Media statement on the priorities of the Department of Telecommunications and Postal Services that are contained in the 2017/18 Budget Vote
“Unlocking the social value of ICT”
The Minister of Telecommunications and Postal Services Dr Siyabonga Cwele and Deputy Minister Ms Stella Ndabeni-Abrahams will be presenting their 2017/18 Budget Vote speeches this afternoon. The R1.6 billion Budget Vote will outline the priorities for the department over the next 12 months that are aimed at transforming this growing but concentrated industry.
Working with all industry stakeholders, the department aims to facilitate greater involvement of black people in the sector and open opportunities for small and medium sized enterprises owned by women, youth and people with disabilities. It will also detail how the department will be taking forward the successes of the previous financial year.
The department’s priorities are informed by the goals of the National Development Plan and the Nine-Point Plan to reignite economic growth.
State of broadband
The recent ICASA Report showed 3G coverage reaching 99% and the 4G rising to 75% of the population. However, not all those who are ‘covered’ have access to or are using internet, as only 53,4% of South African households have access to internet.
The industry invested R28 billion in 2016 on general network improvements as well as fibre deployment in major urban areas. This improved our World Economic Forum (WEF) Network Readiness Index from 75th to 65th position in 2016.
This index measures the country’s propensity to exploit opportunity offered by Information and Communication Technologies (ICT) and their impact on its competitiveness. The ITU Development Index also improved slightly but constrained by usage and skills.
We also rely on the StatsSA General Household Survey that contains an in-depth analysis of local ICT statistics to meet these priorities and direct the much needed interventions.
This survey shows that we are making progress in broadband access but this access is skewed. For an example, the survey found that the City of Cape Town, eThekwini and Overberg district have the best access to landline at 43% while Alfred Nzo sits on the other end of the scale at 2%, followed by Greater Sekhukhune and Vhembe districts.
Pixley ka Seme, Namaqua and Central Karoo score the lowest, at 73%, on the scale for percentage of households with access to mobile phones.
City of Tshwane has the best score of 95%, followed by City of Johannesburg and Ekurhuleni.
The statistics also show us that the City of Tshwane, City of Johannesburg and the City of Cape Town have the best percentage of households with access to the Internet by type of access. Alfred Nzo District scores the lowest, followed by Amathole and Ukhahlamba districts.
Broadband
The open tender process by State Information Technology Agency (SITA) to find a service provide for the rollout of broadband in the eight priority districts unfortunately did not yield a successful bidder among those who participated, resulting in its cancellation in November 2016. We have since decided to utilise our state entities such as SITA, BBI and SENTEC, in line with their mandates, to implement this critical project. In the current financial year, we have been allocated R416 million to start connecting 2700 sites.
Cost to communicate
We are mindful that South Africans believe that “DATA PRICES MUST FALL.” According to 2017 StatSA Report, the ICTs contributes 3.0% to the GDP and constituted 4.6% of household expenditure.
Last year the Minister issued a policy directive to ICASA to prioritise the commencement and conclusion of an inquiry and the prescription of regulations to ensure effective competition in broadband markets. The response from the regulator suggests they will finalise this work in the next 2-3 years.
Furthermore, ICASA’s State of ICT Report seem to suggest a lack of competition, particularly by dominant players. The report indicates that data traffic increased by 55%, data revenue increased from R30 to R38 billion, the employment decreased by 4000, yet prices remain sticky at same level.
This situation may need the attention of the Competition Commission. We appeal to operators start competition in services to ensure the cost of data and voice calls falls to affordable levels or below 2% of average household income.
Corporatisation of the Postbank
The corporatisation of the Postbank is one of Government’s vehicles to facilitate financial inclusion in the underserved areas.
This process is progressing well. Some of the key successes include the following;
- In March 2017, the first Postbank board was appointed after a rigorous fit and proper assessment.
- In April 2017, the South African Postbank SOC Ltd company was registered and incorporated with the Companies and Intellectual Property Commission (CIPC)
- Most of IT capabilities have already been implemented
- Key appointments in internal audit, regulatory and risk management positions have been made.
Our efforts are now concentrated in resolving the structure of the Bank Controlling Company as well as resolution of the legislative conflicts around the definition of a public company by aligning the Banks Act to the Companies Act.
SAPO is ready to use the Postbank to assist SASSA to take over the payment of social grants as directed by the court.
Progressive Partnerships
Over the past 12 months, the department has invested significant resources to build and strengthen relationships with all stakeholders in the sector in the realisation that only a collaborative effort will propel the country forward. The forums and councils that we have established are helping us to consult as we seek to increase trust amongst stakeholders and work on the implementation of our programmes.
We are humbled by the level of support we have received from citizens, workers, non-governmental organisations, academia, business, Developmental Finance Institutions, traditional leaders, the SA Local Government Association (SALGA), BRICS countries and other international partners that include the World Economic Forum (WEF). Ms Elsie Kanza, Head of WEF Africa, has graciously joined us this week.
All the stakeholders are working with us because all acknowledge that the internet is the great tool for advancement and development of our time and that we need to bring everybody on board to avoid creating new digital divides or widening existing ones.
These partnerships are helping us to press ahead with the following;
Internet For All
This is a partnership with WEF and all social partners to connect 22 million South Africans to the internet by 2020. It focuses on extending ICT infrastructure to underserved areas, lowering the costs of being online and cheaper gadgets, digitising local content and providing ICT and digital skills.
This partnership has youth ambassadors who ensure that the interventions address challenges faced by the youth and to help with the awareness.
Yesterday, we held an industry engagement wherein stakeholders pledged to train millions of young South Africans in various digital skills over the next few years. The department has set up a secretariat to co-ordinate all these training initiatives and monitor and track their implementation.
Next month, we shall launch the Internet For All South Africa Steering Committee that will jointly identify areas of highest need and marshal resources to provide skills in those areas.
The outcome we seek from this is to give people digital skills that will enable them to redefine their future and that of generations to come. This is also an opportunity for the private sector to invest in their future by preparing future users of their services.
Policy issues
This is one of the areas where partnerships and continuous engagements have laid solid foundations for our leap forward as a country.
As many of you know, Cabinet approved the National Integrated ICT Policy in September 2016. Since then, the department has held several engagements will all the stakeholders on the implementation of the policy.
There is general agreement with the thrust of the policy and the need to implement it without delay. Most of discussion focus on how best we implement Wireless Open Access Network (WOAN) and the allocation of and the return of the high demand Spectrum.
Following the last meeting with the stakeholders that was held on Friday, 19 May 2017, the following approach was agreed to;
- There may be no urgency to return the current high demand spectrum from licensees until the end of current licence period to ensure investment certainty
- In return, the licensees committed to buy at least 30% of the existing capacity of WOAN to ensure its viability
- In view of current levels of investment on the 4G network, the Minister committed to conduct an urgent high level study to determine if WOAN will utilise all high demand spectrum for 4G network. If there will be remaining spectrum it will be licenced to operators with rural coverage obligations. In such case the licensees further committed to buy at least 50% of WOAN capacity.
It is important to realise that without WOAN, the new entrants particularly black entrepreneurs and SMMEs will find it impossible to enter this industry. In the next few months we intend to finalise the Implementation Plan.
Implementation of the Policy
In order to give effect to the policy implementation, the department has drafted some of the Bills that will be brought to Parliament after following due processes and consultations. At the moment, the department is consulting other government departments.
We have also developed strategies that will help us improve the usage and uptake of ICT in the country. As of today, the department has visited four provinces to seek inputs on the National e-Strategy, National e-Government Strategy and the ICT SMME Strategy.
Cybersecurity
We are appreciative of the healthy partnerships we enjoy with stakeholders in this critical area of our work. These partnership are helping us to increase the confidence among South Africans in the use of the internet and raise awareness about the dangers of cyberspace.
An initial upgrade to the Cybersecurity Hub’s website was concluded in the last financial year, which included the ability for the public to report incidents and the provision of awareness information.
The Cybersecurity Hub is continuously monitoring cyber threats, including the recent cyberattack.
For media enquiries please contact:
Siya Qoza
Cell: 082 898 1657
E-mail: Siya@dtps.gov.za
