Media statement on the priorities of the Department of Telecommunications and Postal Services that are contained in the 2018/19 Budget Vote
"Building the 4th Industrial Revolution Army"
Thank you for honouring our invitation to engage with us ahead of our scheduled 2018/2019 Budget Vote speeches for the Department of Telecommunications and Postal Services.
We meet on this day when the world is celebrating the World Telecommunication and Information Society Day.
The theme for this year is "Enabling the positive use of Artificial Intelligence (AI) for All" which focuses on the potential of Artificial Intelligence to accelerate the United Nations' Sustainable Development Goals. We join other nations in these celebrations as our country is also preparing to be significant player in the Fourth Industrial Revolution of which AI is one of the important pillars.
To this end, the department's R923 million budget focuses on key interventions that we shall pursue this financial year as the Government continues to increase the usage of Information and Communication Technologies (ICT) to facilitate socio-economic justice and inclusion, attract investment, improve competitiveness, transform the sector and prepare South Africans for the Fourth Industrial Revolution.
We shall continue to work with all relevant stakeholders to achieve these goals. These consultations have resulted in growing certainty in the sector as evidenced by the continued investment by both Government and the private sector. This is in line with President Cyril Ramaphosa's call for all of us to lend a hand in attracting investments in South Africa.
In September 2016, our government finalised the National Integrated ICT Policy White Paper after extensive consultations with all stakeholders. We are incrementally implementing this overarching policy which seeks to future proof South Africa in terms of technological advances.
In December 2017, we finalised three critical strategies to facilitate the implementation of the policy. These are the ICT SMME Development Strategy, E-Government Strategy and the National E-Strategy.
The ICT SMME Development Strategy seeks to accelerate the development, growth and sustainability of small and medium enterprises in the ICT sector with the objective of job creation and economic inclusion. It aims to increase the uptake and the use of ICT by all small businesses to improve their profitability and competitiveness. It also introduces interventions to remove non-financial barriers to entry.
In this financial year, we will support partnerships for incubation of ICT start-ups, business linkages and capacity building. For example, State Information Technology Agency (SITA) will spend 40% of ICT acquisitions on small businesses.
We will also open opportunities for 60 local and African ICT SMMEs to showcase their innovations at the 2018 ITU event.
The E-Government Strategy is our guide for the digital transformation and modernisation of the public service with the aim of improving service delivery to our citizens. This year, SITA will develop and strengthen its interoperability platform, finalise the development of the National e-Services Portal and deploy 50 e-services in line with the needs of client departments.
Cabinet has approved the framework for the repurposing and repositioning of SITA to deliver service to government in a reliable, efficient and cost-effective manner. Part of SITA's transformation include rooting out corruption in the procurement environment. We support their efforts against corruption and we call on them not to be intimidated by rogue employees and their corrupt business associates.
The National E-Strategy seeks to prepare South Africa for fundamental changes, opportunities and challenges brought by the Digital or Fourth Industrial Revolution. The strategy rests on pillars of skills development, innovation, investment in efficient networks and expediting the uptake of e-government services.
In his State of the Nation Address, President Ramaphosa emphasised that "Our prosperity as a nation depends on our ability to take full advantage of rapid technological change... we will soon establish a digital Industrial Revolution Commission."
To take this commitment forward, we are working closely with the Presidency and other departments to establish this Council which will be a national advisory body comprising of government, private sector and civil society. The Council will be our national response to developing an action plan and interventions to leverage on the benefits of the Fourth Industrial Revolution.
The Digital Development Fund Bill will be taken to Cabinet this year for approval for public consultations to commence.
The fund will play a major role towards the realisation of a connected South Africa and support the development of ICT SMMEs.
Cabinet approved the iNeSI Bill which has been submitted to Parliament.
In the second quarter of 2018 we will submit the ECA Amendment Bill to parliament, with the following objectives:
Address the impact of high levels of concentration and ineffective competition,
Address enabling provisions for Wireless Open Access Network (WOAN) and rapid deployment of telecommunication infrastructure
Cost to communicate
Our cost to communicate programme is progressing well. In August 2018 the Competition Commission is scheduled to release its final report on its market inquiry. In June 2018, ICASA is scheduled to release the findings of its Priority Market Study which should list markets prone to ex-ante regulation and priority markets to be subjected to market review processes.
We have urged ICASA to prioritise broadband data market because Data Must Fall and we must work together to achieve this goal.
In this financial year, we are prioritising the operationalisation of the National Rapid Deployment Coordinating Centre comprising of representatives from all spheres of government and industry.
Gauteng and KwaZulu-Natal provinces are leading in facilitating this developmental approach to broadband deployment. Gauteng will launch its pilot with Emfuleni Local Municipality. KZN Provincial Government is utilising its coordinating structure with municipalities to coordinate rapid deployment. We will soon finalise the MOU with SALGA.
The Centre will, amongst others, establish a common automated wayleave application system, create a geographic mapping information database of all fibre and other electronic communication network facility deployments.
In short, it will assist network providers to reduce costs and time for deploying their telecommunication infrastructure.
We hope the savings the operators make on their infrastructure rollout expenditure will be transfered to consumers.
We continue to support the provision of subsidised/free public Wi Fi to provide poor citizens access to basic internet.
14 primary health care facilities and 89 public schools, have been connected at Mhlontlo Local Municipality.
In the King Sabata Dalindyebo (KSD) Local Municipality, 25 primary health facilities and 204 schools have been connected.
An additional 277 sites are scheduled to be operational by the end of June 2018.
This year, USAASA will rollout broadband infrastructure for Ngquza Hill and Port St Johns Local Municipalities; thus completing the OR Tambo District Municipality rollout.
The network infrastructure in Impendle is being rolled out.
Last year we consulted widely on the implementation of the ICT White Paper and found a consensus on a way forward in relation to the scarce high demand spectrum. The current telecoms companies licenced with high demand spectrum appealed not to return it until the end of the licence period in 2027/28.
In return they committed to buying at least 30% of WOAN capacity. In addition, they also asked us to conduct a study on the actual spectrum need of a sustainable WOAN based on the fact that in the last two years, the industry had invested significantly in the 4G/LTE networks. They further appealed that if the study indicated that there would be spectrum left, it be licensed to reduce current capacity and congestion challenges.
In return they committed to buying up to 50% of WOAN capacity, depending on the additional spectrum licenced to them. The CSIR was commissioned to conduct this study and it has concluded it. The outcome of the study is in the Cabinet process for consideration and approval and will be published after the conclusion of the Cabinet process.
State of broadband
The 2016 StatSA General Household Survey reported a national household internet usage of 59.3%, mainly accessed through mobile devices.
The cost of data in South Africa is still relatively high. ICASA's State of ICT Sector 2018 Report suggests some worrying trends about duopoly market dominance;
Operators with a large market share charge us more for services than small operators.
Some dominant operators charge South Africans eight times more per data bundle than their bundle cost in other African countries.
Poor people pay more for data bundles than the rich. A poor person who can only afford to purchase 50 megabytes (MB) pays 50 cents per MB while a customer who can afford to buy 20 gigabytes, pays only 4 cents per megabyte.
The Report also showed that 3G coverage reached 99% of the population and the 4G is at 77%.
However, not all those who are 'covered' have access to or are using internet, as only 59.3% of South African households have access to internet.
Last month, ICASA released the final regulations on the end user and subscriber charter regulations addressing the following:
All licensed operators must now send usage notifications to customers at regular intervals of usage to assist them manage and control spend on voice, SMS and data services,
The operators must allow customers to roll over their unused data, i.e. no data expiry
The operators must allow customers to transfer data to other customers or relatives on the same network
The operators are no longer allowed to automatically charge customers at expensive out-of-bundles usage rates without their specific permission. This will enable customers to top up their bundles.
We welcome these interventions as they can contribute in making the costs of data more affordable.
Despite the recent constrained economic environment, the ICT sector has been growing, demonstrating investor confidence in our economy. The ICASA Report also revealed that; In 2017 the employment numbers increased by 2.2%
The total revenue increased by 9.1% from R187 billion to R204 billion. Of particular note is that Pay TV revenue increased by 21.2%, telecoms by 10.2%, while postal revenue declined by 0.6%, and
The total telecommunication investment increased by 41.9% in the last three years.
Broadband Infraco (BBI) and SITA were mandated to implement phase one of broadband rollout in order to overcome delays in the procurement process. In 2018 we shall focus on connecting 570 sites, of which 327 will be completed by end of June. In this financial year, BBI will expand its fibre network by a further 1000km and increase its Points of Presence (POPs) to 176.
SENTECH will conclude its business plan and funding model for a South African owned communication satellite by building on our national capabilities and partnerships. The aim will be to reduce our current leasing costs to government and build our technical skills.
Digital technologies and financial services offers new opportunities for the SA Post Office (SAPO). We are partnering with the Universal Postal Union (UPU) to make SAPO one of three e-Commerce hubs on the African continent. This will assist our SMMEs to create digital platforms which enable them to trade in the global market.
Facilitating financial inclusion through the corporatisation of the Postbank remains one of our key priorities.
The milestones we have achieved so far are;
On 26 June 2017, we lodged the banking license application with the South African Reserve Bank, in terms of section 16 of the Banks Act.
We have finalised the options for establishing the Bank Controlling Company.
What needs to be finalised is the alignment of Banks Act with the Companies Act by the National Treasury.
The Postbank has replaced Cash Paymaster Services (CPS) in providing the electronic payment solutions to SASSA for social grants. They are also responsible for the production of the new cards which are replacing the old SASSA cards as well as CPS /Grindrod cards.
SAPO and SASSA will make it easy for beneficiaries to obtain new cards free of charge at pay points as well as SAPO and SASSA offices. We plan to conclude this card replacement process by August 2018. Of note, this new card will offer more benefits to recipients and reduce unfair deductions.
The SA Post Office has committed to assist the Independent Electoral Commission to roll out 3.5 million addresses before the 2019 general election. This project is on track and gaining momentum as almost two million addresses have been rolled out to date. SAPO is on course to complete this undertaking by the end of this financial year.
SAPO is also assisting USAASA in the DTT project by processing registrations and distribution of Set-Top-Boxes (STBs). Registrations stands at over 680 000 while over 350 000 have been issued. We encourage all poor households to go and register for free STBs in order to get a clearer digital TV picture and help us complete migration from old and outdated analogue TV by 2019.
The social contract between the Government and the people on the provision of sustainable services is underpinned by the payment for those services. We are concerned about the non payment to SENTECH by the public and community broadcasters.
We are working with the Minister of Communications, Honourable Ms Mokonyane, ICASA and the Media Development and Diversity Agency to find a lasting solution to this challenge which is threatening the sustainability of SENTECH.
The delay in Digital Terrestrial Television (DTT) Migration is costing SENTECH about R150 million per annum in dual illumination. We need to finalise the digital migration next year in order to release spectrum to telecommunication network providers as directed by the ITU.
Internet For All
The Internet For All SA is the programme we formed last year in partnership with the World Economic Forum, public, private and community organisations.
In the past year we established the secretariat, with the kind secondment from MTN. Progress made includes;
The CSIR and ICASA are carrying out internet infrastructure gap analysis mapping.
SENTECH, Intelsat and Didusec began a pilot connectivity project in Alfred Nzo District Municipality which is now being expanded to the following municipalities; Amathole, Ukhahlamba, Sekhukhune, OR Tambo, Umzinyathi, Sisonke, Dr. Ruth Mompati, Chris Hani, Pixley ka Seme and Vhembe. This infrastructure project is premised on supporting local entrepreneurs' kiosks to provide affordable internet connectivity services to the local population.
The South African Central Registry has commenced with the translation of Wikipedia content to all South African languages beginning with Xhosa and SiSwati for learners in Eastern Cape and Mpumalanga Provinces.
International engagements and partnerships
In 2017 South Africa became the chair of SADC. We hosted the SADC Minister's Meeting which adopted a roadmap to prepare the region for the Fourth Industrial Revolution. Our regulators are making progress in the SADC Roam Like at Home Initiative.
Last year we joined the Smart Africa Alliance where we are championing localisation and digital skills development. Smart Africa is also driving the One Africa Network to reduce costs, harmonise infrastructure deployment regulations, interoperability and common roaming arrangement across the continent.
On 10 - 13 September 2018 we will be hosting the ITU Telecom World in Durban focusing on alternative ways to deploy affordable infrastructure, showcasing African capabilities in IOTs and next generation networks.
The key legacy projects of this conference will be SMME development and the establishment of an African Centre for the Fourth Industrial Revolution in South Africa. This center will assist with research, innovation and conformance standards testing to enable us to be competitive participants on the continent.
The ITU conference will be followed by us hosting the BRICS ICT Ministers Meeting on 13-15 September in the same venue in Durban under the theme "Advancing Growth and SMME Participation.
In October/November 2018 we will attend the ITU Plenipotentiary Conference in Dubai which will approve spectrum for 5G Networks. This conference is the supreme body of the ITU that meets every four years. South Africa is campaigning to be elected to the ITU Council and Radio Regulations Board.
Participation at the ITU Council and Radio Regulations Board will enable us to advance our national interests and champion the developmental agenda with other like-minded nations.
A youth-targeted hackathon was conducted during Govtech 2017 and a locally developed Business Intelligent tool is now operational.
Furthermore, we have developed the cybersecurity National Skills Framework which will be formally adopted in this financial year.
We have also developed the Cybersecurity Awareness Portal, which is a repository for all Cybersecurity Awareness materials and programs.
The 2017 cybersecurity readiness survey was conducted. Its report provides a baseline understanding on national cybersecurity readiness and identifies interventions that need to be undertaken to improve the country's threat posture.
This year, we will focus on monitoring the increased service offerings and operations of the Cybersecurity hub, developing local cybersecurity tools and on interventions that harness the cybersecurity SMME sector.
On e-skills, NEMISA has trained over 7500 people on various ICT skills.
In partnership with three universities, SENTECH is also developing skills in preparation for the 4IR. The entity has also established a research and innovation group focusing on developing new solutions for customer problems.
The department collaborated with .zaDNA to offer an Internet Service Provider (ISP) training programme to 396 young people in rural and peri-urban communities.
Furthermore, zaDNA has developed an integrated system that enables CIPC users to reserve .ZA domain names at the time of registering companies. To date, more than 1000 domain names have been registered through the CIPC platform.
Lastly, the e-skills summit was held in Mpumalanga in March 2018. This year, we shall finalise a 2-year National e-Skills Plan of Action (NeSPA) document as a result of this summit.
We will embark on an extensive skills development programme aimed at training one million young people by 2030 on the following data science skills:
Cloud computing; and
This year, NEMISA will facilitate ICT training for over 7000 people.
Through .zaDNA, we will train 155 youth throughout the country and 20 in two correctional facilities on ISP, which involves selling website address.
In building the 4IR army, we will together with our partners, implement programmes targeting women, children, people with disabilities and SMMEs. These include digital literacy training for 100 women per province and "Girls-who-Code" program, targeting 100 girls.
The B-BBEE ICT Sector Council
Lastly, The B-BBEE ICT Sector Council has the responsibility to monitor transformation in our industry. It produces the Annual Sector Report, assist companies to comply and regularly review the codes. The financial viability of the Council must be resolved as presently only the Department and NEMISA are contributing. The industry must also lend a hand by paying their contributions. I thank the members of the Council for the professional work.
Issued by: Department of Telecommunications and Postal Services