Programme Director Mr C. Ndabeni,
My colleague and sister, Acting Premier Mme Mabe,
Executive Mayor of the Bojanala District Municipality,
Members of the Executive Council,
Government and community leaders Business leaders and SMME operators, Ladies and gentlemen.
Thank you for hosting me and giving me the floor to address this incredible audience and share some views about the role of the Department of Communication (DOC) in contributing to shape the fundamentals necessary to the growth of our Nation. What is at stake? Steve Jobs, the technology entrepreneur, once said “The best way to predict the future is to invent it”.
In the context of the global economy fast tracking the world towards the future notwithstanding the increased correlations between nations, South Africa has a great role to play. If indeed the best way to predict the future is to invent it, we have no other choice than to anticipate and prepare tomorrow today!
This implies defining our own models of developments as indeed should we follow the development model of the Western World it would take us a century to catch up. Our country does not have the luxury of a century and time is of the essence. We have no other choice than leapfrog sooner rather than later. The telecommunications industry is a very good example.
The African continent in general and South Africa in particular have demonstrated their capacity to leapfrog: in our country, access to telecommunications services has increased from less than 10% to 100% penetration rate in less than 10 years.
That is what we call LEAPFROG! South Africa is leapfrogging towards a knowledge based society and needs to accelerate the pace in order to remain globally competitive.
Knowledge is now recognized as the driver of productivity and economic growth, leading to a new focus on the role of information, technology and learning in economic performance. The term “knowledge-based economy” stems from this fuller recognition of the place of knowledge and technology in modern economies.
Forty years ago, South Korea shared an equivalent Gross domestic product (GDP) to Nigeria or Ghana and is now among the top eight biggest economies in the World? How did they operate such miracle? By committing towards a knowledge-based economy! The growing codification of knowledge and its transmission through communications and computer networks has led to the emerging “information society”. The need for workers to acquire a range of skills and to continuously adapt these skills underlies the “learning economy”.
The importance of knowledge and technology diffusion requires better understanding of knowledge networks and “national innovation systems”. Indeed what should differentiate a mine worker in the North West Province or in South Africa in general to any other mine worker around the World? He should continuously upgrade his skills through permanent access to information and technology upgrades to remain at the edge on the global industry in order to generate higher productivity levels.
There is no secret! What does it mean practically? To date there are some 500 million devices (mostly phones and computers) connected to Internet around the world. By 2020 some 50 billion devices from cars to appliances will be talking to one another. It is our duty and responsibility as a country to propel our nation into the mix.
The Department of Communications must play a significant role towards the achievement of such goal and should be a driving force in not only bridging but also leapfrogging the digital divide. In addition to knowledge investments, knowledge distribution through formal and informal networks is essential to economic performance. Knowledge is increasingly being codified and transmitted through computer and communications networks in the emerging “information society”.
Our goal is to achieve 100% broadband penetration by 2020 respecting the three principles of accessibility, affordability and availability. Do you really think South Africans will all be using computers 10-15 years from now? Do you think your smart phones are smart? According to research by Fortune Magazine “By 2020, mobile phones are expected to have tens of terabytes (Tb) of local storage and multi-gigahertz processors (this means that they will be as powerful as supercomputers that today are housed in data centres).
What does that mean for the man on the street? Consumers will be able to do complex computing while awaiting the bus or taxi. With all that extra storage, mobile workers will be able to keep and access the equivalent of the entire library of the American Congress on their device instead of retrieving files from the cloud. How does the doc prepare the nation for that? Our Achievements to date; Neither the knowledge based economy, nor the future we just predicted will not happen without broadband infrastructure. South Africa has begun initiatives to invest in technology and infrastructure. The landing of the undersea cable West African Cable System (WACS) is one of several projects expected to double South Africa’s broadband capacity.
In March 2012, President Jacob Zuma announced at a BRICS meeting in Delhi that a 34 000km undersea cable linking Brazil, Russia, India, China and South Africa would be completed at a cost of more than $1 billion. Feasibility studies have been completed, and Alcatel has already mapped the cable route, which will connect the BRICS cable with existing undersea cables along the way. The speed of the cable is set to be 12.8Tb/second. These steps will strengthen the country’s data backbone and will improve the offering of broadband Internet and data-related services.
Some operators are banking on LTE-powered broadband to attract customers going forward. Other Projects such as ACE are on the way and should provide more capacity. In addition, South Africa is one of the largest telecom markets in the Africa and Middle East region. In 2011, total telecom revenue stood at $18.1 billion, and we expect this figure to swell to $19.6 billion within less than two years, even in the face of anticipated rand currency fluctuations. South Africa’s mobile market is relatively mature in terms of adoption, especially when compared with Turkey. The mobile subscription penetration rate in South Africa stood at 130% by the end of 2011, a phenomenal increase of 22 % points over penetration levels in 2010.
Turkey, with a mobile subscription penetration rate of 88%, has a telecom market size similar to South Africa but is unable replicate South Africa’s revenue generation ability despite having a larger population with a higher level of nominal GDP per capita. We believe South Africa still has room for growth. Furthermore, we are entering an era of convergence where content is King! As an example, pay-TV is doing quite well in the South African market, and content providers continue to look to the country as a source of potential revenue.
At an estimated 3.9 million accounts in 2012, Global Telecom Media Research Companies project that pay-TV adoption will grow at a CAGR of 1.8% through 2017 to reach at least 4.3 million accounts. This market is expected to total $1.4 billion, or 7.3%, of all telecom revenue in South Africa by 2017.
The Department of Communications is working towards exceeding those targets by setting the adequate framework and enabling environment for growth to accelerate and ultimately meet the expectation of the population. As you know The DOC is actively working towards gearing up the country towards the 2015 digital transition by setting a world class plan for Digital Terrestrial Transmission.
The DOC has also fully endorsed its leadership role on the continent by working closely with International Telecommunication Unit to setting up the first ever Information and Communications Technology (ICT) Indaba mobilising all the industry key players from Africa and around the World to set up a growth path towards the planned Knowledge based Economy.
The group gathered at the Indaba included eminent Ministers of Telecommunications, regulators as well as private sector leaders to take bold steps and take the continent to the forefront of the telecommunications industry. During the Indaba we collectively defined the following framework setting up goals to be attained by 2020:
- We declare access to broadband communication as a basic human right in Africa and commit to increasing broadband penetration to approximately 80 % of the population by 2020. This common vision draws its basis from the positive impact exerted on economic growth through increasing Accessibility, Affordability, and Availability to broadband by all.
- We further declared our concerted commitment to advance consultations with relevant stakeholders and expedite policies and regulations that are geared towards reduction of costs to communicate in order to facilitate fair access to services. This targeted reduction in costs should not only be focused to network operators but also extend to the retail market, addressing price of communication devices such as computers, set-top-box, televisions, smart phones and tablet computers.
- We are resolute in advancing pragmatic and foresight-driven eStrategies in our individual countries with a key focus on providing tangible solutions to our immediate challenges in Education, Agriculture, Health and overall government service delivery.
- We further committed to taking bold steps in closing the skills gap, in particular, to promote broadband integrated facilities in ICT education in such a way that it enhances the production of an industry ready workforce and an entrepreneurial ecosystem fostering innovation.
The Indaba was undoubtedly a success and has since gained significant momentum and support across the continent as a necessary milestone to leapfrog the growth of our economies by setting the key fundamentals for the contemplated knowledge based economies. A Pan African ICT Indaba Secretariat is being contemplated to follow up on those commitments and secure effective delivery on the action plan. The other topics of on which we are actively working are as follows:
Spectrum Allocation
The Department is working closely with Independent Communications Authority of South Africa (ICASA) to ensure that spectrum allocation be balanced and fair to ensure usage and benefits the end user.
National ICT Plan
In April 2012, the Department of Communications held the National ICT Colloquium, which was an opportunity for the country to review government ICT policies in place since 1994.
The DOC is working towards setting up a national ICT policy that is up-to-date and relevant for the current context. As we are currently drafting the National ICT Plan, we recognise the need for key intervention areas to enable the achievement of the above mentioned objectives and targets. These include:
- Focus on learning and human capital development to ensure the ICT skills requirements of the economy and to enable Africans to effectively participate in the digital and knowledge economy, with particular attention to those skills needed in e-content creation and application design.
- Secure investment capital (both public and private) to fund the large scale infrastructure required to achieve the targeted access and penetration levels, sustainable funding and the promotion of small, medium and micro enterprises.
- Strengthen the research and development, design production capabilities and skills transfer which need to be enhanced to increase local economic value and leveraging global best practice to stimulate and increase investment into local manufacturing on the continent.
- Stimulate local content production considering the opportunity of application development, the multi-media sector, knowledge creation and the digitisation of Government.
- Select and evaluate best practices in Africa and globally to share the lessons learnt to stimulate innovation and local content creation to strengthen the focus on the knowledge society consistent with the aspirations, values and African traditions on the continent.
What are the prospective benefits and opportunities for our stakeholders? The three main opportunities could be summarised as follows:
- The Undersea cables arrive.
- 4G Services including LTE to be launched shortly.
- The highly expected pay-TV adoption.
Opportunities for operators, Operators should not wait to prepare their operations for the eventual introduction and maturity of these services. The rates of adoption of 3G service and pay-TV subscriptions point to the need to plan in advance, especially as it relates to making sure content is available in all of South Africa’s 11 official languages.
Operators must also take the threat of VoIP seriously and devise ways that this service might be used to complement their current offerings. Internet providers and service providers need to be creative in their services because the quality of service is almost a level playing field. Focusing on the market of incoming businesses can be a growing patch of revenue as more companies settle in South Africa.
Continue catering to rural and low-income users as a way to create brand loyalty within this large consumer segment, affordable top-up vouchers is a good step. Opportunities for Vendors; As we all know, President Zuma declared in February this year that the country is planning to engage in significant upgrade of its infrastructure and is envisaging important budget to meet the objectives in that realm. We expect for instance, LTE service to launch within the next two years, and when it does, similar to the Middle East, vendors will need to be ready to provide network rollout services to operators. Three major operators have already been trailing LTE and will need to grow their cadre of base stations sooner rather than later.
The data capacity in South Africa will double once all the undersea cables are at full capacity output. Connecting this data network to rural areas and updating existing networks to accommodate more efficient operations will be a strong market and revenue source for vendors. Opportunities for Investors South Africa has proven its ability to be a stable destination source and will continue to play an important role both as a hub in southern Africa and the greater African context.
The country is also emerging as a content hub for pay-TV platforms. Services based on data usage and mobile penetration, such as mobile TV, will be attractive to investors because data will have phenomenal growth over the next five years. When ICASA auctions long-awaited LTE spectrum licenses, investors could gain an entry to the market, especially if partnering with South African citizens or groups.
What are the opportunities for provinces such as the North West?
- Developing ICT Clusters through Special Economic Zones. Knowledge-based economy will not be achievable unless we set up strong ICT clusters that are globally competitive and attract talents and investors. Hosting such clusters could become strong local drivers for provincial economies offering favourable entrepreneurship ecosystems as well as talent pools with adequate infrastructure.
- Leveraging on the local economies to move up the value chain via vertical integration. Let’s take the example of platinum for instance, as the term “Platinum Valley”, which emulates great Silicon Valley, is becoming more common to highlight the potential of South Africa.
The Department of Trade and Industry recently expressed that Special Economic Zones could help to obtain best advantage from unique platinum endowment as the country could take fuel cells to slightly higher level. Now Platinum Group Metals – specifically the catalysed fuel cells - are stepping up to the plate to power buses, boats, trains, cellphones and laptops. Fuel cells can help the telecommunications sector to use clean energy to generate power, or for back-up power for cellphone towers.
It is up to us to leverage on those opportunities and combine our skills by thinking forward together and place the corner stone of the knowledge based economy we have envisaged with the prospects of prosperity that it should generate for the people of this nation. Ladies and gentlemen thank you for your attention.
