ATC210526: Report of the Select Committee on Public Enterprises and Communication on Budget Vote 30: Communications and Digital Technologies, and the Annual Performance Plan and Strategic Plan for 2021/22 of the Department of Communications and Digital Technologies, dated 26 May 2021

NCOP Public Enterprises and Communication

Report of the Select Committee on Public Enterprises and Communication on Budget Vote 30: Communications and Digital Technologies, and the Annual Performance Plan and Strategic Plan for 2021/22 of the Department of Communications and Digital Technologies, dated 26 May 2021

 

The Select Committee on Public Enterprises and Communication (Select Committee), having received a briefing from the Department of Communications and Digital Technologies on Budget Vote 30: Communications and Digital Technologies and on its Strategic Plan and Annual Performance Plan, reports as follows:

 

1.      Introduction

 

The Select Committee, considered Budget Vote 30, the Annual Performance Plan and the Strategic Plan referred to it for consideration and report and tabled by the Minister for Communications and Digital Technologies in terms of the Public Finance Management Act 1999 (PFMA) as well as the Money Bills Amendment Procedure and Related Matters Act, 2009.

 

The Committee was briefed by the Department of Communications and Digital Technologies on 19 May 2021. A central component of the interrogation of the work of the Department was to determine the extent to which the Department translated its mandate to align it to the prescripts of the Constitution, Government priorities and legislative mandate. The Committee further considered the adequacy of financial resources for the implementation of the Annual Performance and Strategic Plans.

 

 

1.1   Mandate of the Department of Communications and Digital Technologies

 

To encourage digital inclusion and economic growth, the Department of Communications and Digital Technologies is mandated to facilitate South Africa’s digital transformation by creating an enabling policy and regulatory environment. The department implements the provisions of the 2016 National Integrated ICT Policy White Paper, particularly the participation of multiple stakeholders for inclusive digital transformation; interventions to reinforce competition and facilitate innovation across the value chain; measures to address issues raised by ICT and convergence; and the establishment of a new national postal policy framework. It also provides for policies to address the digital divide and affordable access, supply‐side issues and infrastructure rollout, and demand‐side issues to facilitate inclusivity.

 

The department’s mandate is derived from the following legislation:

 

• Broadcasting Act (1999), as amended, which establishes broadcasting policy in South Africa
• Electronic Communications Act (2005), as amended, which provides the legal framework for convergence in the broadcasting, broadcasting signal distribution, and telecommunications sectors. It also allows for the granting of new licences and social obligations; the control of the radio frequency spectrum; and the regulation of electronic communication network services, electronic communication services, and broadcasting services
• Film and Publications Act (1996), as amended, which provides for the classification of certain films and publications, and establishes the Film and Publication Board and Tribunal
• Independent Communications Authority of South Africa Act (2000), which establishes the regulator in the sector
• Postal Services Act (1998), as amended, which makes provision for the regulation of postal services.

 

Following the May 2019 National Elections, the President pronounced the establishment of the National Department of Communications and Digital Technologies. Accordingly, the Presidential Proclamations confirmed the transfer of administration, powers and functions entrusted by legislation to the Minister of Communications and Digital Technologies in terms of Section 97 of the Constitution.

 

Following the formation of the new Department, the institutional policies and strategies were updated. This was done in respect of Chapter 4 of the National Development Plan, which recognises that Information and Communications Technologies (ICT), is a key enabler of inclusive growth that is critical to addressing inequality in South Africa. Taking into consideration ICT developments in relation to the Fourth Industrial Revolution (4IR) including outcomes of the Presidential Commission on the 4IR, coupled with the objectives of the National Development Plan (NDP), Five Year Implementation Plan and Medium Term Strategic Framework (MTSF), the Department will over the medium term focus on developing and revising existing policies, strategies and legislation. Such initiatives are encapsulated in the Outcome of Enabling Digital Transformation policies and strategies, which also inform the Department’s legislative programme over the medium term.

 

The following state owned entities report to the Ministry, namely:

 

 

• National Electronic Media Institute of South Africa
• Universal Service and Access Agency of South Africa
• Independent Communications Authority of South Africa
• South African Broadcasting Corporation
• Universal Service and Access Fund
• .za Domain name Authority
• State Information and Technology Agency
• Sentech
• Broadband Infraco
• South African Post Office
• Film and Publication Board.

 

Following the establishment of the Department of Communications and Digital Technologies (DCDT) in April 2020, through the merger of the department of Communications and the Department of Telecommunications and Postal Services, the Department is in the process of finalising the development of a revised organisational structure. As an interim measure in the short-term, the Department is functioning with a start-up organisational structure until the revised organisational structure aligned to the mandate and strategy is finalised and is approved and implemented. Following the approval of the revised organisational structure, the Department will develop a new budget programme structure that will allow the Department to deliver optimally on its mandate. In terms of acquiring relevant skills to deliver on its mandate the Department is in the process of undertaking a verification of competencies exercise, which will be followed by a structured and comprehensive skills audit. Furthermore, the Department has in place a Workplace Skills Plan (WSP) aimed at capacitating employees with requisite skills aligned to the mandate and strategy of the Department. The Department is currently prioritising the implementation of the Integrated Digital Transformation Strategy as it moves towards a paperless organisation. This programme will continue through the digitisation of additional business processes and systems as part of implementing the Integrated Digital Transformation Strategy. Within the Department, some processes and systems have already been consolidated and this include the review of existing operational policies and procedures. Moreover, the Department will ensure the mainstreaming of critical issues related to designated groups through the Chief Directorate: Gender, Disability, Youth and Children (GDYC). This Unit will also ensure that all Departmental programmes, policies and processes are inclusive of issues related to such designated groups and will monitor the Departmental and SOCs Gender, Disability, Youth and Children Responsiveness programmes in line with National targets.

 

1.2 Impact of COVID-19 on ICT Sector

 

The pandemic has affected several industries across the globe with ICT being one of them. The industry witnessed a dynamic change during these times with some of the technologies finding new applications and some others witnessing an all-time low. The Information Communication Technology (ICT) sector has proved to be the pillar of many economies, both in developed and developing countries. With that realisation many organisations having made investment in the ICT Sector, from new Internet Service Providers (ISP’s) to postal services companies and television and radio broadcasters. Nevertheless, it is important that the ICT sector focuses on adapting to the Fourth Industrial Revolution (4IR) that is bringing new technologies, which means business models, government decisions and other choices will have to transform due to a new set of challenges and uncertainties.

 

During the era of the pandemic, certain technologies gained traction including Over-the-Top (OTT) services, video conferencing technology, Artificial Intelligence (AI), video streaming platforms, team collaboration software, mobile security technology, video on demand (VoD) market, cloud gaming market amongst others. With organisations promoting working remotely, there is already an exponential rise in video calls/phone calls, as an increasing number of people are organising meetings via apps or collaboration platforms. Digital media and Over-the-Top (OTT) content players are benefiting while Virtual Private Networks (VPNs), cybersecurity and data security are other technologies that will see a surge as most workforces are operating remotely. Cloud services is further expected to grow boosted by higher usage of content, gaming downloads, video conferencing and the impact of remote access to corporate networks. There will also be an increased focus on technologies like artificial intelligence, big data, augmented reality and virtual reality among others going forward.

 

Other areas where there is an uptake include e-learning, online education, and e-governance. As shoppers begin to self-isolate and avoid crowded areas the clear winner is the e-Commerce sector with digital payment taking over a lot faster than the physical payment options. The media industry (both traditional broadcasters and newer streaming platforms) are playing a vital role during the pandemic in providing correct and responsible health information to the public with search engines and social media platforms. In terms of the morale of those isolated, access to the wealth of quality content available is important.

 

The current circumstances may also accelerate the adoption of 5G to meet the demands of bandwidth, performance and network slicing. There will be more focus on the sufficiency of networks to carry the significantly increased traffic as working from home continues to ramp up. Social distancing and self-isolation mean that telecommunication has become an elevated essential service. The Communications Service Providers (CSPs) both Mobile Network Operators (MNOs) and cable operators should be able to meet the challenge of their new critical role in the changed world. Access to ICT goods and services in South Africa continues to grow. Household access to mobile telephony has reached a plateau, closing in on universal service with over 96 percent of households reporting one or more members owning cellphones. Fixed-line telephony access continues to shrink, while households using them to supplement communications. The level of household Internet access is far lower, with some percent of households reporting one or more members having access to using the Internet. However, most of this access takes place ‘using mobile devices’ with just over ten percent of households reporting internet access ‘at home’.

 

 

2.     Priorities for 2020/21

 

In line with its mandate, the Department’s priorities for the medium-term will focus on (1) Enabling Digital transformation policies and strategies, (2) Increased access to secure Digital Infrastructure, (3) Transformed digital society and (4) High performing Portfolio to enable the achievement of their respective mandates. This will contribute to achieving the desired impact of digitally enabled citizens with secure and affordable universal access.

Over the medium term, the Department will prioritise implementation of the outcomes of the Presidential Commission on the Fourth Industrial Revolution Report (4IR) in line with the PC4IR Strategic Implementation Plan. The 4IR Report, which contains eight key recommendations on how to deliver on a 4IR-enabled South Africa was approved in 2020 by Cabinet.

The second priority area is Spectrum licensing which is the lifeblood of digital infrastructure and will ensure that the Department connects the unconnected particularly in rural areas; as it will ensure that the Department reduces the costs of communications and data across the country to enable faster and cheaper connectivity. The Department has also developed a draft 5G Policy Direction that the department intend finalising and issuing by December 2021.

The third critical priority project for the Department is focused on human capital development and the future of work. This project forms part of the National Digital and Future Skills Strategy, which is aligned to the recommendations of the PC4IR Report. The National Digital and Future Skills Strategy, which was approved by Cabinet, is also focused on addressing the disparities in education and sophistication in different communities in our society.

The fourth priority area is focused on policy, legislation and regulation review. The fast changing environment of the ICT has rendered a number of departmental prescripts obsolete and hence the need to update our enabling legislation and other prescripts. In this regard, the Department will focus on creating a conducive policy environment for the growth and transformation of the sector. In this financial year the department will prioritise key policy and legislation including but not limited to the Digital Transformation Policy, SAPO SOC Ltd Amendment Bill, Data and Cloud Policy as well as Audio, review the Under-Served Area License (USAL) and Audio-visual Content Services Policy.

Furthermore, the Department will focus on reorganizing and repurposing identified State-owned entities (SoEs) into resilient, self-sustaining, and effective agents for delivering services to communities. In this regard, key pieces of legislation will be prioritised including the State Digital Services Company Bill and the State Digital Infrastructure Company Bill.

The fifth priority will focus on SA Connect. Digital infrastructure is key to economic growth for the country as a whole and forms the foundation for the digital transformation of both the private and the public sector.

The Department will therefore continue and prioritise the implementation of the SA Connect policy as well as fast track the Broadcasting Digital Migration Programme. The Department will also prioritise stringent oversight on our State-owned entities to ensure that they deliver on their respective mandates in the most efficient and effective manner possible.

 

3.     Expenditure overview of the Medium Term

 

Over the medium term, the Department will focus on rolling out broadband to government buildings through South Africa Connect project, implementing the broadcasting digital migration policy to release digital spectrum and submitting legislation to Parliament to enable digital transformation.

 

The Department has an allocated budget of R8.5 billion over the medium term, of which 74.8 per cent (R6.2 billion) is for transfers to public entities for their operations and for project-specific funding. Expenditure is expected to decrease at an average annual rate of 9.6 per cent from R3.3 billion in 2020/21 to R2.4 billion in 2023/24. Driving this decrease is the conclusion of a one-off allocation of R1.1 billion in 2022/23 for the broadcasting digital migration project and Cabinet approved reductions over the Medium Term Expenditure Framework (MTEF) period of R743.7 million, mainly on transfers to public entities (R442 million) and compensation of employees (R224.2 million). The Department will rely mostly on natural attrition as a strategy to fall within the expenditure ceiling for compensation of employees. Expenditure in this regard is expected to decrease at an average annual rate of 1.2 per cent, from R302.2 million in 2020/21 to R291.3 million in 2023/4, driven by the expected decrease in the number of personnel from 367 to 343 over the same period.

 

Medium Term Budget breakdown per programme

 

Digital Migration

The implementation of broadcasting digital migration includes the provision of vouchers to poor households for devices that will allow analogue televisions to receive digital signals, and compensation to the South African Post Office (SAPO) for costs of administering the voucher and distribution systems. The Department will coordinate and monitor the distribution of these vouchers in 2021/22 for which R95 million is allocated for payment to SAPO. To release spectrum for mobile broadband the Universal Service Access Fund has been allocated R1.1 billion in 2020/21.

 

Broadband connectivity

The Department will monitor and maintain the provision of broadband services to 970 government buildings that have already been connected at a projected cost of R773.6 million over the MTEF period in the Broadband sub-programme in the ICT Infrastructure Development and Support Programme. The Department expects to finalise the feasibility study for Phase 2 of the rollout by 2021/22 and use this study to secure funding to rollout broadband connections to identified facilities from March of the 2022/23 financial year.

 

Enabling digital transformation

To achieve digital inclusion and economic growth, the Department plans to implement a number of digital transformation policies over the medium term, including the Digital Economy Master Plan, the Presidential Commission on the Fourth Industrial Revolution report and the revised ICT Development Strategy for small, micro and medium enterprises (SMME’s). The Department plans to submit the following legislation to Cabinet, namely:

• Electronic Communication Amendment Bill
• State IT Company Bill
• State ICT Infrastructure Company Bill
• Digital Development Fund Bill.

 

To achieve these targets, the expenditure on the ICT Policy Development and Research Programme is expected to be R152.1 million over the MTEF period.

 

4.         Programmes of the Department

 

4.1        Programme 1: Administration

The purpose of this programme is to provide strategic management and support services to the Department. Its sub-programmes are as follows:

 

• Ministry
• Departmental Management
• Internal Audit
• Corporate Services
• Financial Management
• Office Accommodation.

 

 

Over the medium term, Programme 1 will focus on the outcome of a higher performance portfolio to enable the achievement of the mandate of the Department. The focus will be to ensure there is sufficient adequately skilled staff who possess the requisite skills to deliver on the new mandate of the Department. To this end, a Workplace Skills Plan is being developed which is directly aligned to the mandate as well as addressing the skills gap within the organisation. Further areas of priority include the implementation of an internal Integrated Digitisation Strategy as the Department works towards a paperless environment. In addition, the Department will coordinate the implementation of the Annual Communication Plan. The outputs of Programme 1 are aligned with Priority 6 of the National Development Plan: A capable, ethical and developmental state as well as Outcome 2: Functional, efficient, integrated Government. The initiatives are aimed at accelerating the implementation of Departmental projects to improve service delivery. For the 2021/22 financial year, Programme 1 will receive R271 million which is 10 per cent of the total budget of the Department.

 

4.2        Programme 2: International Affairs and Trade

The purpose of this programme is to ensure alignment between South Africa’s foreign policy and activities in the field of ICT. The objectives of this programme are to:

Advance South Africa’s ICT interests in regional and international forums to secure partnerships for economic growth by:

• Developing Three Country Position papers to support the digital economy by March 2022, focussed on the Brazil-Russia-India-China-South Africa group of countries (BRICS) agenda; the World Telecommunications Standardisation Assembly; and the South African Development Community
• Implementing and monitoring the approved international engagement strategy by March 2022
• Coordinating and monitoring the operations of BRICS Institute for Future Networks over the medium term
• Implementing, facilitating and monitoring identified programmes focussing on the digital economy through partnerships with identified partners over the medium term.

 

The sub-programmes are as follows:

• Programme Management for International Relations and Affairs provides for the overall management of the programme
• International Affairs leads South Africa’s ICT and strategic interests  in multilateral forums
• ICT Trade/Partnership develops and advances the country’s interests in international trade forums through participation in the World Trade Organisation’s ICT-related initiatives and other international trade agreements such as the South Africa- European Union trade agreement and bilateral agreements with counterpart countries.

 

The spending focus of this sub-programme over the medium term will be payments for international membership fees. The allocation for the 2021/22 financial year is R64.6 million that is 2 per cent of the total budget of the Department. Over the MTEF period, travel will constitute the bulk of spending increasing from R3.3 million in 2021/22 to R4.7 million in 2023/24.

 

4.3        Programme 3: Policy, Research and Capacity Development

The purpose of the programme is to develop ICT policies and legislation that supports the development of an ICT sector that creates favourable conditions for accelerated and shared economic growth. Furthermore, the development of strategies that increase the adoption and use of ICT by the majority of South Africans to bridge the digital divide.

 

The objective of this sub-programme is to transform policies and strategies through the following:

• Implementing the digital transformation policy by March 2024
• Implementing the South African Post Office Amendment Bill by March 2024
• Facilitating and monitoring implementation of the South African Broadcasting Corporation Bill by March 2024
• Facilitating and monitoring the implementation of the data and cloud policy by March 2024
• Facilitating and monitoring the implementation of the Presidential Commission on the Fourth Industrial Revolution Report by March 2024
• Facilitating and monitoring the implementation of audio-visual media services network policy by March 2024
• Introducing the Electronic Communications Amendment Bill in Parliament by March 2024.

 

The sub-programmes for Programme 3 are as follows:

• Programme Management for ICT Policy Development and Researchprovides for the overall management of the programme.
• ICT Policy Developmentdrafts legislation, regulations, policies, strategies and guidelines that govern the telecommunications, postal and IT sectors.
• Economic and Market Analysisconducts economic and market analysis of the telecommunications, audio‐visual, postal and IT sectors.
• Small, Medium and Micro Enterprisefacilitates the growth and development of digital SMMEs.
• Research to beconducted to inform the development of legislation, regulations, policies, strategies and guidelines; undertakes policy impact assessments; and monitors and evaluates the implementation of legislation, regulations, policies, strategies and guidelines.
• Broadcasting Policydrafts legislation, regulations, policies, strategies and guidelines that govern audio‐visual media sectors.
• Presidential Commission on 4IRcoordinates, monitors and evaluates multi-sectoral initiatives to position South Africa as a globally competitive player in the fourth industrial revolution.

 

For the 2021/22 financial, Programme 3 (Policy, Research and Capacity Development) receives an allocation of R57.5 million that reflects 2 per cent of the total budget allocation.The spending focus over the medium term will be on developing ICT legislation in line with the National Integrated ICT Policy White Paper. Over the MTEF goods and services will decrease from R24,9 million in 2021/22 to R15.2 million in 2023/24. The budgeted amount for travel over the MTEF is R 16.1 million and for consultants: business and advisory services is R 18,9 million.

 

4.4. Programme 4: ICT Enterprise Development and State Owned Entity (SOE) Oversight

 

The purpose of Programme 3 is to oversee and manage Government’s shareholding interest in ICT public entities and State-owned entities and to facilitate the growth and development of small, medium and micro enterprises in the ICT sector.

 

The objective of Programme 3 is to improve the performance of State-owned entities through proactive oversight by:

• Monitoring the service delivery performance and compliance of State-owned entities against strategic plans and relevant prescripts over the medium term
• Facilitating the implementation of a performance management system for councilors in the Independent Communications Authority of South Africa (ICASA) over the medium term.

 

The sub-programmes of Programme 3 are reflected as follows:

• Programme Management for ICT Enterprise and Public Entity Oversightprovides for the overall management of the programme.
• Regulatory Institutionsmonitors the implementation of policies, and provides guidance on and oversight of the governance matters of regulatory institutions.
• Universal Service and Accessmonitors the implementation of policies, and provides guidance on and oversight of the governance matters of relevant state‐owned entities. This sub-programme also makes transfers to the South African Broadcasting Corporation, the Universal Service and Access Agency of South Africa.
• The Universal Service and Access Fund, and the South African Post Office to provide subsidies for the fulfilment of their universal service and access mandates.
• ICT Skills Developmentmonitors the implementation of policies and provides guidance on and oversight of the governance matters of the National Electronic Media Institute of South Africa (NEMISA) for the provision of skills development programmes.
• State‐owned Entity Governance and Supportstrengthens the capacity of the department and that of its State-owned entities to effectively deliver on their mandates.

 

For the 2021/22 financial year, Programme 4 received R1.6 billion which is the largest share reflecting 57 per cent of the Departmental budget allocation. The spending focus over the medium term will be on continuing to strengthen the department’s ability to exercise oversight over public entities and the establishment of National e-SkillsInstitute (iNeSI). The budgeted amount for travel over the MTEF is R13.5 million.

 

4.5. Programme 5: ICT Infrastructure Development and Support

 

The purpose of this Programme is to promote investment in robust, reliable, secure and affordable ICT infrastructure that supports the provision of a multiplicity of applications and services.

 

The objective of Programme 5 is to increase access to secure digital infrastructure through:

• Monitoring and maintaining provision of broadband services to 970 connected sites over the medium term;
• Securing funding and implementing Phase 2 of the roll-out of broadband connections to government facilities over the medium term;
• Facilitating and monitoring the operations of the Digital Transformation Centre by March 2022; and
• Coordinating and monitoring 360 000 subsidized digital television installations by March 2022.

 

The sub-programmes in Programme 5 are categorized as follows:

• Programme Management for ICT Infrastructure Development andSupportprovides for the overall management of the programme
• Broadbandis responsible for developing and facilitating the implementation of the broadband policy and strategy
• ICT Supportis responsible for projects related to authentication, digital object architecture and internet governance
• Broadcasting Digital Migrationmanages the transition from analogue to digital broadcasting to enhance the digital broadcasting platform and subsequently release dividend spectrum for mobile broadband applications.

 

For the 2021/22 financial year, Programme is allocated R1.5 billion which is 26 per cent of the total budget allocation. Of this allocation, the Department makes transfers to SENTECH, SAPO and USAASA for the Broadcasting Digital Migration Programme.

 

4.6 Programme 6: ICT Information Society and Capacity Development

 

The purpose of Programme 6 is to develop and implement strategies to build capabilities to bridge the digital divide. The objective is to contribute towards building a digital enabled society through sound and relevant information society strategies and programmes by:

• Facilitating, monitoring and reporting on the implementation of the revised national e-government strategy and roadmap by March 2022
• Developing the African Union Artificial Intelligence Blueprint by March 2022
• Facilitating and monitoring the implementation of the digital and future skills programme by March 2022
• Reviewing and monitoring the framework on digital transformation and digital inclusion by March 2022.

 

The sub-programmes of Programme 6 are as follows:

• Programme Management for ICT Information Society and Capacity Development provides for the overall management of the programme
• Information Society Development supports the promotion of a digital society by facilitating the adoption and use of digital technologies
• Capacity Development facilitates capacity-building interventions related to the development of digital and future skills towards a digital society.

 

For the 2020/21 financial year, Programme 6 receives an allocation of R74 million which is 2 per cent of the Departmental budget. Over the MTEF, goods and services will decrease from R28 million in 2021/22 to R22.7 million in 2023/24. The budgeted amount for travel over the MTEF is R12.4 million and the budget for consultants and advisory services amount to R25 million.

 

 

5.        Committee Observations

 

The Committee made the following observations:

1. The Committee welcomed the presentation by the Department and urged that the Committee be engaged as to where Members can assist.
2. Noting budget cuts made by National Treasury across all departments, Members queried the extent to which the Department would be able to deliver on its key priorities and the extent to which these were fully funded.
3. In response to queries relating to consultancy fees and the lack of internal capacity, the Department submitted that the medium-term focus on implementing a targeted legislative Programme under Programme 3 aimed at achieving the Outcome of having in place Enabling digital transformation policies and strategies which will form the foundation of the digital economy. Such policies and legislation will be targeted at stabilising and strengthening its State-owned entities. Amongst the Regulatory Reform Bill and White Paper on the Audio and Audio-visual Content Services will be developed and submitted to Cabinet. Relevant policy, legislation and plans will also be focused on creating a conducive policy environment for the Digital Economy that will include the implementation of Data and Cloud Policy as well as the coordinating and monitoring of the Digital Economy Masterplan. Over the MTEF period, the budget for consultants, business and advisory services is R 18,9 million.
4. In terms of progress on legislation, the Department indicated that in respect of the South African Post Office Amendment Bill, public consultation was expected to conclude in June 2021. Thereafter it will be submitted to Cabinet in July 2021 with a view to tabling it in Parliament in the Third Quarter of the 2021/22 financial year.
5. In response to concerns raised regarding the turnaround at the South African Post Office, the Department submitted that it is working closely with the entity and a dedicated team of experts has been deployed to improve its business offerings.
6. Noting the outcomes reflected in the annual performance plan related to the four provinces identified for to digital migration, Members urged that Departmental programmes must not neglect rural provinces, particularly those with high unemployment rates and provide an equitable spread of services across provinces. Members further urged the Department to move with speed with the SA Connect project especially in rural areas.
7. Members queried the extent to which the new Department of Communications and Digital Technologies structure was fit for purpose and whether the Department was on track with the merger in respect of the approval of the organisational structure.
8. In response to queries raised by Members regarding work being done to make the cost of communications more affordable, the Department submitted that following the report completed by the Competition Commission, the former Minister for Telecommunications and Postal Services tasked ICASA to thoroughly engaged on this matter. This process is guided by the roadmap developed by the Department.
9. In response to queries by Members regarding the legal challenges in respect of finalising the spectrum auction, the Department submitted that ICASA was in mediation talks with the respective parties. While there is still a few sticky issues, the Department is optimistic that a compromise can be found, the Minister is also engaging privately with all parties to find an amicable solution. Once these matters have been resolved, the Department will be able to forge ahead with the licencing of the spectrum.
10. In respect of the consultation process of the outcomes of the Report of the Presidential Commission on the 4th Industrial Revolution, the Department submitted that consultation-workshops have been ongoing by the Department and over the next three months the Department will be engaging with the banking sector, clusters of government and the academia.
11. In response to concerns raised by Members regarding the impact of budget cuts on departmental programmes, it was reported that in respect of Programme priorities, particularly SA Connect, funding is the biggest challenge and new funding has been allocated to maintain existing sites. The Department is working with the private sector and entities and looking at a public private entity consortium to reach out and expand to other areas. Negotiations are underway with National Treasury to free up additional funding so that the Department is allocated more funds over the medium term to fund household connectivity particularly to townships and rural areas.
12. Members urged the Department to conclude the process of finalising the banking licence for the South African Post Bank, the Department acknowledged the need to complete this process noting that it would not want to lose the Post Bank’s existing footprint due to delays.

 

6.        Recommendations

 

The Committee recommended that the Minister of Communications and Digital Technologies should, within the 2021/22 financial year, ensure that the Department of Communications and Digital Technologies:

 

• Provides timelines for the processing of the South African Post Office’s Amendment Bill and the corporatisation of the South African Postbank (obtaining the banking licence).
• Provides progress reports and updates on the challenges and interventions taken toward the successful implementation of the SA Connect project.
• Engages the Committeee on progress in respect of the Universal Service and Access Agency of South Africa (USAASA) funding requirements.
• Provides progress reports on the release and licencing of the spectrum following legal challenges by Telkom and Etv against the Independent Communication Authority of South Africa (ICASA).
• Provides progress reports in respect of support for Small, Medium and Micro Enterprises (SMMEs) in the ICT sector and skills development in anticipation of the 4th Industrial Revolution.
• Engages with the South African Broadcasting Corporation with regard to the successful implementation of the national broadcaster’s turn-around strategy.

 

8.        Conclusion

 

Having considered Budget Vote 30 and the Annual Performance Plan of the Department of Communications and Digital Technologies, the Committee recommends that the Council passes the budget.

 

Report to be considered.