Deputy Minister of Communications
Distinguished executive leaders of the information and communications technology (ICT) industry
Management and the staff of the ministry and the department
Members of the media
Ladies and gentlemen
It is my pleasure to welcome you to this august event to establish the foundation for a future partnership between the Department of Communications and the ICT industry as a whole.
I wish to express our sincere appreciation of your kind response in honouring my invitation to this round-table discussion. Our decision to convene the round-table seeks to enable us to share views, strategies and tactics on a number of critical issues confronting the ICT sector. This meeting is a culmination of the commitment I made during my first media conference in November 2010.
Our engagement is also informed by a need to build a common purpose as highlighted by President Zuma in his State of the Nation Address. The President stated that partnership between government and business was central to the attainment of the social and economic goals of our country. You will recall that the President also made a commitment to convene a national summit of government and business. Hence, this meeting should thus be seen as part of a broader government endeavour to engage with business and other stakeholders. Further engagements with other stakeholders will take place during the course of 2011.
The State of the Nation Address highlighted significant strides made by our government and people to create a people-centred society which will depend on the implementation of the priorities that we have set for ourselves. These include facilitating a new growth trajectory that allows for the creation of sustainable jobs across sectors. The ICT sector should contribute to this effort.
The New Growth Path also targets broadband infrastructure development as one of the main areas to fast track economic development, including job creation.
The opportunities before us:
Over the past four years, the total telecoms market has grown from R131 billion in 2007, to R179 billion in 2010. It is estimated that the sector will grow to R187 billion in 2011 with the possible figure estimated at R250 billion by 2020. To get to this figure, the high road scenario, is projected at R250 billion, whilst the middle road projection is R239 billion, and the low road at R221 billion in 2020. This exponential growth of the ICT sector can be attributed to the growth in the mobile communications market, including both voice and data services. Market penetration of mobile communications increased from 78 percent in to 104 percent in 2011, with an estimated 51 million subscribers.
The ICT services market has also contributed significantly to the growth of the telecoms market where we have observed that in 2007 the market grew from R31 billion to R45 billion in 2010. It is estimated that the data market will growth the fastest and that by 2015 the market will reach R24 billion. Increased competition regulation and the licensing of broadband spectrum will further spur the growth of the data market. We envisage that the data market will grow to circa R28 billion by 2020.
In this context, Cabinet has called on us to initiate programmes and activities that support the building of a new growth path for the country. We seek to guarantee that ICTs will make its substantive contribution as an enabler for economic growth and the creation of new jobs and skills amongst our people as we strengthen the foundation for knowledge-based economy.
The department will, accordingly, speed up the implementation of its priority projects taking advantage of the resources provided in the budget speech of the Minister of Finance. In particular, we will focus on these priorities:
Reconstructing the Department of Communications (DOC) to provide policy leadership
- We plan to do things differently- working faster, harder and smarter. In order to deliver a more efficient DOC, we require competent, caring and committed public servants
- We will continue in our endeavours to strengthen and capacitate the department to deliver on its constitutional mandate. As part of this exercise, we will finalise the institutional review process and fill all available vacancies within the next six months.
Aligning our State Owned Enterprises (SOEs) focus with government priorities
- Significant progress is being made to stabilise leadership and governance challenges at our State Owned Enterprises and agencies, particularly the South African Broadcasting Corporation (SABC), Sentech, Independent Communications Authority of South Africa (ICASA) and Telkom. To date we have appointed new chairpersons to the Telkom and Sentech boards
- A process is underway to capacitate the SABC board as well as to fill a vacancy in the ICASA council. Universal Service and Access Agency of South Africa (USAASA) and National Electronic Media Institute of South Africa (NEMISA) are also important in the attainment of the above – mentioned goals. We will continue to strengthen the governance structures in these organisations.
Migration of Broadcasting System from Analogue to Digital 2013
- South Africa has formally adopted DVB-T2 as the preferred standard for the migration of analogue to digital broadcasting. Based on this clarity, Sentech will continue to upgrade its infrastructure to allow us to meet the analogue switch-off deadline of 2013
- An important opportunity associated with this programme is the local manufacturing of Set-Top-Boxes amounting to about 11 million units over the next three years
- We will also implement a subsidy scheme for the indigent and other qualifying beneficiaries to ensure that the digital signal is accessible to all communities, including those in the rural areas
- We will communicate further details after consultations with other relevant departments and with Cabinet.
Broadband access for all
- Broadband access is one of our key policy priorities. We aim to improve our broadband penetration to match those of our comparative countries such as India, Brazil and Chile to name but a few. Our immediate activity will be to develop an Integrated Broadband Plan that will facilitate capital investment, innovation and rural access by 2020
- Our plans for connecting schools, health centres and government centres will not only improve service delivery but also improve the uptake and usage of broadband by government and individuals. To increase broadband penetration in schools and other public institutions, we will ensure that all outstanding universal obligations are implemented by industry by the end of 2011
- We will also work with ICASA and industry on the unbundling of the local loop as another potential contribution towards facilitating broadband access to homes on a large scale.
Building the Information society and knowledge - based economy
- With regards to building the information society and knowledge economy, we have decided that through the e-Skills Institute, we will ensure mass e-skilling for the 21st century knowledge-based industries so that our people can participate in the modern economy
- We will also revive the International Advisory Council on the Information Society and Knowledge where all stakeholders will be invited to participate in developing a vision for the ICT sector
- Our immediate plan is also to grow the Creative Industry, targeting such sectors as investment in animation for job creation as well as content production and practitioners.
- We will continue with the implementation of information society and development programmes that facilitate the uptake and usage of ICTs at large scale, whilst also building a layer of small, medium and micro enterprises (SMMEs) to exploit opportunities for job creation and sector growth
- Our work to accelerate the building of a people-centred, development-oriented, inclusive information society is underpinned by an ICT rural development strategy which will be implemented through various key programmes from the financial year 2011/12 onwards.
Policy and regulatory reform for convergence
- Working with ICASA, we will ensure that a pro-competitive regulatory framework is implemented in the telecommunications sub-sector. In our drive to reduce the cost of communication, we will implement pro-competitive remedies in all anti-competitive markets, learning from the work done on the regulation of call termination
- To achieve this, we will review the current funding model of ICASA to ensure that it is equal to the task while regulating competitively. This may include introducing a cost of regulation recovery model, learning from other experiences such as Botswana and Tanzania
- We will also work with our stakeholders (business, labour, and civil society) in the development of a National ICT Policy Framework which will chart a long term vision for the sector and its contribution to the broader economy. A Policy Colloquium will be convened in the second quarter of 2011 to launch a policy debate on this matter and to ensure that the nation is mobilised towards a common destiny determined by all of us.
Radio frequency spectrum management
- The DOC is working with ICASA to audit the availability of radio frequency spectrum, especially in the high demand bands that are needed for broadband deployment. Where necessary, we will introduce policy interventions to ensure effective licensing and use of the radio frequency spectrum.
Cybersecurity for the information society
- A National Cybersecurity Policy has been developed with an intention to strengthen and ensure a secure and growing e-commerce environment. The policy encompasses both reactive and proactive measures for building an information secure society.
Postal sector reform
- The Postal Sector is poised for further competitive reforms. We will consider the introduction of more competition in the market. President Zuma signed the Post Bank Bill into an Act late last year. Work will begin to fast-track the roll-out of the Post Bank centres or outlets throughout the country
- We will also be working with urgency to finalise the South African Post Office (SAPO) Act during the course of the financial year 2011/12. Parliament is already deliberating on the Bill.
As I indicated earlier our government is embarking on a campaign to create five-million jobs and reduce unemployment from 25 percent to 15 percent over the next 10 years. More specifically, the NGP framework targets 100 000 new jobs by 2020 in the knowledge intensive sectors of ICT, higher education, healthcare, mining- related technologies, pharmaceuticals and biotechnologies.
President Zuma further emphasised the importance of the private sector in the drive for the delivery of jobs. This forum is timely as it allows us to discuss the issues emanating from the President’s State of the Nation Address. The President announced the establishment of a R9 billion Jobs Fund over the next three years; as well as the R10 billion set aside by the Industrial Development Corporation over the next five years for investment in high job potential economic activities, which I certainly believe the ICT Industry is part of. The President also announced R20 Billion in tax breaks which is also an opportunity for ICT companies investing in job creation.
I wish to therefore extend the President’s call and invite you (ICT industry companies) to partner with us in this important job creation agenda.
The Department of Communications has put together a draft proposal of how ICTs can actually contribute to the job creation imperative and it focuses on the priorities I have already discussed earlier. We have set up a departmental task team on job creation, whose responsibility it is to coordinate the various efforts of the department as well as the entire ICT industry in order to report on progress.
We will also endeavour to establish an ICT industry wide working group on job creation whose purpose will be to facilitate the identification of priority areas which will create jobs. This working group will invite input from industry companies to propose priorities and make commitments to job creation targets.
National Economic Development and Labour Council (NEDLAC), in their research paper titled “Research to explore Job Creation in the ICT Sector”, dated September 1994, outlined obstacles facing the ICT sector which are still relevant today, with regards to job opportunities as being:
- The cost of education and the access to education in proportion to the social status that most South Africans find themselves in
- The ever increasing cost of labour and retaining highly skilled professionals
- The absence of knowledge sharing and the inability of different areas of the ICT sector, both in the private and public sector, to talk to each other
- Encouraging youth including those with skills to seek areas of opportunity within our borders and not to look overseas where the “big money” is
- Handling the influx of foreign innovation and how to integrate new technologies and ideas into our markets without skipping the important stages of development; and
- How to implement “home grown” ideas successfully to compliment current structures and trends in South Africa.
To achieve this, we remain committed to create a partnership with the private sector as an essential step for the realisation of a common vision for the South African industry where business targets growth and government realises a developmental digital dividend for our people. Our country needs a robust ICT industry to make a meaningful contribution to government’s pursuit of a growing economy that stands ready to respond to the needs of our people.
We seek, through this partnership, to achieve the following strategic outcomes:
- Universal access and connectivity in the rural areas
- Using technology to meet the needs of our people.
I reiterate the statement I made in my first media conference held on 11 November 2010: We have an amazing opportunity before us. Working together and by joining hands, we can become the change we want to see.
