Issued by: Ministry of Communications
National Assembly, 22 May 2001
Madam Speaker,
Deputy President,
Honourable members,
Distinguished guests,
Colleagues and comrades
1. INTRODUCTION
I feel very honoured once more to stand before you and present the budget vote of the Department of Communications, Vote 25 for the 2001/2002 financial year.
A few years ago, this government embarked on a road of transformation, laying new foundations for a vision or images which today are being turned into true stories about real people.
The message we bring today is that the communications portfolio, which includes telecommunications, broadcasting and postal services, has at last seen the building, it had started, taking shape but not necessarily in the manner it envisaged, because of the rapid technological changes in our sector.
Broadcasting and Postal services have had to reinvent themselves as a result of the major changes in communication and information technologies. Important, however, is that we have kept to the national vision set by the President in his last two speeches when he outlined national priorities and called for "Unity in Action for Change".
This speech outlines how this portfolio faced the challenges posed and how future ones will be met. The imperatives posed by globalisation, the convergence of technologies and digitalisation, all in a short space of time, as well as the pressing need for Africa's renewal, have shaped our responses to the challenges.
As we embrace the new technologies it is important to recognise the technological innovations of our past provided by the Khoi and the San people whose superior communications and navigation skills depended on nature and their instincts. The experience of these indigenous people of our land shows that Africa is not new in the information and communication sector. We need to build from this strong historical heritage and play our role in technological systems development and innovations.
Our budget speech of 2001/2002 is based on the theme of this year: Unity in Action for Change. This for us means:
Unity in action between departments,
Unity in action between public and private sectors,
Unity in action between government and civil society
Unity in action between governments in Africa
Unity in action between Africa and the world
The budget is also based on a programme of action to bridge the global disparities through ICTs.
2. OVERVIEW OF THE PAST YEAR
2000/2001 programme:
Last year in our budget speech we outlined a number of tasks to be implemented in our portfolio. We promised to do the following:
Telecommunications
Rollout of additional telephone lines;
Extend infrastructure and services to schools, clinics and hospitals;
Review the mandate of the universal service agency;
Extend the web Internet laboratories;
Conclude the e-commerce green paper process
Broadcasting
Rollout community radio stations;
Extend the television footprint of the SABC;
Establish broadcast and digital advisory bodies;
Feasibility studies for a parliamentary and dedicated educational channel;
Restructuring of Channel Africa;
Develop an African strategy for SENTECH
SA Postal services
Increase postal outlets;
Integrate electronic communications and transactions into the Post Office;
Rollout of the Public Information Terminal (PIT);
Restructuring of the Post Bank;
Establish an international mail hub;
Rollout of addresses
International work
Set up the African Connection centre;
Make commitment to and participate in the implementation of the African Renaissance;
Regular meetings of the ministerial oversight committee of the ATU
While during the past year we made significant strides in policy development, universal access and restructuring, some of the programmes are ongoing. Parliament will be kept informed about the progress we make.
PROGRAMME AND BUDGET FOR 2001/2002
TELECOMMUNICATIONS
The telecommunications sector is important for attracting foreign and domestic direct investment and in contributing to economic growth and social development. I am happy to announce that the South African ICT sector remains stable irrespective of volatility in the world ICT markets.
Policy and legislation
Electronic communications and transactions policy and legislation
Developing a stable and predictable regulatory regime on e-commerce is central to our vision of catapulting South Africa into the knowledge economy.
Since 1998 we have been working together with other government departments, industry and civil society in the development of the e-commerce policy and law. In 1999 we published the Discussion Paper on e-commerce Policy for public discussion. Emanating from the input we received from the public and the outcome of the working groups, we developed a Green Paper, which was published for public comment in November 2000.
Subsequent to the launch of the Green Paper, in April 2001, we hosted the E-law conference to develop National Electronic Communications and Transactions Law to deliberate on issues, which should go into the Bill. The conference was a success as broader understanding was reached on key policy and legislative issues. These issues include:-
We are in the process of finalising the Electronic Communications and Transactions Bill, which will be tabled in this house before the end of this year.
Review of Telecommunications Policy and Legislation
In the last quarter of 2000 we started a process to review the telecommunications policy and legislation. This review was undertaken to reposition the South African telecommunications sector to ensure that it contributes to the development of the new economy, rural telephone access, development of SMMEs and skills.
To ensure effective stakeholder participation, we hosted a policy colloquium, in February 2001, which deliberated on a number of the 43 policy issues contained in the Telecommunications White Paper. Informed by the outcome of this colloquium, Cabinet took decisions, which formed the basis of the draft policy directions, gazetted for public comment. The policy focuses on bridging the digital divide; lowering input costs; increasing universal service and access; human resource development; black economic empowerment; and a stable and predictable regulatory regime.
This will culminate in the licensing of the Second National Operator (SNO), SMMEs, Sentech and Value Added Network operators (VANS) and pave the way for the necessary legislative amendments, which will be tabled soon.
To ensure the maximum utilisation of state assets to enhance growth we are proposing that Sentech's licence should be extended to offer long distance telecommunications and multi-media service and that Esi-Tel and Transtel should form part of the SNO.
This new policy and legislative environment will also pave the way for the initial public offering of Telkom because it provides certainty and predictability. Minister Radebe will elaborate on these developments in his budget speech.
Programmes
Public Emergency Communications Centres
Today we find ourselves in a situation in which many public emergency services operate technical and communications systems that are not compatible.
The South African public is in need of fast, effective emergency communications in order to address traffic, fires and other local emergency needs.
We cannot talk of efficient emergency communications while we use systems which are not linked to each other. To improve the situation Cabinet has accepted the establishment of a co-ordinated public emergency communications service.
The Department will establish a three digit (112) emergency number operated through nationwide accessible call centres and a national trunk radio network that will provide infrastructure to health, police, fire and traffic police emergency services.
Sentech has been mandated to lead the process of re-engineering the provision of a national radio trunking network. Early in May 2001 the department in conjunction with Sentech hosted a workshop which included local authorities and state agencies involved in the provision of public emergency communication services. Given the urgent need for a modern digital network, the process of defining user requirements for technical specification development and network design is being accelerated. Such a radio network will benefit emergency agencies, especially rural municipalities who lack the resources to establish such infrastructure.
R4.3 million has already been allocated to Sentech towards the establishment of such a system that we hope will ensure equitable access to infrastructure for all public emergency utilities, urban and rural.
For the establishment of public emergency call centres, as announced by the Minister of Finance, R80 million will be made available over three years. This centre will be established this year.
Smart Card
In the quest to bridge the digital divide the Department of Home Affairs and the Department of Communications are engaged in a process of ensuring that all South African citizens are part of this information revolution by ensuring that they use the smart card as a form of identification and storing of government information such as pension details, driver's licence and other personal information. This long term programme will enhance Batho Pele as people will be able to interface with government in a more effective and friendly manner.
Development of AIDS Portal
The Department of Communications in consultation with the Department of Health will develop a portal that will help create a network that will facilitate a partnership between the private sector, NGOs, civil society organisations and government. The portal will provide an entry point for the sharing of information in the fight against AIDS.
Java Planet
In the year under review, the Department of Communications Web Internet Laboratories (DoC WILs) will be linked via satellite with the Institute for Satellite and Software Applications (ISSA) to provide software training. This programme is called Java Planet. The Department of Communications will accelerate the deployment of DoC WILs to make this possible.
Internet Directorate
In order to ensure that electronic transactions are conducted in a secure manner, and to prevent pornography, child and women abuse via the Net, the Department is establishing an Internet Directorate. The directorate will cooperate with other government departments, the criminal justice system, the private sector, international institutions and the Internet community in ensuring that negative aspects of cyberspace are addressed.
The directorate will also assist in the development of Internet usage amongst previously disadvantaged schools and clinics.
Satellite Feasibility Study
We have finalised the domestic satellite feasibility study in conjunction with the Department of Trade and Industry and the CSIR. The next step is to identify private sector partners who will invest in this opportunity.
Telkom SA Limited
In 1997 Telkom was given a five year exclusivity period to implement universal access to telecommunications by rolling out infrastructure in under-served areas and to rebalance tariffs. The universal access targets entailed the installation of 2.8 million new lines, including 120 000 payphones by May 2002.
During the same period Telkom was also required to provide first-time telephone services to over 3 000 villages, install more than 20 000 new lines for priority customers such as schools, hospitals, clinics and police stations and replace around 1.2 million analogue lines with digital technology.
Telkom was given the option to apply for extension of its exclusivity for an additional year, if it met these targets. I am happy to announce that Telkom is on track to meet its roll out target.
After publishing the policy directions for the post exclusivity period, Telkom decided not to apply for an extension to its exclusivity period.
We expect Telkom to be taken to IPO in the 4th quarter of this year. Telkom is ready to compete in the market place.
Licensing for Competition
As already stated in the policy directions the licensing of the SNO to compete with Telkom will be finalised in the first half of 2002.
The following licences will also be issued: Global Mobile Personal Communications by Satellite (GMPCS), 3rd or 2.5 Generation cellular.
The draft policy directions recognise the need to stimulate economic activity in small towns by providing for competition and licensing of SMMEs. They will provide services to areas with a teledensity of less than 1%.
Black Economic Empowerment
Historically disadvantaged people have been excluded from participation in the ICT sector. The draft policy directions address this matter in a decisive way, by setting aside up to 30% of all new licences for historically disadvantaged people.
We successfully set aside and sold 3% of Telkom to Ucingo. I am happy to note that black economic empowerment groups are part of one of the biggest enterprises in the country. There is no doubt that these kinds of transactions will go a long way in our endeavour to deracialise and diversify participation in the economy.
BROADCASTING
Restructuring of the SABC
To strategically reposition the SABC in the context of the changing media and communications environment, we are going ahead with the restructuring as outlined in the Broadcasting Act of 1999.
The new Board has experienced many difficulties as a result of numerous vacancies at management level. Vacant posts are now being filled to enhance the management capacity of the broadcaster. The three executive directors have already been appointed.
The corporatisation of the SABC is now on track and the memorandum and articles of association have been lodged with the registrar of companies.
A review is underway to clarify the role and social obligations of the SABC. With the constantly changing environment there is no doubt that such a review will be needed from time to time to ensure that the SABC meets the needs of the entire nation.
Extension of the SABC footprint
Infrastructure roll out for the television network has been disappointing causing great frustration to small towns and rural areas. Many people have to travel from their home in outlying areas to bigger cities and towns to watch their favourite televised sports events. Many of these are the poor who cannot afford satellite dishes and are therefore reliant on the public broadcaster.
The SABC and the signal distributor, Sentech, must resolve their difficulties about the roll out of the infrastructure. The budget allocation processes are being sorted out.
Meanwhile, Sentech has completed the investigation and planning for the upgrading of the broadcasting infrastructure in certain rural areas. Accordingly, during the current financial year, infrastructure rollout will take place in the Northern Province, Mpumalanga, Eastern Cape and Kwazulu-Natal.
Repositioning of Channel Africa
We are at the threshold of the Millennium Africa Recovery Programme (MAP) in the pursuance of the African Renaissance. The outcome of the journey we have started will also depend on how we communicate and cooperate with each other within and amongst countries. This new environment presents a myriad of challenges to Channel Africa.
Plans to corporatise Channel Africa are underway. There is a need to review our approach to Channel Africa. This repositioning will entail the adoption of new technologies and programme content and format which appeals to decision-makers and the general public on the continent. This will be done through the utilization of all media platforms such as the Internet, television, and radio.
The future of BOP Broadcasting
The process of corporatising Bop Broadcasting is under way. A decision has already been taken to dispose of the Rhino Recording Studios.
Educational channel
A study was conducted to test the feasibility of a dedicated educational channel. It was found, however, that the better option was the establishment of a national educational network utilising multi-media. We are discussing the implementation of this programme with the Department of Education.
Parliamentary channel
A feasibility study into the establishment of a dedicated parliamentary channel has been completed. We are in a process of consulting with stakeholders including presiding officers, the regulator, the portfolio committee on communications and the industry.
Community radio broadcasting
Information dissemination is vital for nation building and in the struggle against poverty, illiteracy, HIV/AIDS, crime, unemployment, etc. As part of our community development strategy, 21 of the planned 36 stations have been installed and the remainder will be done during this financial year.
Production hubs have been established in all nine provinces to enable community radio stations produce their own programmes. People from various stations have been trained to produce programmes on behalf of their stations.
Skills development and financial support is crucial for the proper management, the sustainability and development of community radio stations. I am happy to announce that as from this year, NEMISA in collaboration with the community radio sector will embark on a dedicated course to support management and organizational development in the sector.
Independent Communications Authority of South Africa (ICASA)
Last year the regulatory authorities for broadcasting and telecommunications were merged into a new regulatory entity; ICASA.
The capacity of the regulator is a matter of concern. The convergence of the technologies and new complexities of the ICT sector pose new challenges for the authority. The new telecommunications policy dispensation will pose additional challenges to the regulator. To prepare the regulator to deal with these challenges, Cabinet took a decision to increase resources for ICASA to enable it to meet its regulatory mandate and obligations. The contestation that surrounded the communications authority and the award of the third cellular licence is still in the courts.
National Electronic Media Institute of South Africa (NEMISA)
The mandate of NEMISA is to contribute to the development of human resources in the broadcasting system. NEMISA is in the process of developing partnerships with reputable international institutions in multi-media training.
Later this year the first group of 30 postgraduate students will complete their studies at the institute. These students, the majority of whom are from disadvantaged communities, have been trained in programme production and broadcast business management.
Broadcasting Production and Digital Advisory bodies
These two bodies were launched in March 2001 to advise the Minister on the production of local content and the adoption of digital technology. Both bodies are chaired by women of great intellectual standing.
POSTAL SERVICES
Transformation of the Post Office
The 1998 Postal Act paved the way for the transformation of the SA Post Office Limited. Arising from this new legislative environment the Post Office was given universal service obligations to roll out infrastructure and services in under served areas. The transformation of the Post Office was divided into two parts, namely: universal access and enterprise reform.
With regard to the extension of infrastructure and provision of cost effective and quality services, the Post Office has made progress. Targets for increasing the number of postal outlets by an additional 600 and providing 4 million addresses is on track. The rebalancing of the distribution of postal outlets to disadvantaged communities has also commenced.
In terms of enterprise reform, the Post Office has not performed as expected. Hence the Board has requested me to reconsider the strategic management contract entered into with New Zealand Post International (NZPIL). This matter is being considered by Cabinet. Meanwhile, to address the allegations of mismanagement and fraud, international investigators and forensic auditors have been appointed to consolidate all the forensic audits that have been conducted and to institute new systems and control measures. Consequently, Cabinet may have to consider the reintroduction of a subsidy to deal primarily with the roll out of infrastructure.
From our own assessment, government will have to continue supporting the Post Office whilst we continue to seek avenues for financial stability.
Citizens Post Office
The Post Office has to re-invent itself in adjusting to new national needs and challenges. It has recognised the need to provide universal and affordable access to a digital service for rural and disadvantaged communities through its existing retail network. This will ensure that citizens in rural areas and small towns are not excluded from the "information age" and the potential benefits thereof.
A first pilot site was put into operation in Soshanguve in July 2000 and a further six prototype outlets are scheduled for opening later this year.
In another response, the Department and the Post Office are rolling out Public Information Terminals (PITs). In the year under review we will see 100 post offices equipped with PITs.
Impact of New Technology
We are in the process of ensuring that the Post Office is in step with technological trends and innovations.
Internet, Electronic Mail, and Short Message Service (SMS) are competing directly with traditional letter business. This phenomenon is global in nature and post offices worldwide are grappling with the impact of technological developments on their businesses. The last festive season saw more SMS festive greetings than the traditional posting of Christmas cards. This technology driven service is growing and is eroding traditional mail and therefore strategies need to be developed to address this issue.
Restructuring of the Post Bank
The appointment of consultants for the corporatisation and restructuring of the Postbank has been completed. This restructuring will ensure that the Postbank plays more of a developmental role in addressing the following:
COMMUNICATION SECTOR SUMMIT
Following, the National Job Summit of 1998 we will be holding a Communications Sector Summit later this year to address, amongst other things, job retention and job creation in this fast changing sector.
A first meeting to prepare for the summit has been held. All stakeholders, including civil society and the unions, will be involved in the planning of the event.
GENDER BALANCE
The Department remains committed to gender equity in its own internal structures and processes and its programmes. The department has moved from a gender representation of 100% male to 75% at the top. At senior manager level women have increased from 10% to 30%.
The boards and management of the portfolio organisations reflect strong participation by both males and females. The head of the Postal Regulator and Universal Service Agency (USA) are both women.
On the Post Office Board, from no female representation, we now have three women, one of whom is the chairperson of the board. The Sentech board has three women, one of whom is the chief executive. The chairperson of Vodacom is also a woman.
In terms of training, at NEMISA, four out of nine members of the board are women and that includes the executive director. It has a programme that focuses on developing women in the sector. In the postgraduate training programmes, at least 50% of enrolled students are females.
The Institute for Satellite and Software Applications (ISSA) at Houwteq offers courses on computer networking, remote sensing and masters in software engineering. One hundred percent of these students are female whilst the courses in masters in engineering science have 21% female students. This reflects the need to improve the female participation in post graduate courses in software engineering.
INTERNATIONAL RELATIONS
Globalisation has made the consolidation of the African Renaissance even more urgent.
There is no doubt that ICTs will play an important role in the realisation of this renewal. In recognition of this, the President has announced the establishment of two bodies: The International Taskforce on Information Society and the National Commission on ICT. The ministers of the continent, conscious of this need for ICTs, have, under the Ministerial Oversight Committee (MOC), chaired by South Africa:
- restructured the African Telecommunications Union (ATU);
- set up the African Connection Centre at the DBSA in Midrand;
- requested their Presidents to declare ICTs as one of the priorities of the OAU because of its importance as a tool in socio-economic development;
- Made a collective African input into the Digital Opportunity Taskforce (DOT Force) report of the G8;
- Made a presentation, through its chairperson, to the United Nations Conference on Least Developed Countries; and
- sent out the message that ICT should form part of normal economic planning and priority setting on the continent.
In May 2001 the department hosted the Millennium Africa Recovery Programme (MAP) ICT Forum to prepare South Africa's input into the final sector plan to be presented to the OAU in July this year, which is coordinated by Senegal.
CONCLUSION
There is no doubt that our country is on course. Given the fact that ICTs cut across all sectors of health, education, agriculture and safety, we are ready to make the integrated sustainable rural development strategy real.
The focus of government is to co-ordinate the implementation of its programmes, and I can assure you that, to play our part, we are now ready, willing and able.
I therefore invite you to help us in this endeavour by voting to approve the budget of R487 523m for this financial year. Let me conclude by thanking the Director-General of the Department of Communications, Andile Ngcaba, my advisors, the management and the entire staff of the ministry and department who know that going the extra mile is their responsibility, placed on us by the imperative of history.
Thanks to all stakeholders and the SA Law Commission who participated in different consultative policy processes. Sincere best wishes to all men and women in our portfolio organisations who have worked in an integrated way to ensure that government policies and goals are achieved.
Special thanks to the Chairperson of the Portfolio Committee on Communications and all the members of the committee for the cordial manner they have always interacted with us in making sure that we account to the public and for the support they gave us whenever we do work in their constituencies.
Thank you also to my colleagues from the African Advisory Group and the Ministerial Oversight Committee.
To my colleagues in Cabinet for your advice, support and sense of humour, my sincere thanks for allowing me to grow.
And to the large extended family I say thank you for always being there as my anchors.
Let us continue with the creation of a better South Africa for all.
I thank you.