 | | 01 | | 00 | | | 01 | | 02
Total | 42 | 28 | 03 | 01 | 03 | 00 | 09 | 02 | 88

7.	BROADBAND 

a)	What are the elements of the Broadband Legislation 

The proposed Electronic Communications Act (ECA) Amendment Bill 2012 will make provision for Broadband related matters so as to enable the necessary legal and regulatory framework for Broadband implementation. The elements of broadband to be included in the legislation will address the establishment of an Intergovernmental Broadband Committee, measures to ensure the affordability of broadband services at both wholesale and retail levels, definition of broadband as well as regulations on rapid deployment of broadband services in the Republic.

b)	Explain the most optimal institutional framework to roll-out broadband considering the various role-players like SITA, Infraco, Sentech etc.

Initiatives are underway to ensure collaboration in the delivery of Broadband by Infraco, SITA and Sentech. The planning of a Pilot project in KZN involving SOEs has commenced. The roll-out is awaiting funding approval.

c)	What is the DoC’s approach in rollout of broadband in Provinces, noting that provinces/municipalities are rolling out their own initiatives? 

The DoC approach to the roll-out of Broadband is contained in the National Broadband Policy wherein SOEs will be utilized to provide electronic communication network services. 
The roll out of Broadband will take into consideration existing initiatives, hence the establishment of Broadband Intergovernmental Implementation Committee (BBIIC) to assist in coordination and consolidation of these initiatives.

8.	DIGITAL TERRESTRIAL TELEVISION(DTT)

a)	DTT roll-out target in terms of geographic location versus the population. 

The major parts of each Province will be covered by the digital signal however due to topography of the Provinces; certain areas will not receive terrestrial coverage. Such areas will therefore be covered by Satellite as provide for in the BDM Policy.

60% of the DTT coverage will include all major Metropolitan areas such as Johannesburg, Pretoria, Ethekwini, Cape Town, Port Elizabeth, East London, Polokwane, Bleomfontein, Kimberly, Rusternburg and Nelspruit. 

It is envisaged to achieve 96% population coverage through terrestrial transmission which will include all Metropolitan areas as well as most rural areas.

9.	RURAL DEVELOPMENT

a)	What are the initiatives in the Deep rural areas?

Cabinet has identified 21 District Municipalities (DM)  that require urgent intervention at the July 2011 Lekgotla from the list of all DM identified in the Comprehensive Rural Development Programme (CRDP) .
The Department of Communications has incorporated the 21 DM into the 61 rural areas that are prioritized for ICT intervention in the Annual Performance Plans (APPs) of 2012/13.
The DoC has also developed an ICT Rural Development Strategy which emphasis the need to provide basic ICT services in indentified deep rural areas such as:
•	Public Service Broadcasting Coverage
•	Community Radio stations
•	Postal services
•	School Connectivity
•	Health Centers Connectivity
•	ICT Hubs and Centres

10.	JOB CREATION

The issue of job creation is a top priority for the current government. In order to deal with this structural challenge, the South African government has embarked on a New Growth Path (NGP) in a bid to create five-million jobs and reduce unemployment from 25% to 15% over the next 10 years. Of significance to the effective implementation of the proposed plan would be the valuable partnerships between key social players, business and government. The framework targets 100 000 new jobs by 2020 in the knowledge intensive sectors of ICT, higher education, healthcare, mining related technologies, pharmaceuticals and biotechnologies.
The framework further identifies strategies to achieve the target above, amongst others is, reducing the cost of and improving access to broadband. This then requires the ICT sector in South Africa to create new opportunities within the sector as well as create enough opportunities within the ICT markets to retain the existing specialists.
The Department of Communications, an ICT sector coordinating Department, has a critical role to play considering the potential/untapped opportunities in the Information Communication Technology sector. To execute this urgent national task, the Department developed a job creation implementation plan over the Medium Term Framework, thus ensuring that the ICT sector’s contribution to economic growth and job creation is substantial. The plan is therefore based on empowering and building capacity of the disadvantaged, through the use of ICTs, thereby improving their chances of obtaining income; as well as harnessing ICTs for developing entrepreneurial activities and SMMEs, thereby improving productivity, competitiveness and growth, and therefore job creation. 

a)	ICT Industry Job creation Coordinating Mechanisms

Task Team on Job creation
In facilitating effective contributions of the Department and broader ICT sector to the country's job creation agenda, a number of important structures were put in place. In December 2010, a Task Team on Job Creation aimed at coordinating inputs of the ICT sector was established. The Task team comprised of officials from the DOC and USAASA. The Task Team consolidated inputs from various branches, SAPO, SENTECH, USAASA, SABC, NEMISA and ICASA, culminating in the development of the Department's Job creation plan.

ICT Industry Competitiveness and Job Creation Compacts
Acknowledging the importance of partnerships and government's limited resources, the Department has established a partnership with the ICT Industry. The industry has an important role to play in accelerating economic growth, meaningfully impact job creation and transform South Africa into one of the most competitive developing countries. 
The Department and Information Communication Technology (ICT) leaders signed an Industry Competitiveness and Job creation Compact on 31 July 2011. The compacts commit Industry to a target of 100% broadband penetration by 2020 and the creation of one million additional jobs. Critical areas of intervention include:
•	Policy and regulation work stream is to devise measures to strengthen ICT policies and regulation.
•	Human capital development to ensure the ICT skills requirements of the economy and enable South Africans to effectively participate in the digital and knowledge economy. 
•	Investment capital (both public and private) to fund the large scale infrastructure required to achieve the targeted access and penetration levels, the funding and promotion of small, medium and micro enterprises and the funding of innovation. 
•	Manufacturing capacity needs to be enhanced to significantly increase local content and leveraging global best practice to stimulate manufacturing investment.
•	Local digital content needs to be increased considering the opportunity for application development, the multi-media sector, knowledge creation and;
•	Digitising government facilitating e-government for improving service delivery.

The 6 areas prioritised in the partnership between the Department and the ICT sector will not only enhance the competitiveness of local players, but also ensure that the sector thoroughly contributes to the developmental agenda of government.

b) Job Creation Focus Areas
While the partnership with the broader ICT industry focuses on long-term targets, to be fully achieved by 2020, the Department prioritised focus areas with the potential to create jobs over the medium-term period. The programme on job creation incorporates non-infrastructure areas such as creative industries. This will include amongst others, the development of content generation hubs for Radio and TV, the e-Cadre programme , including capacity building for e-Health Specialists and the development of SMMEs through setting-up of ICT centres/e-Cafes using different business models. Core to the programme is broadband infrastructure, Digital Terrestrial Television, Set-Top-Box Manufacturing and, the creation of an enabling environment. 

The programme has been presented to the top 30 ICT companies and, a Working Group has been set up in this regard. It is anticipated that through this programme, an estimated 151 000 jobs will be created over a three year period. Other interventions were added, aimed at enhancing the sustainability of telecentres and community radios. The following tables provide a break-down of the focus areas, potential jobs and estimated budget.

Table 1: Job Creation Programme: Focus Areas
Project | Anticipated Jobs | Estimated Budget
Broadband Infrastructure | 7880 | R31 million
Digitisation (NDR and Military Vets/Content Practioners | 8400 jobs | R13 million
Content Hubs/Radio | 70 Jobs | No budget
Content Hubs/TV | 210 Jobs | No budget
e-Cadre Programme | 2160 (1350 + 810) | No budget
Incubation Hubs | 1800 | R14 million
Set-Top Boxes | 24 300 | R400 million
SMME/CRCs | 990 | R3 million
E-Cafes/LAN Houses | 900 | No budget
BPOs | 40 000 | No budget
Animation Programme | 300 | R10 million
National Broadband Infrastructure | Unknown (business model) | R100 million
Postbank Roll-out | 72000 | No budget
Grand Total | 151 050 (over 3 years) | R571 million

Deployment of personnel in Community Radios and Telecentres/ICT Hubs

The challenges facing Community Radios and Telecentres/ICT hubs were identified as a threat to the building of an inclusive information society and knowledge economy. To further capacitate these establishments, a need to deploy personnel to mend and support these centres was seen as critical for job creation purposes. Table 2 and 3 shows the estimated number of jobs, number of centres and estimated budget.

Table 2: Estimated budget requirement for creation of jobs using the Community Radio stations
Management personnel per station | Monthly Stipend/Monthly cost per station | Total no stations/Jobs | Total monthly budget all stations | Total budget (per annum)
Station Manager | R10 000 | 127 | R1 270 000 | R15 240 000
Programmes Manager | R8 000 | 127 | R1 016 000 | R12 192 000
Sales/Marketing Manager | R6 000 | 127 | R762 000 | R9 144 000
Chief News Editor | R4 500 | 127 | R571 500 | R6 858 000
Chief Producer | R4 500 | 127 | R571 500 | R6 858 000
Administrative Manager | R3 500 | 127 | R444 500 | R5 334 000
Totals | R36 500 | 762 | R4 635 500 | R55 626 000

The Community radio programme will create a total of 762 jobs, with the appointment of five (5) management personnel in each of the 127 existing stations. The total monthly personnel budget for each station would be R36 500, R4 635 000 monthly budget for all 127 stations and R55 626 000 annual budget. It is critical for the Department to undertake consultation sessions with Community Radio Board of Trustees once an approval has been given.

Table 3: Estimated budget requirement for creation of jobs using existing telecentres and new ICT Hubs
Management personnel per centre/Hub | Monthly Stipend/Monthly cost per station | Total number of jobs to be created | Total monthly budget all Centres/Hubs | Total budget (per annum)
Existing Telecentres
Administrative Officer | R3500 | 141 | R493 500 | R5 922 000
IT Officer | R3500 | 141 | R493 500 | R5 922 000
Total | R7000 | 282 | R987 000 | R11 844 000
New ICT Hubs
Administrative Officer | R3500 | 400 | R1 400 000 | R16 800 000
IT Officer | R3500 | 400 | R1 400 000 | R16 800 000
Total | R7000 | 800 | R2 800 000 | R33 600 000

The table above shows that there are 141 existing telecentres and 400 ICT hubs planned to be rolled-out in the next 3 years. The appointment of an administrator and ICT officer in each of the centres/hubs will facilitate the creation of about 1082 jobs. The estimated annual budget for the telecentre programme is R11 844 000 and R33 600 000 for the ICT Hubs programme. The overall budget for both programmes is R64 596 000 over 12 months.

 In line with government's priority of rural development, the programme would prioritise centres located in rural areas, in particular areas/municipalities or villages that have been prioritised in the Comprehensive Rural Development Programme (CRDP). 

c)  Challenges and Recommendations

The implementation of the job creation programme has had a number of challenges, which would need to be addressed by government, together with the ICT sector leaders. 
•	Firstly, there are no budgetary allocations for government led projects, inhibiting the implementation of projects with high impact to the country's unemployed youth. Projects such as BPOs have a high job creation impact, however lack of funding has delayed their implementation;
•	Secondly, due to a number of challenges in the Department's SOEs, the majority of projects have not taken-off the ground, e.g. USAASA. Moreover, SOEs do not seem to prioritise the government's job creation agenda, thus compromising the effectiveness of the delivery arm of government;
•	Thirdly, the country's DTT programme has had challenges, stalling its implementation. 

It is therefore recommended that:

•	Dedicated financial resources be set-aside to avoid the non allocation of budget to government led projects;
•	Job creation targets are incorporated into SOEs business plans over the medium-term. This will compel these enterprises to prioritise effective implementation of high employment impact programmes and projects;
•	Government should make it mandatory for CEOs of SOEs to have a job creation key performance area in their contracts. In addition a continuous monitoring and evaluation programme should be put in place to foster compliance;
•	Lastly, effective coordination and collaboration with the broader ICT industry has the potential to ensure sharing of resources and risks. Therefore, effective monitoring and evaluation of the competitiveness and job creation compacts is key to the sector meeting its target of 100% broadband and 1 million jobs by 2020. Therefore a resourced project management office needs to be established, comprised of both government officials and the ICT industry captains. A monitoring and evaluation system is a prerequisite for the success of this noble initiative.

11.	 POLICY / LEGISLATION 

a) Is there a need to proceed with all planned Amendments or specific ones only in light of the full ICT Policy Review? Outlining the complete process of amendments in relation to the following Amendments:

•	Electronic Communications  Act
•	Electronic and Communications Transaction Amendment Bill 
•	ICASA
•	Postal Services
•	Post and Telecoms related matters

The need to conduct a comprehensive policy review on telecommunications, postal and broadcasting policies is informed by the need to provide for the creation of a single legislation governing the ICT sector in South Africa. Since 1994, no policy review was conducted. The Electronic Communications Act was not preceded by a policy review process, hence the challenges in implementing some of the sections of the Act, especially sections dealing with competition matters.

Government has adopted 12 outcomes. Each department is required to contribute towards achieving these outcomes. The Department of Communications is the custodian of the policy and regulatory framework for the development of the ICT sector. In order to strengthen the sector to contribute towards the achievement of the 12 outcomes an assessment of the ECA implementation was done. It was observed that certain sections had to be strengthened if ICTs are to respond to achieving the outcomes. The DOC is expected to respond to the question of making sure that ICTs are affordable and that services-based competition is promoted. 

Cabinet approved the National Broadband Policy and the National Radio Frequency Spectrum Policy in 2010 and these has to be implemented through the passing of legislation. These two policies will ensure that the country achieves the 100% broadband penetration by 2020. 

Electronic Communications Amendment Bill
The ECA amendment will focus on technical amendments to strengthen the facilities leasing arrangements to promote effective sharing of infrastructure especially thus lowering the barriers to entry by new and smaller operators. Thus the amendment to the Act aims to clarity of competition issues cannot wait for a new legislation to be introduced to amend the Act to clarify and strengthen certain powers and functions, to make provision for matters emanating from the broadband policy, improve the Act with regards to ownership and control, consultative processes, spectrum management etc., to refine licensing issues, to improve the competition provisions and remove regulatory bottlenecks to encourage the rollout of broadband services in the country. 
	
ICASA Amendment Bill
The debate around the effectiveness of ICASA has been ongoing for sometime. The Department has to respond to this debate in a manner that strengthens ICASA to perform its functions. Thus, the Act is to be amended so as to improve the governance and funding model of ICASA; to establish a Tribunal for the ICT sector; and to provide for matters connected therewith. 

Postal Services Amendment Bill
The President passed the SAPO and Postbank Act in 2010 and 2011 respectively. The passage of these two Acts requires that the Postal Services Amendment Bill be amended. Since the Postbank and SAPO issues are catered for in the Postal Services Act. The Department also received request from ICASA industry to make certain amendments to the Act to make provision for the regulation of extra territorial offices of exchange.

The Amendment of the Posts and Telecommunications Related Bill
The Amendment of the Posts and Telecommunications Related matters act is necessitated by a court judgement which found that certain provision of the government pensions act are unconstitutional. Thus, the act is so as to transfer pension-related provisions of the South African Post Office to the South African Post Office SOC Ltd Act; to enable the payment of a pension interest to a former spouse of a member on divorce or the dissolution of a customary marriage; to delete or transfer telecommunications-related provisions in the Posts and Telecommunications-related Matters Act, 1958; (to possibly repeal the Posts and Telecommunications-related Matters Act, 1958).

b)	What is the Regulators ability to optimally deal with all issues of regulation or should the Independent Broadcasting Authority (IBA) and South African Telecommunications Regulatory Authority (SATRA) role work better

The effectiveness of any economic regulator depends on the powers given to it by an Act of Parliament. ICASA is not functioning optimally due to weaknesses in the current legislations, especially on competition matters. Hence there is a need to amend the ECA to strengthen these provisions. There is no need to go back to the separation of the broadcasting and telecommunications. The current arrangement is correct.
The regulator is under-resourced in terms of human resources capacity and financial resources. 

c)	How do you deal with the lack of harmonization of Legislation? 
The proposed amendment tries to deal with the question of harmonising various pieces of legislations.

12.	Square Kilometer Array(SKA)

a)	What is the impact of the SKA on Broadcasting

In order for the SKA and MeerKAT radio telescopes to function effectively, these radio telescopes must operate in an environment that has the lowest possible level of radio frequency activity resulting from electronic communication and broadcasting services.

The Department of Communications together with the South African SKA Project Office, the SABC, Sentech and ICASA have been investigating methods of reducing interference to the SKA, caused by broadcasting services located within the Central Astronomy Advantage Area. Approximately 40 000 people or 10 000 households are within this area.

The primary cause of broadcasting interference to the SKA is caused by the Sentech transmitting station at Carnarvon, which carries SABC 2 television programming and the SABC Sound broadcasting services SAFM, RSG and KFM. In order to minimise interference to the SKA it is proposed that the high power Carnarvon transmitting station be switched off and de-commissioned, and replaced by 4 low-power transmitting stations. These low power transmitting stations will broadcast SABC-1; -2 and -3 television programmes as well as the RSG sound broadcasting service. 
Frequency changes are to be implemented at 12 high power FM sound broadcasting stations whereby frequencies currently operating above 100 MHz will be changed to frequencies below 100 MHz in order to protect the SKA. This change will have no impact on listeners, but will have cost implications for Sentech.
Transmitting antenna pattern changes are required at 15 transmitting stations. Viewers that are adversely affected by these antenna pattern changes will be able to receive television transmissions via satellite. It is estimated that approximately 3 000 households could be affected.
The amended Broadcasting Digital Migration Policy makes provision for the subsidisation of satellite set top boxes in the SKA area.

13.	MARKET ANALYSIS

a) 	Market analysis in terms of the impact that DoC has made in the market in relation to the Department’s specific interventions and outcomes 
The DoC recognized the importance to collect accurate and timely information to measure its impact on the market and for informed internal and external decision making. The indicator component of the portal will elevate the DoC profile as the authority on the sector and will enhance and further enable the verification of the data by stakeholders and the public.

14.	STUDIES IN PROGRESS

 a) Feedback on the studies that were committed to the PCC in the last year’s Strat Plan presentation 

i.	ICT Data warehouse
In order for the DoC to quantify the recurring instability in the ICT sector, the performance of ICT towards national economy, it was crucial for the DoC to establish an effective and efficient ICT data warehouse. The Department of Communications (DoC) has appointed African Communications Research Institute t/a Research ICT Africa(RIA) to develop an Information Communication Technology (ICT) data warehouse and from this to build an economic model for statistic analysis and reporting

In support of global initiatives to develop a set of universal indicators, and to ensure that these are appropriate for developing countries, RIA has over the last five years worked with international agencies such as the International Telecommunications Union, (ITU), the United Nations Commission on Trade and Development (UNCTAD) and the Organisation for Economic Co-operation and Development (OECD) to collect current and up to date data, particularly largely the absent demand side data. South Africa’s national indicators have not been submitted to ITU since 2007. 
This project will ensure that South Africa ICT statistics is available to the UN system. It will also draw out the available demand side information national household and expenditure surveys and supplement these with the data from the nationally representative household survey conducted in 2011. It will also identify ICT data available in the national accounts and collaborate with StatsSA on disaggregating and extracting this data in a way that will build an accurate representation of economic and employment contribution of the sector. There are some known problems in this regard. For example employment is measured in the sector only in relation to network operators and service providers, the extensive retail dimension of these activities are only measured with the retail sector not the communications sector.
The Data Warehouse will be captured regularly and the modelling developed which will be capable of contributing significantly towards evidence-based policy formulation. This will enable the co-ordination of information and data gathering creating a single repository of information for decision-makers from which they can receive, retrieve, and analyse data. The data warehouse also allows for improved integration of the sector and its policies within the national economy and decision-making by enabling the tracking, monitoring and evaluation of the economic and welfare effects of policies.
ICT Research Africa has been commissioned to design and populate the database. The database has been developed and populated. The first bulletin has been developed.

ii.	Broadband Penetration Study
The Broadband Penetration study commenced in January 2012 and the first reports are due at the end of March 2012

iii.	E-Readiness Report: 
The Country e-Readiness report was finalised and published in August 2011. The adequacy and reliability of indicators in each sector was examined in depth. Some sectors were excluded from the e-Barometer because of insufficient indicators and non-availability of information. An incremental approach was applied. The report which measures the state of ICT focuses on the in the following sectors:
o	Individuals,
o	Households,
o	Community,
o	Government,
o	Education and
o	ICT Sector

The e-Readiness report is quite comprehensive however one can draw the cross-cutting conclusion that not only is our local progress slowing down but in addition whilst we are making progress, we are behind the improvements made by other peer group countries hence we have lost our “Continental ICT Leadership” status. 

iv.	Infrastructure Mapping
The Infrastructure mapping project commenced in January 2012 and will be concluded in September 2013.

v.	ICT Sector Performance Analysis
The Department developed the ICT market performance report which was finalised in November 2011. Although the report is quite comprehensive the key findings, amongst others, can be summarized as follows:
o	There is an indication of growth rates of between 3% and 8% in the mobile sector, with the sector continuing to grow at a rate above the national growth rate despite inclusive data from some of the unlisted companies.
o	Traditional public switched telecommunications network fixed line voice services are static or experiencing minor declines in line with global trends, however these losses have been counteracted  by increased activity in data services.
o	Mobile data is also growing in relation to voice services, although the use of these services remains constrained by the high cost of calls.
o	The South African broadband market is characterized by extraordinarily high prices and low penetration compared to other middle income countries.
o	Mobile retail rates appear to be relatively unaffected by the enforced reduction of wholesale termination prices following the ICASA termination rates effective since March 2011. 

vi.	Research Partnerships
Five Memorandum of Understandings have been signed with the following Institutions:
•	Walter Sisulu University
•	University of Pretoria
•	Vaal University of Technology
•	Durban University of Technology
•	University of the Western Cape

15.	LICENSE FEES

License fee collection is a regulatory function. ICASA is allowed by the ECA and Postal Services Act to set a license fee framework for the telecommunications, broadcasting and postal sectors. There is very little the Department could do in this regard as this is a regulatory function as defined by the said legislations.

16.	RISK MANAGEMENT

a)	Progress on the mitigation of the risks identified in last year’s Strategic Plan 2011/2012

No. | Risk Description | Mitigation | Current Status

1

Inadequate governance structures to support the 6 flagship projects

•	Implement project management structures
•	Establish Project Performance Board to monitor project progress

Cleared

2

Inadequate structured engagement with stakeholders and SOEs at a Project Level

•	Identify Key Stakeholders
•	Implement Project Engagement Strategy
•	Develop Roles and Responsibility Matrix (MoUs)
•	Implement Stakeholder Management Branch (proposed structure)

•	Cleared

3

HR capacity constraints to implement Projects - recommended structure available but not capacitated (Broadband, Dzonga, Post Bank, DTT, Rural Development, E-skills).

Prioritise recruitment of critical posts

•	Critical posts have been prioritised and advertised, e.g. DDG Administration, DDG SoE oversight and ICT enterprise development, ICT Policy and Strategy,  DDG for Information Society Development and Research, Chief Director: Broadband, Chief Director: Economic Analysis and Scenario Construction
•	Treasury will be engaged on additional funding

4

Lack of appropriate Skills — DTT, Post Bank, DTT, Rural Development, E-skills

•	Project Management (PM), Project Financial Modeling and Technical Skills considered as critical skills in recruiting
•	Embark on formalized PM and other technical skills training

•	Technical advisor to the Minister has been appointed to advise on DTT, and recruitment process for the four SMS posts have commenced.
•	Internal secondments have already been made for prioritised areas such as the Cyber security inspectorates as a training initiative.
•	Skills audit exercise to be rolled this year
•	Leadership and development programme has been prioritized for the 2012/13 financial year.

5

Insufficient Funding (Broadband, Job Creation, e-Skills)

•	Seek additional sources of funding
•	Engage with National Treasury for additional funding (ICT Infrastructure Fund)
•	Leverage on the Jobs Fund
•	Leverage private sector initiatives and resources

•	Negotiations with the National Treasury will commence during the budget adjustments in June 2012.

6

Lack of data in support of evidence based policy making and project planning

Establishing data warehouse.

•	e-Barometer was developed and launched as one of the tools to be used in collecting relevant and reliable information in this regard.
•	Establishment of Data warehouse has commenced and is at an advanced stage.

7

•	Lack of project financial modeling for realistic project costing.
•

•	Appoint financial experts.

•	To be addressed in the 2012/13 financial year.

8. | Low uptake of DTT Services and STBs which could impact on switch-off. | Embark on vigorous awareness campaigns in collaboration with stakeholders and service providers. | •	An awareness campaign is planned for in the 2012/13 FY

9.

Jobs may not be readily available

Prioritise projects with visible and immediate job creation

•	Job creation strategy was developed and approved by Top Management during the current year. The strategy will be implemented in phases.
•	An advertisement has been made on the 2012 e-cadres with a 14 February closing date and short-listing is now being undertaken.

10

Lack of collaboration to focus on rural Institutions on e-skills

•	Collaboration to be aligned to the needs of the country (prioritize rural institutions)
•	Refocus and extend engagement

•	Cleared

11 | e-SI not a Legal entity | Prioritise Cabinet approval of proposed legal status of e-SI | •	To be addressed in the 2012/13 financial year.

12

Extensive collaboration required with municipalities, stakeholders and service providers on broadband.

•	Fully operationalise the Broadband Intergovernmental Implementation Committee
•	Extend collaboration with municipalities, stakeholders and service providers

•	Broadband strategy has been approved that outlined how the process will follow including Implementation Committee.

17.	STRATEGIC PLANNING 

a)	Is there an element of copy and paste in the Strategic Plan
There are obvious areas that will not change from year to year such as Mission, Vision, Programme and Sub-programme names and function etc. hence there is element of repetition from last year’s plan. Furthermore, the strategic plan is a review and a progression from last year’s strategic plan as it covers the 3 year MTEF period hence it will not necessarily deal with all new issues from square one but build on existing priorities with the inclusion of new targets based on the changing environment as well as the exclusions of irrelevant or achieved targets.

However through the 18 versions of the strategic plan, there are items only on page 62 which make reference to 2010/11 FY that should not have been printed in the document. This error is due to an error in version control as various versions were being submitted to the designers during the design and printing process. The latest version does not have this error on page 62. 

b)	The DoC to review the number of targets and identify areas for streamlining
This process has commenced and will be reflected in the revised plan.

c)	Are the Quarterly targets SMART
The quarterly targets are SMART as they have been reviewed on 2 occasions by the National Treasury & the Department of Monitoring and Evaluation. Furthermore the Auditor General audited the APP and gave an opinion that they are satisfied with the quarterly targets being SMART.