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SA: Padayachie :Budget vote speech by the Minister of Communications, in the National Assembly (31/05/2011)

31st May 2011

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Date: 31/05/2011
Source: The Department of Communications
Title: SA: Padayachie :Budget vote speech by the Minister of Communications, in the National Assembly

 

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The Honourable Chairperson,
Honourable Members of the House and Members of Cabinet present,
Honourable Deputy Minister of Communications, Mr Obed Bapela,
Chairperson and Members of the Portfolio Committee on Communications,
Chairperson and Members of the Select Committee,
Distinguished guests from the ICT sector,
Ladies and gentlemen.
Elections are an absolutely lucid moment in the march of a nation’s history. The marvellous thing about this is that it takes you closer to the people. It is when the truth is there for all to see.
It is an honour for me to deliver my first Budget Vote of the Department of Communications for the financial year 2011/2012, two weeks after the most successful local government elections ever held in this country.
The amazing part of all of this is that some sections of the media celebrated the increase in the DA vote rather than the fact that the elections were won by the ruling party by a 62% victory. We, in the ANC, under the leadership of President Zuma, are absolutely inspired by the confidence that the masses of our people placed in the ANC to continue to lead the nation and the building of democracy in South Africa.
As we move towards the celebration of 100 years, charged with this mandate by our people, we are neither triumphalist nor boastful. Years of commitment to the cause of our people have instructed us to remain humble, to improve on our short comings and to ensure continued service delivery to our people. We are humbled by this confidence. We also take this opportunity to congratulate the DA on having improved on its showing nationally. We trust that, as we accept our victory with humility, you will graciously accept your defeat with dignity.
The overwhelming participation in the local government elections was made possible by the unprecedented use of electronic communications services. This includes the role played by the SABC, e-TV, our Community Radio Stations, as well as Sentech and ICASA, in taking the elections to the people through technology. In 2010 the Human Sciences Research Council published a study, which indicated high levels of public confidence in the SABC and satisfaction in the SABC as a disseminator of information.
In the build up to the elections, millions of voters checked their registration details using mobile phones and millions of messages were distributed over our electronic communications networks. Many compatriots, including political parties accessed social media such as facebook and twitter via mobile phones, laptops, smart phones, intelligent pads and other technology innovations expressing their views about the elections. The use of these technologies demonstrated our growth and development in the realm of e-democracy and e-participation.
President Zuma’s first tweet reads: “Democracy is flourishing in South Africa, thanks to the active participation of all citizens. It’s wonderful. Vote 18 May!”
Honourable Chairperson,
This Budget Vote presents our programme building on the foundation that has been laid during the past seventeen years. In the future we will in time make it possible for every South African to access and use information and communications technologies as we shape our country towards an inclusive, people-centred information society.
We are committed to working faster, harder and smarter in ensuring that we take technology to the people in service of the people.
A few days before the local government elections, I launched various service delivery projects in several rural areas amongst others, Ndwedwe, Nongoma, Impendle, eSikawini, and Msinga in KwaZulu-Natal and Mitchell’s Plain in the Western Cape. In Ndwedwe and Nongoma, we introduced cyberlabs to the communities and schools, demonstrating that through the power of ICTs we can help our learners to realise their true potential and improve their lives. In Msinga, we switched on a low power transmitter which for the first time allowed Gogo Khumalo to watch SABC’s Izindaba and listen to uKhozi FM.
Bringing the joys and benefits of radio and television creates value for the community. It means accessing news in IsiZulu to a Gogo, to a school going learner it means access to educational content using a computer to experience the Internet for the first time; and to the Bambino it means learning through Takalani Sesame. I was encouraged by the way these communities and learners in particular enthusiastically demonstrated their eagerness to embrace technology to improve their livelihoods.
Honourable Chairperson,
Digital Growth Opportunity
Since 2007, the ICT market has grown by over R131 billion to R179 billion in 2010. It is estimated that the sector will grow to R187 billion in 2011, with an estimated figure of R250 billion by 2020. This growth will be driven by the rapid uptake and usage of data and applications-driven mobile communications.
To achieve this growth target, we will implement several interventions to address the cost to communicate, access to electronic communications infrastructure and reduce barriers to entry to promote competition in the sector. We will further introduce in this House, amendments to the Electronic Communications Act.
While mobile communications continues to experience unprecedented growth rates, Internet connectivity to the home remains low. Many South Africans still rely on broadband services at their place of work to access the Internet, hence broadband penetration stands at approximately 5% of the population.
Current research indicates that under conditions characterised by high cost of services, saturation in urban markets and limited access in rural areas, the rate of expansion of the Internet in South Africa will decline from above 15% to 10% per annum by 2015. This projection envisages 11.3 million Internet users by 2015, which is approximately 22% of the population.
To address this deficit, we will work with key stakeholders which includes organised labour, civil society and academia, towards the development of a shared Vision 2020, for the country.
To consolidate partnerships within the sector, we established an industry working group comprising representatives from the top 30 ICT companies operating in South Africa tasked with strengthening partnerships between Government and its social partners. 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.
Honourable Chairperson,
New Digital Landscape
We are commencing with a new broadcasting landscape. In December 2010, Cabinet reaffirmed its decision to adopt the DVB-T standard for the process of digital migration. Accordingly, Cabinet adopted the preferred standard of DVB-T2, an upgrade of DVB-T and agreed to December 2013 as the new switch-off date, with a view to allow the period between 2013 and 2015 to address any challenge that may arise towards the ITU deadline (of 2015).
In light of all these developments, the Department will implement interventions to ensure that South Africa migrates to digital broadcasting by 2013. Significant progress has already been made in implementing the Broadcasting Digital Migration Policy for South Africa.
A successful trial conducted by broadcasters and the signal distributor has demonstrated that South Africa is ready with the process of migrating from analogue terrestrial television to digital terrestrial television using the adopted DVB-T2 standard.
Substantial work has been done by Sentech in upgrading its broadcasting infrastruture from the existing DVB-T to DVB-T2. By March 2011, Sentech achieved 60% population coverage on the DVB-T2 standard. The uptake of digital broadcasting technology will expand the public bouquet in content viewing, for example, increase the number of channels from the current 3 SABC channels to over 10. These additional channels will provide an opportunity for the growth and transformation of the local content development industry.
We expect the South African Bureau of Standards to finalise the second generation DVB-T2 standard during the last quarter of 2011.
The set-top box (STB) manufacturing strategy and the scheme for the framework for ownership support will be submitted to Cabinet in August 2011. We are consulting widely with industry and relevant stakeholders towards finalising this process. This will pave the way for us to select the preferred STB manufacturers for the subsidised market by November 2011 and deploying the necessary infrastructure for the distribution of the subsidised STBs.
The manufacturing of subsidised STBs will commence following Cabinet approval. With regard to the unsubsidised STB market, manufacturing will begin once the SABS standards process is concluded. We anticipate that the digital terrestrial television public launch will take place in April 2012.
Sentech will, in June 2011, switch-on the first DVB-T2 test transmission at the Brixton tower in Johannesburg, targeting townships and informal settlements around the Johannesburg metropolitan area. By end 2012, Sentech will have upgraded the existing infrastructure to DVB-T2, to cover 80% of the population. We intend to achieve 100% population coverage by the end of 2013 to enable analogue signal switch-off.
Working together with all broadcasters and signal distributors, an integrated DTT project implementation plan has been developed and will seek Cabinet approval in August 2011. Due to the complexity and the magnitude of the digital migration process, we have decided to establish a dedicated Digital Migration Project Office to be located within the Department to drive the DTT implementation plan.
Honourable Chairperson,
Broadcasting Policy Review ushering in the new digital environment
The process to review the current broadcasting policy landscape will commence with great urgency. We will in the coming three weeks launch the Broadcasting Review Process. This process will amongst others inform the interventions to be implemented in order to position the public broadcaster in the new digital environment. We will also use this opportunity to investigate an appropriate funding model for the SABC to ensure that the provision of public service remains the SABC’s main priority.
To fast track this process and to broaden the base of participation in this effort, I will constitute a panel of experts to assist with the policy review. This panel will advise on various policy issues, including embracing convergence and new media services, the creation of an enabling licensing and regulatory environment, the growth and development of local content industries, and the role of the three-tier broadcasting system – public, commercial and community broadcasting.
Community Broadcasting
Community broadcasting remains a critical project for the Department and will remain on our radar screen for years to come. R10 million has been allocated to support the development of content by community radio stations. During this year, we will provide broadcasting infrastructure to fifteen (15) community stations and R6 million has been allocated for this purpose. We will implement measures such as setting aside frequencies for community broadcasting, in particular Community TV, aimed at promoting the growth of this sector. A study is being conducted to develop a sustainability model for Community Radio Stations and TV. Informed by the outcome of the study, we will investigate the possibility of increasing our contribution to the sector to meet our goal of one municipality one community radio station.

Honourable Chairperson,
Expansion of SAPO network to serve the wider South African Community
Technological changes and advances in forms of communication such as e-mail and social networking are placing an increasing pressure on traditional forms of communication world-wide, especially postal services. The Post Office is expanding the use of this infrastructure to make it available to the wider SA community. In particular, focus areas include:
- Education: Delivery of textbook and stationery consignments to all schools in the country;
- Health: Movement of anti-retroviral and other medicines to all clinics and hospitals across the country;
- Home Affairs: Delivery of ID documents and passports to the wider SA community;
- Security Forces (SAPS and SA National Defence Force): Delivery of uniform consignment and
- Transport: Renewal of vehicle licences.
R180m has been allocated for the distribution network of the Post Office to be expanded to ensure the inclusion of rural communities into the mainstream of the country’s activities and economy. The SAPO will further be setting up new outlets in needy communities.
PostBank – addressing financial inclusion
The vision of PostBank is to provide a national banking system that delivers stable, accessible and dependable services to the public and small businesses. It stands to be one of the best guarantees underpinning economic resilience, promoting financial inclusion and allowing people and businesses to invest and save with confidence and security.
The PostbBank Act was signed into law in December 2010. This will allow SAPO through the PostBank to prioritise the banking needs of the unbanked majority, thus facilitating their inclusion into the economic mainstream. The South African Post Office Bill, which provides for the corporate governance framework for the Post Office, is being deliberated in Parliament. Work is underway to establish the Post Bank as a standalone subsidiary of the Post Office. We anticipate that in the course of this financial year, the Postbank will apply for a banking licence in terms of the Banking Act of 1990. The due diligence process to separate the assets of the Post Office and Postbank is currently underway and is anticipated to be finalised by the end of the financial year.

Honourable Members,

Broadband infrastructure and services
ICT infrastructure is a basic foundation for economic competitiveness. Government has during the last few years increased investment in infrastructure to create jobs and stimulate the economy. Government will accelerate broadband infrastructure spending.
In this regard, an initial R450 million, over the MTEF period, has been allocated for the provision of Broadband services. An integrated broadband implementation plan, which will harmonise various broadband related initiatives, will be finalised in the current financial year.
Sentech and Ethekwini Municipality are in discussions to create an intelligent city as part of our focus on providing broadband services in urban areas. This will allow for Internet-based Government services that enable ubiquitous connectivity to transform key government processes both internally to improve efficiencies and externally to improve service delivery to the people.
Honourable members,
Optimising frequency spectrum to provide more services to the people
Radio frequency spectrum is a strategic natural scarce resource at our disposal to effect changes in the provision of electronic communications service at a faster rate. The Department of Communications, in partnership with ICASA, will therefore conduct a radio frequency spectrum audit to ensure effective utilisation of scarce resources, covering all bands, contained in the national frequency plan.
Licensed entities unable to account for their use of the allocated radio frequency spectrum may forfeit their rights in terms of the law. We are prepared to amend the law to ensure efficient utilisation of the radio frequency spectrum.
We intend to issue a Policy Direction to ICASA to conduct a review of the Digital Dividend, which is the spectrum to be freed by the digital broadcasting migration process. The digital dividend will result in the licensing of further communications services such as mobile TV, High Definition TV, public emergency services and additional standard definition TV.
In terms of the radio frequency spectrum licensing, the new radio frequency spectrum policy trajectory will consider allocating parts of the high demand radio frequency spectrum towards accelerating development of rural connectivity. We will also ensure that our licensing framework balances the needs of the big and smaller entities.
Honourable members,
Job creation and rural development
During the State of the Nation Address, the President highlighted job creation and rural development as amongst the key priorities of Government. Given the strategic role of ICTs as enablers of growth and development, work is underway to identify tactical interventions to unleash this potential. Our interventions will combine work being done by industry. The role of the Department and state entities will be to address identified market failures particularly in the provision of universal service and access.
The Department is currently finalising the ICT Rural Development Strategy to determine priority under-serviced areas and accelerate the provision of Universal Service and Access through integrated government interventions.
As per the target set out in the New Growth Path, the Department together with the ICT sector, will facilitate the creation of over 150 000 direct and indirect jobs by 2020. Industry figures towards the contribution to job creation will be consolidated by the end of this calendar year. An industry-wide committee will be established to identify opportunities using a collective database to ensure effective monitoring and evaluation.
Jobs will be created across various sub-sectors of the industry through the provision of broadband infrastructure, establishment of content hubs for radio and TV, animation, e-cooperatives, uptake and usage of ICTs in FET colleges, tailor-made solutions for SMMEs, digital broadcasting, distribution of STBs and rollout of the PostBank.
The Department will leverage on the National Job Fund announced by President Zuma in his State of the Nation Address and the Minister of Finance. We will also engage the Development Finance Institutions to increase their support for ICT businesses and innovations, especially those ventures that are driven by SMMEs in rural areas.
Honourable chairperson,
State Owned Entities take technology to the people
State Owned Entities (SOEs) are the delivery arms of government. Sixty seven percent (67%) of the Department’s budget is transferred to SOEs. Stabilising SOE Boards and improved monitoring and compliance is crucial for ensuring that SOEs deliver on their mandates. In our efforts to strengthen corporate governance within our public entities, work is underway to review and strengthen our capacity to conduct oversight.
At Sentech, the newly appointed Chairperson, Board and Chief Executive Officer are showing remarkable commitment in working together to stabilise the organisation to fulfil its mandate. As part of our efforts to refocus Sentech to deliver services to the people, R279 million has been allocated to prioritise the rollout of digital broadcasting signal coverage to the entire country.
The SABC, remains a critical focus for us. We have made significant strides in stabilising the corporation. We will soon conclude the appointment of the remaining four (4) Board members. The announcement of the appointed Board members will be made by the President in the near future. The appointment of the Group CEO will be concluded soon.
The SABC has been allocated R84m to improve its technological capabilities and educational programming. Another R41m has been allocated to Channel Africa whose future role and social obligations will be discussed as part of the Broadcasting Policy review process. The SABC further intends to launch a 24 hour news channel on the free to air space which will contribute to the diversity of views in society.
We are engaging the SABC on the future funding required to facilitate the introduction of new digital channels which will be broadcast to the population on a free to air platform. The number of tv channels will increase from 3 to 10. We will continue to engage the SABC with regard to the implementation of their turn-around strategy.
A review of USAASA’s strategic direction in the provision of universal access and service is to be undertaken. This strategic repositioning seeks to transform USAASA into a Digital Opportunity Foundation and to remove the bottlenecks that have made it difficult for us to exploit the Universal Service and Access Fund. We will engage USAASA to set out the new strategic direction which will be presented to Parliament as we advance into the next financial year. USAASA will also play a role in the delivery of digital broadcasting and an initial R690m over the MTEF period is allocated for the subsidisation of STBs to the poor TV-owning households.
Specific focus will be given to ICASA to increase its capacity to regulate a fast changing technological and market environment. In June 2011, we will present the performance management system of ICASA Chairperson and other councillors for deliberations in Parliament. We will also review the current ICASA Act to, amongst others, introduce a new funding model for ICASA so as to strengthen its capacity to regulate the sector.
In the current financial year, R313 million has been allocated to ICASA to cater for operational and project expenses. ICASA will pursue further liberalisation of the Pay TV market by issuing new television licences.
Commercial radio services will also be licensed in the Free State, Eastern Cape and the Northern Cape following the licensing of similar services in Limpopo, Mpumalanga and the North West in 2007. ICASA will soon announce the successful bidders for the commercial radio licences in Gauteng, Cape Town and Durban.
Honourable chairperson,
e-Skills
ICT skills and the capacity to use new technologies remain a pre-requisite for effective participation of citizens in the Information Society and knowledge-based economy. This will create opportunities for employment and wealth creation by using new electronic communications services.
Notwithstanding the ongoing efforts of various stakeholders, we remain challenged by an alarming skills deficit across society. To address the e-skills deficit, the department is currently incubating the e-Skills Institute which will act as a clearing house for e-skills initiatives in the country, in partnership with other stakeholders, including universities. Our medium term plan is to establish a standalone e-Skills Institute (e-SI).
We have established five (5) Provincial e-Skills Knowledge Production Hubs at partnering universities which will better coordinate and invigorate all e-skill related activities. We have also established a National e-Skills Research Network (ReSNES) to ensure that the e-skills interventions are based on sound evaluative principles. We have also developed a National e-Skills Plan, adopted at the first e-Skills Summit held in July 2010.
The e-SI shall, through the roll-out of its programmes, deliver e-Skilled practitioners, users and information society knowledge workers.
Honourable chairperson,
International development agenda
ICTs have changed the traditional boundaries between and among countries globally. Therefore, our interventions to take technology to the people continue to be influenced by developments in other parts of the world, especially in the African continent and the SADC Region. Accordingly, we will continue to participate in efforts to harmonise ICT policies in Sub-Saharan Africa, especially within the SADC Region.
In June 2011, the SADC Ministers responsible for ICTs and Postal services will inaugurate the new Regional Association of Regulators which will act as an implementing body of the decisions of the Ministers. This follows the merger between the regional telecommunications and postal regulatory institutions, SAPRA and CRASA. Honourable members, allow me to take this opportunity to congratulate the regulator, ICASA, for having been chosen as the first chair of the new entity.
Together with other developing countries, we will continue to advocate for an equitable global ICT environment through participation in the ITU and other global forums.
Work is underway to prepare for our participation in the upcoming ITU’s World Radio Conference to be held in 2012. With regards to the AU, we will support the implementation of the Connect Africa goals through the prioritisation of infrastructure services that will facilitate direct communications between and amongst African countries. Integrated infrastructure development is crucial to Regional and Continental integration as part of the agenda of the African Union and the Regional Economic Communities, such as SADC.
Honourable chairperson,
We are on track
During November 2010, we made the point that it was absolutely necessary to transform the Department from its past culture and work ethic. I am pleased to report that we have made sufficient progress in turning around the Department for the better.
I, therefore have pleasure in announcing the appointment of the Director-General of the Department of Communications, Ms Rosey Sekese, effective from 01 June 2011. I wish her well in her new role.
Thanks and appreciation
I wish to thank Dr. Harold Wesso who contributed immensely towards the current stability in the Department, during his tenure as the Acting Director-General.
Allow me also to express appreciation to the Chairpersons and CEOs of the public entities reporting to the DoC and leaders of the ICT industry who have enthusiastically come on board to partner with the DoC.
To the Deputy Minister for his support, and to the Chairperson and Members of the Portfolio Committee on Communications for their guidance and support.
To my own staff for their valuable and unqualified support.
And to my family for bearing the pains and trauma of the past seven months.
I invite Honourable Members to approve the Budget Vote No. 27 of the Department of Communications.

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