ATC150508: Report of the Portfolio Committee on Telecommunications and Postal Services on the oversight visit to Gauteng and Durban from 24 November to 26 November 2014, dated 14 April 2015

Telecommunications and Postal Services

Report of the Portfolio Committee on Telecommunications and Postal Services on the oversight visit to Gauteng and Durban from 24 November to 26 November 2014, dated 14 April 2015

  1. Introduction

In the 21st century and beyond, Information and Communication Technology (ICT) is seen as an essential tool for businesses, helping businesses to remain competitive in domestic as well as international markets. The Global Competitiveness Report regards connectivity as a key component of the public infrastructure, and high bandwidth is seen as becoming as an important a public utility as drinking water[1]. The Portfolio Committee on Telecommunications and Postal Services conducted oversight visits to various entities in Gauteng and KwaZulu-Natal as part of the Committee’s programme for the third parliamentary term. The Portfolio Committee on Telecommunications and Postal Services had envisioned and planned an oversight visit to its entities in Gauteng and KwaZulu-Natal from 24 to 28 November 2014. However, due to a change in the Parliamentary programme, members were requested to return to Parliament for an urgent sitting of the National Assembly House.  The effect of this was that the Committee was only able to conduct its oversight visit to Gauteng and KwaZulu- Natal from 24 to 26 November 2014.

The oversight visit by the Committee was in line with its role and the mandate as per: (i) the Constitution and; (ii) and the National Assembly Rules. The oversight visit served as the measurement indicator against the service delivery commitment by the 2014/15 Strategic Plans and Annual Financial Statements of the Department and its entities.

The Portfolio Committee’s oversight approach entails visiting various entities such as SENTECH, South African Post Office (SAPO) iKamva, Telkom and State Information Technology Agency (SITA) to monitor and oversee the implementation of key national priorities which underpin the National Development Plan (NDP).

Amongst others, the areas of focus of the oversight visit was as follows:

  1. The role played by SENTECH in signal distribution in general, as well as the state of readiness on digital migration in collaboration with ICASA;


  1. Successes and challenges experienced by Universal Service and Access Agency of South Africa (USAASA) in deploying broadband facilities in uMsinga area;


  1.  Visit to SAPO on state of entity in light of strike and the turnaround strategy;


  1. Visit to Telkom, which included a visit to its Data Centre as well as look at the impact of Local Loop Unbinding, Schools connectivity, separation of retail and wholesale business as well as the impact of dated Universal Service Obligations (USOs).


Furthermore, this oversight will also assist the Committee to measure progress on the issues already raised during the previous oversight visits by the Fourth Parliament including issues raised in the previous Committee’s Legacy Report.


  1. Committee Delegation

The delegation from the Portfolio Committee would comprise three (3) members and three (3) Support staff.




Hon MM Kubayi

Chairperson and Leader of the delegation

African National Congress (ANC)

Hon N Ndongeni

Member of the Committee


Hon DR Tsotetsi

Member of the Committee


Support  Staff



Ms H Salie

Committee Secretary


Ms S Goba

Committee Assistant


Mr S Nene

Committee Researcher



The Committee received apologies for non-attendance from the following members:

  1. Ms L M Maseko - African National Congress (ANC)
  2. Ms M V Mafolo - ANC
  3. Mr P P Mabe - ANC
  4. Ms J D Kilian - ANC (alternate Member)  
  5. Mr M Ndlozi -  Economic Freedom Front (EFF)
  6. Ms M R Shinn -  Democratic Alliance (DA)
  7. Mr C Mackenzie - DA.


Day One:  24 November 2014: Gauteng Part of the Oversight: Visit to SENTECH and SAPO


  1. Visit to the Sentech Tower in Brixton

The Committee conducted an onsite visit of the 245,3m Sentech Tower in Brixton which carries the antennas of the Johannesburg radio and television terrestrial transmitters and therefore allows for broadcasting of both radio and television signals from the site.  The inspection covered an explanation of the maintenance of equipment used at the tower, the power output used at the tower, the challenges experienced by Sentech, which included the congestion of frequency as well as the lack of spectrum, security control, its new technology, DTT readiness and screening of visitors, amongst others.

  • The construction of the site took two years between 1961 to 1963 and it is the only structure that has a helicopter view in the continent and the world. The only other identical structure is in Germany;
  • The tower has different antennas that radiates signal of radio signal of cars;
  • It is one of the highest  telecoms  towers which provides signals to 7 different  television stations, and 21 different radio stations, public broadcasting, commercial and community broadcasting around Gauteng;
  • It has an additional 2 Digital Terrestrial Television Multiplexes;  one Multiplex carries more than 23 television channels on 1 MGHz, instead of 1 television channel carried by 8 MHZ in the analogue environment ;
  • The tower is currently running a pilot on Digital Analogue Broadcasting  in providing spectrum for radio services;
  • There are standby generators which automatically kicks in 5 seconds once power is cut –off and it equally takes 5 seconds for the generators to switch off once power is back
  • Health checks are conducted for all employees before they climb up the tower;
  • There are two types of maintenance done on the site, the scheduled maintenance done annually, and the corrective maintenance;
  • There are 3200 employees of SENTECH who maintain this site.


The Committee was informed that some of the challenges in respect of congestion and lack of frequency should be rectified by the Digital Terrestrial (DTT) roll out, which would equalise the situation. The Committee had an opportunity to inspect new transmitters and other equipment which will be phased in, in compliance with the DTT policy framework. This process will ensure stability, reliability and cost effectiveness. Other issues highlighted included the annual maintenance of the tower, the ideal of a one tower system and amongst others, the  disposal of old equipment in compliance with policy.


  1. Challenges/ Observations
  • The quality of Power FM signal is relatively poor since it operates on the 20km spectrum , however, SENTECH has been working with the station and the regulator to resolve this challenge, which is mainly due to the unavailability of spectrum in Gauteng;
  •  The signal challenge will be sorted out once the country migrated to Digital Terrestrial Television (DTT) environment;
  • Entrance of the new broadcasting players in the market in Gauteng is hampered by the non-availability of spectrum and this in turn limits the revenue streams of SENTECH;
  • SENTECH spends about R 600 000 per month on Eskom for energy. Whilst the figure can be reduced during the DTT, it won’t however be substantial given the fact that SENTECH also plans to share or lease its infrastructure to other telecommunication operators which will ultimately escalate or bring the price close to what the company is currently paying Eskom.


  1. Meeting with labour and employees of Sentech (with audio link to provincial offices) Honeydew Head Office

The Committee met with organised labour, the Communications Workers Union (CWU) as well as employees that do not belong to the union. An audio link was transmitted to the venue which allowed for input from various provincial offices.

The following issues were highlighted by the employees:

  • The Committee was informed that the recent strike action was primary due to the contest for a 13th cheque, as this would align Sentech workers with other state owned companies. Employees in the Bargaining Unit want SENTECH to implement 13th Cheque so as to align the company to other SOCs in government (USAASA, ESKOM).

The Committee was informed by employees that this request was ignored by the Human Resources of SENTECH.

  • A CWU representative, who is also an employee, informed the Committee that the strike could have been averted had it not been for the negative attitude of management in averting such strike action.
  • The employees requested that the Committee assist with two specific investigations namely;
  1. allegations of nepotism on the part of management
  2. the failure of management to pay performance bonuses  
  • The employees contended that the HR manager is not neutral and does not engage staff. The employees further called for the removal of the HR manager.
  • The general non approval of policies and the fact these policies can change without proper consultation with the employees was highlighted.
  • SENTECH is managed like a Spaza Shop and employees through their labour unions and those not represented are not consulted by management.
  • The employees also complained about the fact that they are employed on a temporary basis for long periods without the possibility of permanent employment.
  • The training offered to staff is not officially recognised by South African Qualifications Authority (SAQA).
  • SENTECH has become a family/friendship-only organisation which overlooks academically qualified and experienced internal employees to less qualified external people. Only one person of the internal employees was promoted (Mr Teboho) to management. The rest are external people.
  • When the then new CEO took over in 2011, he promised a leaner structure but a few years later, it has become “bloated at the top”.
  • The Human Resource Division is called “in-human resources” and workers were denied access to sanitation facilities/ toilet facility during the industrial action.
  • Even after SENTECH launched Project Sakhumtu-qualifications and work experience are still not recognised.
  • The issue of equal pay for equal work needs to be addressed as employees are doing the same work but are paid at various salary levels.
  • Issues of contention concentrated mostly around the Human Resource (HR) issues and included issues of low morale, lack of motivation, lack of skills development, arrogance of the HR managers, general lack of trust of management, high level of intimidation and victimisation, lack of consistency in management style, lack of tools of the trade for certain employees such as technicians, lack of clear policy around the allocation of leave, salaries are not market related, the issues in respect of bursaries need to be addressed as it has fallen away, amongst others.
  • Unfair treatment of employees, some employees are required to have a Masters Certificate others are not, some receive tools of trade, laptops, cell phone allowance and others are not; some managers process overtime allowances and others not.


Supply Chain management

  • The Public Finance Management Act and Treasury Regulations, which require three (3) quotes is in many instances, seem to not be applicable to SENTECH as it operates in far flung areas where most of their site/towers are based.
  • The regulations requires 3 quotes whereas in most areas where site towers are based, there is usually one supplier of hardware or software that engineers needs urgently to fix the signal distribution tower.

Employees were also given an opportunity to express their views anonymously, in writing. The following concerns were received:

  • The use of consultants is still rife and should be eradicated; the policy of granting car hire for executives should be investigated; staff should be able to interact with the Moderation Committee which should be less secretive and the employment of non-technical people in technical positions should be addressed.


  1. Meeting with Management of Sentech Honeydew Head Office

The Committee requested that managers raise issues affecting them within the workplace.  In the absence of such input from managers, the Committee put the concerns of employees as listed in 2 above to the management of Sentech.

The Chief Executive Officer of Sentech acknowledged that he is aware of these issues and that there are plans in place to address the concerns of staff. He noted that the period of 2002 to 2010 was a challenge for Sentech as the company would have been bankrupt within a year. He admitted that almost all HR policies have not been updated since 2004. The issues addressed by staff were responded by management as follows:

  • The primary focus in respect of change to the institution would include the improvement of communication between management and staff on day to day issues will be addressed and the interpretation of the HR function within the institution will be clarified.
  • The issues of the 13th cheque of staff is in the process of being discussed and management is fully committed to all policy issues in respect of the 13th cheque will be dealt with by the end of this calendar year.
  • Victimisation in the institution was admitted. The rebuilding of trust, although not an easy task, would be an important process for the institution to undertake.
  • Policies ensuring the promotion of staff has been completed and vacancies now need to be filled. 
  • Bursaries had been stopped and this necessitates a need to relook at the Skills Audit of the institution.
  • A new plan which will concentrate on skills and enterprise development will be implemented.
  • Issues of nepotism have been reported to the Board and will be addressed.
  • The policy on the tools of the trade is available on the website of the institution. All staff have received the required tools of their trade and consistency exists in this regard. The CEO undertook to ensure that managers ensure that staff is aware of the policy.
  • Policies on the grading system and salary anomalies are in place and will be dealt with by recognising the differentiated workload of staff. 
  • Performance bonus and change management issues are new issues and will be addressed in future.
  • Sentech is introducing an engagement plan with staff on all levels. People management issues will be addressed and relationship building exercises will be implemented in future.
  • The Committee dealing with the composition and appointment of employment equity members was constituted illegally.
  • Union members have been communicated with but have failed to keep designated appointments of meetings with management.
  • 99 per cent of SENTECH management is going through a leadership development programme.
  • Issues of alleged nepotism and maladministration have been referred to the Board Committee, Audit and Risk to deal with it.
  • On treatment of staff: SENTECH has indicated that the recognition agreement entered into with labour union only recognised shop stewards to be given time to attend union commitments and meetings. However, one of the shop stewards was elected to a provincial union position and SENTECH policy does not cover such a move by the shop steward and this is causing conflict in both management and labour.
  • The supply chain management policy is work in progress and is almost 80 per cent complete. In the past SENTECH work was done through 80 per cent deviations which welcome unwarranted audit findings.
  • Most of the employees in the bargaining chamber have requested to sign performance agreements.
  • Not every manager received a gratuity, but all staff received their salary increases. 



  1. Site Visit to Sentech Honeydew Transmission Centre

The Committee conducted an onsite visit of the Sentech Transmission Centre in Honeydew, which carries content from the studio to the satellite transmitters.  The inspection also covered an explanation of the KU Band facility and an explanation of the use of various kinds of satellites used by Sentech to transmit signals.


  1. Meeting with employees of the South African Post Office (SAPO) Eco Point Head Office

The Committee requested a meeting with recognised unions at SAPO. DEPACU was the only union to attend, as well as employees of SAPO.  A video link was transmitted to the venue which allowed for input from various provincial offices.

The following issues were highlighted by the employees:

  • The video link in Witpos allowed for the interaction with management and not workers as intended by the Committee. The relevant communication did not reach the workers in Witpos and in Limpopo a manager refused to allow workers to attend the meeting.
  • DEPACU indicated that they were alerted by management of the meeting with the Committee at the very late hour of 12:00 on the day of the Committee’s arrival.
  • The employees demanded employment equity and equal pay for equal work. There are four differing levels of workers, doing the same job, but paid on dissimilar salary levels.
  •  The negative financial position of SAPO was of great concern to employees.
  • The salaries of employees are not paid on time and at the time of the oversight visit, employees were not paid yet.
  • Employees do not trust that their monies are safe in respect of their pension pay-outs. Staff have been rumoured to engage in activity that would result in their dismissal, in order to ensure that their pensions are paid out in advance.
  • Scepticism by workers and lack of trust in management to implement agreements were raised. This was based on previous agreements not being implemented.
  • SAPO has been involved in a dispute with 65 of its managers since 2011.
  • The poor conditions under which casual workers work to maintain their jobs. The Committee was informed of a woman who was eight months pregnant and still has to deliver letters on a bicycle.
  • Concern was expressed in respect of SAPO offices that was closed due to non-payment of rental, offices that are unoccupied in Gauteng and the failure to pay for services procured.
  • The failure of management to intervene in a reported matter of Ms Boniswa, a woman who was stripped naked in public and taken video of, which was circulated by fellow colleagues at the Bloemfontein Centre, with no resultant consequences for their actions, was raised by the union.
  • SAPO employees wanted to know who would be held responsible for the relocation of SAPO Pretoria Head Office to the controversial new Head Office at Eco Point.
  • Employees wanted to know whether government’s interest was in SAPO’s competitors, such as PostNet, DHL, etc as most government departments uses these postal companies over SAPO.
  • Employees have been informed by the Ministry appointed Administrator that the company was in a dire financial position.
  • Employees wanted to be guaranteed whether the government bailout or a subsidy for SAPO was on the verge of returning or coming back as the revenue outstrips the expense of the company.
  • Regions were requested to exercise cost containment measures. However, this does not apply to Head Office.
  • SAPO has been faced with 65 disputes from managers ranging from salary parity,  forensic audit, facility that employees are subjected ( a light bulb has not been fixed since the last 5 years ago; issues of racism in regions  etc and in 2011 this issue was elevated to the then Minister Pule and till today, there has not been any feedback.
  • Employees implicated in the forensic report. Instead of being suspended or fired are in charge of the Strategic Plan of the company.
  • R60 million was set aside to deal with salary parity, but that money disappeared without a trace.
  • Current employees do not want to contribute to the post medical retirement of employees who were employed in the Apartheid regime.
  • Some Regions do not have the tools of trade. There are no photocopy machines, printing machines and printers.
  • Rental and other service providers were not paid since April 2014.
  • Post men and woman are not adequately communicated to or are not informed at all about issues in the company.
  • There is no communication or information sharing platform with employees. Employees obtain information about SAPO from the media.
  • A supervisor in Limpopo SAPO Region allegedly refused employees to attend the video session with the Committee.
  • Further issues highlighted by staff included the lack of communication between employees and management; loss of SAPO clients; processes needed in respect of   corruption and maladministration; deplorable conditions in which employees have to work; suggestions on the creation of future business ventures of SAPO; accountability of management; lack of resources; permanent employment of casual  workers; lack of internal communication; procurement issues; audited financial  statement requested; lack of tools of trade; issues of post-retirement medical aid; the review of SAPO policies, amongst others.

Employees were given the opportunity to express their concerns anonymously to the          Committee.

  1. Meeting with DEPACO Labour Union at SAPO


  • Since its inception in August 2013, DEPACO represents 53 per cent of the employees with a total figure of 5000, however SAPO only pays for 1 900 subscription fees to the Union.
  • The Union requested the CCMA to conduct an independent audit on the number of employees per union at SAPO.
  • Post is not delivered as per the Postal Act. There are allegations that a certain region had hidden the mail for two months.
  • There are no policies at SAPO - policies are all under review.
  • There are allegations of unfair treatment of labour unions. SAPO paid approximately

R 400 000 for National Congress of Unions for accommodation and transport of delegates. However, SAPO has refused to pay for DEPACO National Congress.

  • 105 employees from Germiston who embarked on a strike were barred from coming back. Only Communication Workers Union members were welcomed back after the strike.
  • Employees of SAPO should fall under “essential service” so that they are not allowed to strike.


Human Resource Management

  • Poor HR management at SAPO. If you come kicking the door of the CEO’s office they will agree with your demands and if you do not kick the door, you are not entertained as a union.
  • SAPO has committed to converting 900 casuals into permanent employees by December 2014.
  • The SAPO Act says, when there is a vacancy at Group Executive level a person must act for a maximum period of 3 months and if the position is not yet filled, a different person must be appointed in an acting capacity. However, the Group Executive has been acting ever since the post became vacant.
  • Labour unions propose that municipal meter reading be done by postman in order to create additional responsibilities for SAPO employees.
  • The Committee undertook to follow up on the issue of Ms Boniswa. It did not support any bailout of SAPO.
  • ICASA does not conduct adequate monitoring of the postal sector. As a result letters are not delivered within the prescribed timeline for delivering a letter, as stipulated in the licence conditions.


  1. Meeting with management of SAPO

The Committee met with the management of SAPO and indicated that the observations made from the earlier meeting with staff, created an impression of panic on the part of staff in respect of jobs and salaries. The Committee noted that it does not support a bail out for SAPO as the entity was required to be self-sufficient. The Committee formally put the issues raised by staff to management as highlighted in item 5 above. The Committee also formally requested an update in respect of the deadline and submission of the annual report of SAPO and feedback on issues discussed at a committee meeting on 31 October 2014 in Parliament.  

Management responded to the issues put to them by the Committee as follows:

  • The SAPO management indicated that there are three(3) main cost drivers of the company:  Employee Costs, Transport Costs and Property Rental Costs.
  • There is a huge trust deficit between management and labour/employees and lack of trust between SAPO and its customers.
  • Industrial action is a culmination of many issues including the three 3-year delay in converting casual labour to permanent.
  • The labour model of SAPO dependent too much on casual labour.
  • SAPO once had a single agreement with labour. However, there has since been two splinter groups from the original labour union.
  • Management is happy that this labour unrest was limited to Gauteng only and that the impact could have been more dire had it affected all the regions.
  • There are 211 cases of intimidation and vandalism of properly which have been reported to the police. However, management is struggling to sign up witnesses.
  • SAPO has developed a new turnaround plan. Treasury advised that the plan submitted did not meet the requirements and therefore no letter of guarantee could be issued. The process of re-doing the business model has taken time and management worked jointly with the Department and Treasury to submit the annual financial report by Friday, 21 November 2014. The balance sheet of SAPO indicates that the entity is technically solvent but commercially insolvent.
  • A letter of guarantee in terms of application to the Bank was made in the amount of 700 million rand. It was to ensure that SAPO is deemed to be a going concern.
  • The current overdraft limit of SAPO is R 50 million. The bank requires some form of collateral. The bank has rectified the position of freezing the bank account of SAPO and it was able to collect monies to ensure the settlement of accounts. Detailed copies of the financial statements was requested by the Committee.
  • SAPO has failed to generate enough cash to fund itself.  
  • Property rental and transport costs will feature in the new implementation plan.  
  • Management admitted to the loss of trust of customers and noted that huge effort is being made to regain the trust of customers.
  • In respect of feedback on issues discussed at a committee meeting in Parliament on 31 October 2014, it was noted that the industrial action was based on a labour model used by labour brokers to employ casual workers. The agreements entered into by SAPO with unions was difficult as the three unions could not agree with each other. A Leadership Forum was set up to address the specific issues stated above. The environment is very hostile and the unions have failed to form part of the above structure.
  • Acts of intimidation and malicious damage to property has been reported and certain employees are still not back at work.
  • At this stage, every effort is being made to normalise the situation with intervention programmes being undertaken to address the medical and emotional needs of employees affected by the strike.
  • The new agreement is a phased agreement and has been costed at R15 million rand effective from 1 December 2014. However, employees will only benefit financially from April 2015. Improvement with key stake holders will be addressed.
  • Suppliers have not been paid since April 2014.
  • Future costing strategies will focus on three areas, namely employee costs, transport costs and property costs. Underutilisation of property portfolio will be addressed. The current Ecopoint building is leased for ten years and the lease indicates that SAPO must leave the building in its original form. Should the contract be terminated, penalties will be evident. The current lease payment is at R 2, 5 million a month subject to annual escalations until April 2020.
  • The underperformance of the e-business facilities is a major concern and unless action is taken, other business will capitalise on this.


  1.  Responses FROM MANAGEMENT of SAPO
  • The courier business needs to be structured properly to ensure an increase in profit. This will be included in new business model. Management is waiting on Treasury to give the go ahead in terms of the new business model.
  • SAPO still awaits news in respect of the review of its license in respect of exclusivity provisions.
  • The new model submitted to Treasury has indicated a need for restructuring which may result in job losses.
  • The Chief Executive Officer has been charged and an external investigator has been appointed by the Board.
  • Krugersdorp and the Polokwane employees did not return to work. Some employees physically appeared at work but did not tender their services. As a result, disciplinary measures have been considered by management.
  • The current spin off of the strike is that some employees have indicated that they will not return to work and would prefer to be paid out their pension monies.
  • Issues of pension fund reserves has to be revisited.
  • Lack of evidence from employees and management has not been able to convince employees to provide any leads in respect of intimidation claims. The hotline, erected to report issues of intimidation has been unsuccessful.
  • Consequence management would need to be improved to regain the trust of employees.
  • In respect of the matter of intimidation of the woman in Bloemfontein it was noted that eight suspects have been arrested. The suspects have returned to work. Final notice of suspension will be issued. Management is not aware of a video circulating in this regard. A formal comprehensive report on this issue will be presented to the Committee.
  • Management will identify all properties and draft a comprehensive list of such properties which could be used to accumulate monies.
  • Management not aware of the issue of the pregnant casual worker in Free State and noted that this is not behaviour that would be condoned.
  • Communication issues will be addressed between management and staff.
  • The capacity and capability of SAPO to conduct the new turnaround strategy was discussed. SAPO is constrained in terms of the finalisation of the new strategy by the end December 2015. Management noted that it would therefore need to implement the use of a consultancy company to facilitate this process, as there are certain areas that management expertise is lacking. The Committee cautioned against the use of consultants as it creates an impression that there is a lack of confidence in management. The Committee was of the opinion that such a situation is therefore not reassuring and requested that management revises this strategy.
  • The Committee indicated that there is a lot that still needs to be done and that compliance with its licence requirements has to be addressed.
  • The Committee has scheduled a meeting with SAPO on 17 February 2015 to engage on the progress made by SAPO to date.


Day Two; 25 November 2014 Visit to Telkom and SITA


  1. Meeting with Management of Telkom

The Committee met with a management team from Telkom and noted that the discussion around issues of Broadband connectivity is important so as to identify the role of the various role players in the telecommunications industry. One of the key priorities for the Committee would be the South Africa Connect (SA Connect) policy, which will ensure the connection of schools, clinics, libraries and other governments departments. The access to information by rural communities is also considered a priority area, which would have to be addressed in respect of Broadband connectivity.

In addition, Telkom is 130 years old and has the expertise in the telecoms sector that has given rise to the mobile phone and it has the largest fixed line network in the country. The Committee indicated that Chapter 4 of the National Development Plan enjoins all stakeholders to the achieved 100 per cent broadband penetration by 2030. The post 2015 MDGs relate to sustainable development whose goal 7 has a direct reference to telecommunications services. The vision of the Committee is to the realisation of the SA Connect Broadband policy in all public institutions such as hospitals, clinics, police stations. Telkom has a role to play with its extensive network and years of expertise. The Committee is concerned about the state of network availability, which has moved beyond 3G to LTE concentrated in the golden triangle of the country (Cape Town, Durban and Johannesburg), leaving the majority of the rural areas, stuck on 2G whilst there are still  other areas without any coverage.


The Committee noted that Telkom indicated that as part of school’s connectivity, it had connected over 1650 schools. Whilst this must be commended, the Committee was concerned that it was exactly the same number that the Department has been reporting as its own achievement;


The management team of Telkom made formal presentations to the Committee on the following topics:

  1. Status of Transferring Telecommunications Museum, Artefacts Housed at Telkom

Section 72(3) of the Electronic Communication Act, No 36 of 2005 provides for the transfer of ownership of historical artefacts to a museum to be established and managed by the Director General. These artefacts are intended to form part of the Telecommunications Museum. The process to transfer these artefacts to the Department began years back, but has been delayed by the change in leadership in the Department. In 2014, the Department announced the intention to establish a Telecommunications Museum as part of celebrating twenty years of democracy in South Africa. The Military Museum in Johannesburg has been identified as the temporary site for Museum.

The launch of the Museum was supposed to take place in September 2014. The Department noted that there has been difficulty to find a suitable building for housing these artefacts. The Deputy- Director General assured the Committee that he will prioritise this issue and indicated that the challenge in housing the museum was due to the need for procuring a building. The required equipment to establish the Museum is available. The Department has undertaken to complete the project by the end of March 2015.

The Committee determined that effect has to be given to the requirement of legislation to complete the Museum.   

  1. Implications of outdated Universal Service Obligations (USO) to Telkom

The regulatory framework in terms of Clause 4 of the ECNS license provides that “the licensee shall continue to maintain previously implemented USOs until reviewed by the Authority. “

Telkom informed the Committee that its obligations have not been reviewed. It contended that USOs should be applied uniformly across all operator classes to ensure non-discriminatory treatment and reflect equity across each organisation. 

In March 2011, Telkom sought the permission from ICASA to reduce unprofitable payphones. ICASA declined this process. In March 2014, ICASA only reviewed the obligations attached to ECNS licensees holding 1800MHz spectrum, excluding Telkom. The obligations include maintenance of 120 000 public payphones with only 2000 of these phones being profitable. The losses incurred in respect of the pay phone business was presented to the Committee. Telkom argued that the burden experienced from a cost perspective, needs to be addressed. Further, that clear direction is needed for a review and amendment of Telkom’s current obligations, USOs should be determined using globally accepted principles of competition, transparency, non-discrimination and neutrality and regulations should disclose the social needs gap.

Public Finance Management Act and Strategic Issues

Telkom adheres to the Companies Act and other financial laws and regulations as well as the PFMA.This has negative, unintended consequences as it forces the company to be transparent even on strategic issues, which allows its competitors to gain ground on Telkom’s future plans


A request was made for the list of pay phones allocated to social institutions and the functionality of such phones.   

The Committee noted that the issue of review of pay phones needs to be addressed but that these phones are however still needed, especially in rural areas. Concerns of vandalism was raised.

(c) Role of Telkom in South Africa Connect (SA Connect) and the National Development Plan (NDP)

Telkom has engaged in transformation in terms of Government’s 2030 vision to reduce inequality, poverty, create jobs, and grow the economy amongst others.

Broadband has been identified as a pillar to obtain these objectives.   The roll out of Broadband is subject to the following considerations:

  • Broadband is capital intensive and requires huge amounts of capital
  • Recovery of investments must be secured
  • Geographical and other challenges eg population is dispersed, weather, cable theft etc.
  • It is uneconomical to roll-out in certain areas. This requires cross-subsidisation
  • Broadband roll out requires a combination of technologies and spectrum is key

Our national efforts on broadband has however, resulted in inefficiencies as duplication is rife between competitors. The Consolidation of Broadband networks and funding will result in improved effectivesness. The issue of wholesale and retail separation is interlinked with Broadband access.

Lessons learnt from other international countries

  • Increasing broadband penetration requires targeted intervention
  • A holistic broadband eco-system must be developed
  • Governments are not well placed to do national broadband on their own
  • Ubiquitous broadband roll out requires national funding
  • Government’s fragmented approach results in inefficiencies
  • Need scale to deliver on national broadband
  • Use a combination of technologies to optimise costs and speed up delivery
  • A supportive regulatory framework is required

Telkom proposes the need for a National Broadband Champion, coordination and alignment of policy and regulatory framework. Telkom is proposing spectrum allocation, separation or open access model, coordination of network efforts of government entities.

The Committee noted that the mandate of government is to drive Broadband in rural areas. A need for the formulation of policy to establish National Broadband Champion was required.

Telkom’s role in the South African economy includes the following:

  • Telkom underpins Government Operations
  • Telkom underpins the private Sector
  • Leading provider of broadband services
  • It is the leading operator in the ICT industry

The Committee was informed that Telkom is well placed to be part of the National Broadband Network (NBN) for the following reasons:

  • Existing infrastructure which would ensure that NBN is faster, less complex and less risky.
  • New IP network has national reach and connectivity.
  • Proven capability on national projects
  • It is South Africa (SA) owned and managed. Profits and returns are retained in SA.

Telkom is supportive of Government’s 2020 vision to provide 100% broadband access and to increase jobs. It has the largest fibre footprint and is leading the fibre network roll out. Telkom has 13 000 technicians that can implement roll out effectively. Telkom proposes to partner with Government to balance private interest with the country’s national and public interest.  

The Committee noted that the cost effectiveness of proposed plans and the sustainability of jobs emanating from such plans, needs to be addressed. The main issue for the Committee to consider is what needs to be achieved in terms of Broadband roll out and who is the best stakeholder for the job


Telkom also raised the issue that due to the finding of Competition Commission and its own internal process, it was in the process of separating the wholesale and retail side of Telkom business. Further discussion on Telkom retail and wholesale is critical. The Department has a role to play in providing leadership as state owned companies, such as Telkom, are not clear in respect of the definition and functioning of its role. A need for an international overview and perspective to determine the implemented process used in respect of Broadband would be required. The Department noted that Malaysia has taken a lead in regard to Broadband roll out.  

The Group CEO indicated that policy considerations, self-regulation, restoration of balance, Public Finance Management Act (PFMA) regulations and restrictions, spectrum separation, spectrum capacity, the need for balance in market structure, reinvention of Telkom, improvement of customer services, performance management agreements to be signed by all employees, efficiency of Telkom, amongst others are the focus areas that currently has to be addressed by Telkom.




(d) High Demand Spectrum: the importance for Broadband

The perception of an abundance of spectrum exists and provides an optimum between capacity and range. The importance of high demand spectrum includes the following:

  • It is a scarce resource
  • Spectrum is a national resource
  • Different spectrum bands result in different cost structures as it impacts on the number of base stations/towers required.
  • Spectrum assignment has a direct relationship with the cost to communicate
  • The right spectrum is essential to reach underserviced areas

 All national operators require access to both low and high frequencies to satisfy coverage and capacity requirements. Telkom is the only mobile operator without access to sub 1 GHz spectrum, which is the most suitable to address coverage challenges in the rural areas. This makes it difficult to compete with the dominant mobile operators.

The Committee was requested to exercise proactive oversight and ensure that the playing field is level that an adequate policy framework based on sound economics is in place, the licensing philosophy and process is consistent with other complementary national policy objectives and that ICASA has the capacity, skills and expertise to execute this mandate.

The Committee noted that there is a duty on government to create an environment conducive to competition. The Committee will engage in further discussion in this regard with all role players. The Committee further noted that the sharing of infrastructure is very important and an environment should be created to allow for operators and service providers to compete for quality and affordability of services. Dominant networks should allow for open access to ensure more competition. An intervention by government required to ensure a balance of roll out in rural areas.

(e) Local Loop Unbundling (LLU): what options?

Governments in all countries where unbundling has taken place have had to invest in fibre based broadband access networks.

  • There has to be new research conducted by the regulator the new envision market structure in the ICT sector;
  • Telkom Mobile was launched in 2012, and it has not yet recovered the amount initially invested in infrastructure while MTN and Vodacom had 10 years to ensure a return on financial investment;
  • Completion in the sector varies such as 4 in developed countries, whilst there are 4 in developing countries:
  • Any method of allocating the digital dividend by ICASA , whether through auction or by way of any other option must be aligned to SA Connect Policy;
  • Government must pronounce on who should run broadband in the public interest;
  • The Department must provide clear leadership on role clarification, who should run what element of the broadband value chain between operators and its various entities;
  • Telkom favours an open access model in the broadband environment;

Local Loop Unbundling and Telkom

  • LLU was based on Professor Martin Caves theory of ‘ ladder of investment theory ‘ that new entrants will start by taking the ‘capital light’ however, many empirical research has proven to disfavour this theory on the basis of facts;
  • Since the year 2007, when the first policy directive was issued by the Department; there has not been any movement except the issue of Noetel vs Telkom which is before the Court.


LLU is still relevant and current and in urban areas, multiple operators have been rolling out fibre and deploying various technologies as an alternative to Telkom’s local loop. The key issue is connectivity and coverage in the rural and outlying areas.

The following issues were highlighted by Telkom in respect of LLU:

  • Telkom supports infrastructure sharing and optimal deployment of scarce resources.
  • LLU should be aligned with SA Connect, the allocation of high demand spectrum.
  • Telkom is embarking on an ambitious wholesale strategy, having separated the retail and wholesale business from April 2004.
  • The wholesale strategy of Telkom is intended to intensify competition for retail business.
  • The implementation of LLU would imply that Telkom would have to halt the roll out of network modernisation and upgrading programme
  • The unbundling will significantly divert Telkom’s retail revenues which will not be compensated by any resultant wholesale revenues.
  • Telkom will be obliged to incur enormous costs to alter or reconfigure its network
  • Renowned international scholars have cast doubt on the potential benefits of LLU.


The Committee noted that the responsibility of LLU should be clear and defined and that the announcement of a Local Loop Strategy in line with the NDP will emphasise the extent of investment in local loop.

(f)  Presentation and tour on the National Network Operations Centre (NNOC)

NNOC was officially opened in April 2000 and developed the highest level of technical skills across the domain. The fixed line network footprint of Telkom is the largest footprint in South Africa, in the extent of more than 147,00km fibre.  Regional and National networks are resilient and manageable. Telkom also has a global reach connecting customers to the world.

The Committee conducted an onsite visit of the NNOC and was informed that it is responsible for fault management, configuration management, emergency failures, surveillance and monitoring of major disasters amongst others. The NNOC is mandated to take overall control in the event of fault or emergency failures.


  1. Meeting with employees of State Information Technology Agency (SITA)

The Committee met with employees of SITA.  Employees were given an opportunity to express their views anonymously, in writing, should they not feel free to express their views in the meeting.

 The following issues were highlighted by employees of SITA:

  • Performance bonuses were not paid although employees have performed according to their performance assessment contracts. Minister Sisulu assured staff that performance bonuses would be paid but this was not done.
  • Employees not clear about the policies of SITA.
  • Clarity in respect of the functioning of the Employment Equity Forum was requested.
  • Remuneration policy constructed in a restrictive manner to favour the employer. High goals are set for employees to achieve that are often not achievable.
  • The frequent changes made to the top management structures, including the change of the CEO positions at SITA, were concerning to members. The company has become an embarrassment with 17 CEOs in its 15 years of existence which has caused instability.
  • There are allegations that even the incumbent Mr Norman Nomvalo is going to leave SITA soon and employees are concerned. This was said to be corridor rumours.
  • Lack of accountability of management, accusations of nepotism, victimisation of staff were also of concern.
  • The restructuring of staff which implied that employees had to apply for their own jobs, were highlighted.
  •  It was suggested that workplace forums be constructed to engage and disseminate information to every employee.
  • Sustainability of leadership and succession planning needed.
  • Employee appointments made on one level and paid on a lower salary level.
  • Succession planning of staff and possibilities of promotion is lacking.
  • Lack of implementation of turnaround strategy and lack of consequence for management needs to be addressed.
  • Lack of proper financial management in SITA with losses experienced in respect of income was highlighted.
  • Lack of trust and a belief that one has to be close to management in order to succeed.
  • The systems in place are not working and an example of the shutdown of Home Affairs offices for a period of ten days have been noted.
  • No payment received from April 2014 to date from the South African Police Services (SAPS) which is the biggest client of SITA.
  • SITA has invested in bursaries but no development programme in place, in terms of promotions for staff. Many employees feel that while SITA pays for their training and academic qualification but they still underutilised by the same company.
  • There are allegations that SITA’s services providers are dictating which employee must be appointed by SITA and to which project.
  • Staff placed in a pool and were allowed to apply for their positions. Some staff did not receive the positions they previously occupied and no explanation was given.
  • Outdated infrastructure and the late payment of salaries were also highlighted.
  • Managers do not sign cases on time, when employee request why they do not do it as it affects their work but management become very rude saying they have more important things to do;
  • Salary increment are paid in October when they are supposed to be starting on the

1 April;

  • SITA held a similar session with the Portfolio Committee on Public Service but nothing good came out of it and therefore the Committee is requested to do something about what the employees have raised with them;
  • The Company has a 5 year corporate plan but executive management are given 3 year contracts;
  • There are high level of distrust between management and employees;
  • Internal ICT infrastructure is not working at SITA,  e-mails are not working at the company;
  • There are no policies at SITA. All policies that were reviewed were only approved by the Board on the morning of the Committee oversight;
  • Employees including senior officials are appointed to positions without following proper procedures and in many instances, employees are appointed in positions that falls outside the organisational structure.


The Chairperson noted that the employer has a duty to inform employees on all policy issues affecting them. The above issues will be presented to management and will be addressed. Management will be given time to respond to the issues and further engagement on the matter will be received.  The Act that governs SITA is outdated. There would be implications for SITA now that it has moved to under DTPS. The need to clarify the role of each entity. SITA is the driver of SA Connect for ICT in all Departments. Therefore, should government use another service provider, they would have to account for it.


  1. Meeting with management of SITA

The Committee met with the management of SITA. The following issues were highlighted by the management of SITA.

  • Instability in the organisation in terms of change in leadership as well as change in general management. The fact that SITA has had 17 CEOs in the past 15 years was highlighted.
  • The fact that the SITA Act is outdated was noted. It was suggested that a task team be established to address the issue and facilitate amendments to the Act.
  • The misuse of personal information which implies that systems are not tamper proof, was reported. A concern that personal information is used wrongly when managers sign security clearance forms, was raised.
  • The decisions made by previous management structure still has an effect in the current environment.
  • A concern was raised in respect of the fact that the CEO’s contract ends at the end of December 2014 and there has been no indication of renewal as yet or a process in place to appoint the CEO by the Board.

The Act that governs SITA is more than ten years old and therefore, outdated. Amendments will be effected in 2015, subject to the legislative cycles in Parliament. The relevant amendments will ensure that SITA operates in line with current legislative requirements. The Committee noted that it does not have any authority in respect of the appointment of the CEO, but may merely determine if a fair process has been followed. The Committee has been assured by the Chairperson of the Board that the position of the CEO will be addressed during a future briefing to the Committee. The culture of communication is a team building effort and needs to be defined by management. Issues of misuse of personal information of employees and victimisation is of concern to the Committee.

The issues raised by staff, in item 8 above, was put to the management of SITA.

Management responded to the issues raised as follows:

  • The structure of the current policy in respect of performance bonuses is not helpful and would have to be addressed.
  • Performance targets have been revised and submitted to the Board.
  • The issue of tariffs was raised with the Minister and submissions made to the Board.
  • SAPS has the biggest contract in the amount of R 960 million. Service level agreements have not been signed. The failure in this regard rests in part with the Department and SITA. Service agreements will be signed before the beginning of the next financial year.
  • Management admitted that projects had collapsed. To address this issue, the executive have been requested to report to the Board, on a weekly basis, on all projects they are working on.
  • The policy regime of HR management has changed in the last few months. Management has submitted revised versions of HR policies.  Some policies were approved by the Board recently, example, the talent management strategy policy. An extensive exercise has been performed over the past few months to address all policy issues.
  • Employees have been requested to submit their submissions in respect of incorrect payments made to staff. This process will be given further attention.
  • Ad hoc consultation sessions, between union and management, in signing the collective agreement will be formalised at a formal sitting of that forum by the following week.
  • A placement Committee was established to finalise the placement of all employees in the pool.
  • The culture of the institution will take time to change but progress has been made in this regard.
  • Management acknowledged the issue of IT that is not stable and noted that they will be working to ensure that the issue is resolved in the next few months.  
  • The Home Affairs network was down as result of power outage problems. The network needs to be updated in future.
  • Management acknowledged that they have a task in ensuring that all policies needs to be communicated to staff. Screens have been erected in SITA offices to ensure staff is aware of policies. However, further engagement with staff is necessary.
  • The issues of historical stability of the organisation affects the policy of the current institution.
  •  A need to create an environment where management is from the bottom up needs to be created.
  • The issues pertaining to the remaining 142 employees in the pool will be addressed by the end of the week.


  1. Site Visit to SITA Data Centre

The Committee conducted an onsite tour of the SITA Data Centre in Centurion.  The Data Centre stores core business and operational data for industry.

The Data Centre ensures that data is held safely, securely, and in a reliable manner and can be recovered quickly should disaster strike. The primary focus of the Data Centre is improving data safety and reliability. The Data Centre offers storage and server solutions, provides a high level of support, prevent disaster and implement corrective action. It also rapidly recovers critical systems and infrastructure.









Day three: 26 November 2014:  KwaZulu-Natal Part of the Oversight: Visit to Colab and USAASA’s Msinga Project


  1. Meeting WITH Ikamva CoLab at Durban University of Technology

The Committee met with Professor Bawa, the vice chancellor of the Durban University of Technology (DUT) and senior officials, who gave the Committee a brief overview of DUT and its collaboration with Ikamva. He stated that DUT was approached by the Department of Communications (DOC) to establish an Ikamva Colab, with the intention to address the shortage of ICT skills and competencies (e-Skills), especially amongst the youth workforce and individuals in rural settings. The challenge was to address the issues of inequality, poverty and unemployment by creating a knowledge based society which seeks to leverage several opportunities provided by the emerging information society and knowledge economy.

Ikamva National e-Skills Institute (iNeSI) leads in the creation of key e-skills development strategies, solutions and practises within South Africa (SA).  It is a national catalyst, collaborator, facilitator and responsive change agent in the development of SA. This is done within the context of national goals and within a worldwide evolving information and knowledge based environment. The intention is to benefit the total population by harnessing ICT for equitable prosperity and global competitiveness. The focus areas of iNeSI in respect of e-skills knowledge are as follows:

  • coordination of research and development
  • develop and modify curriculum, training and education
  • e-skills interventions, identifying gaps, promoting innovation and building capacity e-skills
  • impacts on innovation and sustainability
  • develop new approaches
  • coordinate stakeholder collaboration across government, business, civil society and global development agencies.

The e-skills knowledge CoLabs, such as DUT, are the iNeSI presence at a provincial level, coordinating e-skills intervention, developing e-skills curriculum, promoting innovation and building capacity in terms of the e-skills research agenda.

A further responsibility of DUT is to train the teachers so as to ensure that e-skills learning are effective. DUT encourages the production of research which allow students to create a strong knowledge base in future. The academics involved at DUT are from various universities and work locally and globally. DUT participates in continuous exchange programmes with other countries to exchange ideas.

The Committee noted that post 2015, the development goals of government is to assist and build the economy via the development of skills. The vision of DUT is in line with the vision and policies of government. Skills development is important in the growth of the economy and a need to ensure representivity in the sector was highlighted. The Committee noted that it was comforting to see the vision of the leadership at DUT.

The Committee thereafter conducted an onsite visit to the Colab and was exposed to the following areas:

  • Thematic Lab – deals with innovation in respect of instruments dealing with the authentication of certificates and 3D printer technology.
  • Online Courses – in partnership with Metropolitan, a project was implemented to load texbooks online. DUT facilitates the supervision of students and the training of lectures in this project.
  • Robotics Demonstration- a lego robotics project facilitates in changing the learning environment to a more interactive process with students.
  • Other projects include the Sebenza Portal project, Taggit project and Interactive courses (e-voting, safe internet for parents, e-mail etiquette).  


  1.  Site Visit of USAASA in Umsinga  

The Committee conducted an onsite visit to the Bhambatha Secondary School, in Umsinga which is one of four projects undertaken by USAASA in terms of its mandate on Broadband Connectivity.   The Committee met with representatives from USAASA, parents, teachers and learners of Bhambatha Secondary School, principals of other schools participating in the project, members of the Local Business Chambers amongst others. The inspection covered an explanation of connectivity with the school, the challenges and benefits experienced in respect of Broadband Connectivity and other issues.

The Committee was informed that USAASA has experienced challenges in respect of Broadband Connectivity in Umsinga, as it is one of the most underserviced and mountainous areas. USAASA in collaboration with MTN connected four schools projects with the aim of creating an e-learning environment. A public process was undertaken before the implementation of the projects. The participants, which are the matriculants at the school, were provided with smartphones and normal cell phones with designated airtime granted for data. Connectivity is paid by USAASA for a period of two years. In addition, 10 iPads were provided to teachers in order to facilitate teaching.  The participants will use the smartphones at school and store it in the school’s safe at the end of the day. They will then use the normal cell phones to complete assignments at home. Designated participants and parents related their experiences in respect of the benefits achieved in terms of Broadband access which included accessibility to information, improve research and learning abilities, improvement of results, confidence reinforced in participants in their ability to learn, amongst others. Some of the challenges experienced by participants included the inability to charge phones at home due to electricity supply constraints and a lack of connectivity in certain parts of Umsinga where some participants live. A close working relationship with the local business sector was also established to determine a solution for mobile banking and ensure accessibility in Umsinga.


  • The Committee observed that USAASA connectivity and tablets was only limited to 2 years after which the department of Basic Education and or school must purchase own equipment and the bill for connectivity;
  • ICASA has committed to produce the coverage map of uMsinga on 04 December 2014;
  • One of the six students in the traditional leadership was going to undertake training paid for by MTN;
  • The USAASA gadgets was initially supposed to arrive at the schools in August, but it only arrived 3 days before the start of the exams;
  • There was no uniformity on gadgets given to schools, some schools did not have ‘the usher gadgets that other schools had;
  • The availability of broadband makes it easier for schools to conduct their learning and consult each other on a particular subject.


Thereafter the Committee conducted a site visit to the Ethembeni Clinic in Umsinga where USAASA has provided Broadband connectivity. The Clinic has 5 wireless computers connected to a main server to allow for internet and intranet access. This has ensured that the communication between district clinics have been made easier. Projects such as Mom Connect have been implemented to assist pregnant women and encourage healthier lifestyles by sending reminders to the cell phones of patients in respect of future appointments and other general information.  A NHI pilot project will be rolled out shortly to ensure that records of patients can be tracked by other clinics. The software in this regard has not been loaded as yet, however, data capturers are in the process of being trained.  There was a concern relating to the connection between the clinic and the hospital to provide for much connectivity. It was highlighted that this was due to SITA not responding.




18.1.1. In respect of Sentech the following key findings were noted:

  • In respect of Sentech, the Committee is satisfied with the clean audit received in two consecutive years as it has shown that Sentech has the capacity to generate income.
  • The Committee requested the following policies namely, Engagement plan, Developmental plan, the Turnaround Strategy and the Employment Equity plan for further perusal and scrutiny. These documents are to be sent to the Committee within the same week.
  • The Committee noted that its role is one of observation and that the management of Sentech have been in operation for more than four years, which means that the issues raised by staff are therefore not new to them. These issues should therefore be given due consideration.


18.1.2. In respect of SAPO the following key findings were noted:

  • The Committee noted with concern that the video link in Witpos allowed for the interaction with management and not workers as intended by the Committee. Workers in Witpos were therefore left out of the interaction with the Committee.
  • The Committee noted that the tarnished image of SAPO was acknowledged by both employees and management.
  • The Committee requested employees to take responsibility for their actions and go back to work.
  • The salaries of employees are not paid on time and at the time of the oversight visit employees did not receive their monthly payment as yet.
  • The payment of salaries will not be implemented in the instance of an unprotected strike.
  • The financial position of SAPO was of great concern to employees as SAPO was not able to produce a profit.
  • SAPO has the potential of being declared a preferred provider if it is able to improve its current financial position.
  • Privatisation of SAPO is not to be considered as it still has an important role to play.
  • The Committee noted that a bail out is not feasible as SAPO is required to be self-sufficient and it therefore cannot recommend that monies be given to an institution that shows signs that it will waste such monies.
  • SAPO has been involved in a dispute with 65 of its managers since 2011 which formed part of a Special Investigating Unit (SIU) investigations.
  • The financial systems of SAPO are weak to non-existent.
  • The Committee indicated that the observations made from its engagement with staff created an impression that there was panic on the part of staff in respect of jobs and salaries.
  • The Committee observed that management failed to implement the agreements signed with unions in April 2014 and observed that clarity in respect of the implementation of new agreements was needed. Concern was expressed as to how these agreements would markedly differ from the previous agreements.
  • The Committee observed that the Group Chief Executive Officer has been charged and that an external investigator has been appointed by the Board.
  • The Committee noted that trustworthy information from management was lacking and added that management has a responsibility to ensure that trust is earned.
  • The Committee cautioned against the use of consultants in respect of the new turnaround strategy of SAPO and noted that it indicates a lack of confidence in management especially in light of its financial situation.
  • The Committee noted that compliance in respect of the licence of SAPO needs to be addressed.
  • The Committee observed some of the information shared by SAPO was not what it was told during a Committee meeting with the entity, it recommended that the secretary should get record of what SAPO said in Parliament during the meeting of 31 October 2014.


18.1.3. In respect of Telkom the following key findings were noted:

  • The Committee noted that there has been difficulty on the side of the Department to find a suitable building to house artefacts as per its legislative mandate in respect of section 72(3) of the Electronic Communication Act, No 36 of 2005 which provides for the transfer of ownership of historical artefacts to a museum to be established and managed by the Director General.
  • The USOs of Telkom in respect of public payphone services was noted, however, the Committee observed that these phone services are however still needed, especially in rural areas.
  • The Committee noted that the cost effectiveness of proposed plans and the sustainability of jobs emanating from such plans, need to be addressed.
  • The main issue for the Committee to consider is what needs to be achieved in terms of Broadband roll out and who is the best stakeholder for the job.
  • A need for an international overview and perspective to determine best practise in terms of successful broadband roll out is necessary. The Department noted that Malaysia has taken a lead in regard to successful Broadband roll out. 
  • The Committee noted that there is a duty on government to create an environment conducive to competition.
  • The Committee noted that the responsibility of LLU should be clear and defined and that the announcement of a Local Loop Unbundling Strategy in line with the NDP will emphasise the extent of investment in local loop.


18.1.4. In respect of SITA the following key findings were noted:

  • The Committee noted that the employer has a duty to inform employees on all policy issues affecting them.
  • SITA would be subjected to policy, legal and other ICT regulations in the sector since it was now an entity reporting to the Department of Telecommunications and Postal Services.
  •  SITA is the main driver of e-government for most Departments. 
  • The Committee noted that it does not have any authority in respect of the appointment of the CEO, but may merely determine if a fair process has been followed.
  • Issues such as the misuse of personal information of employees and victimisation is of concern to the Committee


18.1.5. In respect of the Ikamva CoLab at DUT the following key findings were noted:

  • The Committee was satisfied that the vision of DUT is in line with the vision and policies of government.

181.6. In respect of the Site Visit of USAASA in Umsinga the following key findings were noted:

  • The collaboration between USAASA and MTN has facilitated an environment of e-learning.
  • Monitoring the use of undesirable sites by learners has been restricted with the assistance of MTN.
  • Connectivity in respect of data has been paid by USAASA for a period of two years. 



19.1.1. In respect of Sentech the Committee recommends:  

  • Human Resource issues highlighted by employees of Sentech must be addressed by management to ensure that management is operating within the framework of the law. 
  • After perusal and scrutiny of the various policies requested from Sentech, the Committee will schedule a follow up visit to ensure that the outstanding HR issues are resolved.
  • Management to take cognisance of the fact that certain groups of staff do not belong to unions and should try to reach out to all staff and build a team.
  • The recognition of SAQA qualifications is a simple matter that needs to be addressed.
  •  Change management processes are important and would have to be addressed urgently.
  • The Committee undertook to forward all anonymous submissions to the Chief Executive Officer in order to facilitate better future communication amongst staff and management.
  • The Committee has been requested to conduct an audit into whether some of the recipients of the bonuses signed performance agreements;
  • Some of the issues raised by the employees will be elevated to the Board by the Committee
  • The Committee to follow up  on the analogue assets disposal to ensure compliance with environmental laws and health laws and regulations;
  • The Committee will request a written action plan with timeframes from SENTECH and ICASA for the poor signal of Power FM;
  • The Committee should request a clearly defined strategy on how SENTECH plans to deal with energy saving measures in future and projected monthly savings which SENTECH will be paying Eskom in the new plan


19.1.2. In respect of SAPO the Committee recommends:

  • The Committee requested formal documents from employees which will result in a further investigation to be conducted in respect of some of the issues emanating therefrom.
  • The reported matter of a woman who was stripped naked by fellow colleagues at the Bloemfontein Centre, with no resultant consequences for their actions, will be taken up with the Human Rights Commission with the aim to ensure accountability for all involved. . A formal comprehensive report on this issue will be presented to the Committee.
  • A follow up by the Committee will be made in respect of the ongoing SIU investigation on the involvement of 65 managers in a dispute since 2011.
  • The Minister is to deal with the suspension of the Group Chief Executive Officer.
  • The Committee requested SAPO to provide a detailed report in respect of its financial statements, a copy of the new turnaround strategy plan, for perusal and further analysis.
  • The Committee recommended that the salaries of staff is to be paid with immediate effect. Management guaranteed that payment of salaries will be made the following day.
  • The Committee requested copies of the new restructuring model which may result in job losses, for perusal and further analysis
  • Management to identify all properties and draft a comprehensive list of such properties which will be submitted to the Committee.
  •  Committee recommended that SAPO should have resolved most if not all of the issues identified in the oversight by the time it appears before it on a meeting will be scheduled for 17 February 2015
  • The Committee will exercise stringent oversight over SAPO until it is satisfied that the company is in the right direction;
  • The Committee requested the name of the supervisor who refused employees to join the meeting and request management to furnish with the report of the appropriate actions management had taken on the supervisor;




19.1.3. In respect of Telkom the Committee recommends:

  • To undertake an oversight visit to the Telkom rural project in schools in March 2015 so as to determine how technology has evolved in respect of Broadband connectivity.
  • That effect has to be given to the legislative requirement to complete the Telecommunications Museum by the Department.  
  • That Telkom should provide a list of pay phones allocated to social institutions and indicate the functionality of such phones to the Committee.  
  • That the issue of review of the USOs of Telkom would need to be addressed with ICASA in future.
  • That there is a need for the formulation of policy to establish a National Broadband Champion since it was the mandate of government to drive broadband rollout in rural areas.
  • Further discussion on Telkom’s retail and wholesale separation with timeframes is critical.
  • The Department has a role to play in providing leadership as state owned companies, such as Telkom, are not clear in respect of the definition and functioning of its role.
  • A need for an international overview and perspective to determine the implementation process used in other countries such as Malaysia would be required.  
  • The Committee noted that the sharing of infrastructure is an important factor to consider and an environment should be created to allow for operators and service providers to compete for quality and affordability of services.
  • Dominant networks should allow for open access to ensure more competition.
  • An intervention by government is required to ensure a balance of roll out of Broadband in rural areas.
  • The Committee request a breakdown report of the schools connected by the Department as indicated in the 2013/14 Annual Report given the new information by Telkom. In addition, where the Department has not connected, such misleading information on its Annual Report must be fixed through a report indicating if such a ‘omission’ was committed by the Department.
  • The Committee reiterated its call for the speedily implementation of the ECA in relation to the establishment of the 112 Emergency Call Centre.
  • The Committee resolved that it would be visiting countries who have been successful in managing the broadband project in order to give invaluable input and have an object view of broadband best practice.
  • The Committee was concerned that even though operators make profit, they still do not invest adequately in network infrastructure in rural areas.
  • The Committee recommends that there should be a policy directive and subsequent regulation on the adequate market structure before the licencing of High Demand Spectrum.


19.1.4. In respect of SITA the Committee recommends:

  • The Act that governs SITA is more than ten years old and therefore, outdated. Amendments will be effected in 2015, subject to the legislative cycles in Parliament. The relevant amendments will ensure that SITA operates in line with current legislative requirements.
  • The culture of communication is a team building effort and needs to be defined by management.
  • A follow up meeting on the issues of proper communication with workers, finalisation of outstanding policy issues, and the issue of clearances should be noted.
  • The Committee request a report and action with timelines by the Department on the commitment made by the then Minister Sisulu to employees.
  • The Committee recommends that SITA amend what appears to be an outdated policy in order to be in line with the ECA and the SA Connect Policy; in this regard the Committee wants a full review, not just technical amendments.

19.1.5. In respect of the Ikamva CoLab at DUT the Committee recommends:

  • Ikamva, via DUT was requested to look at the demographics within which it operates and to ensure equal representivity in the sector was addressed.

19.1.6. In respect of the Site Visit of USAASA in Umsinga the Committee recommends

  • The Committee proposed that the next project to be implemented should be DBE Icloud to ensure that learners have access to tutorials done in class.


  1. Paragraph explaining the last 2 days of the visit

Whilst on oversight, the Parliamentary programme changed and members were requested by the House Chairperson to return to Parliament. The Committee therefore cancelled the last two days of the intended oversight visit.


Report to be considered.



[1] Dutta, S. Mia, I.(2007) Connecting the World to the Networked Economy: A Progress Report based don the findings of the Networked Readiness Index 2006 0, the Global Information and Communication Technology Report


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