ADDRESS BY THE HONOURABLE DEPUTY MINISTER OF TELECOMMUNICATIONS AND POSTAL SERVICES, PROF HLENGIWE MKHIZE

 ON THE OCCASION OF THE PROVINCIAL CONGRESS OF THE COMMUNICATION WORKERS UNION (CWU), 

JOHANNESBURG, 01 AUGUST 2014 

Acting General Secretary, Thabo Mogalane 

President, Cecil Mokhantso  

Members of the NEC of Communications Workers Union present,

Comrade Chairperson and Secretary of the outgoing PEC, 

Members of the CWU,

COSATU Representatives

Members of the Media

Comrades and Compatriots,

Ladies and gentlemen

I am honoured to join you today. And I am glad that you have chosen me to address you as we mark the beginning of Women’s Month. This year’s theme focuses on the ‘60th anniversary of the Women’s Charter as part of the 20 years of Freedom, Moving Women’s Agenda Forward!’ I certainly hope that moving the women’s agenda forward will form part of your deliberations as we strive to improve the lot of women in this sector and in wider society.

It is with a sense of great privilege that I address this important provincial congress of the Communication Workers’ Union taking place in a year that our country celebrates 20 years of our hard earned democratic freedom. Many of our comrades have shared their lives and died at the hands of the oppressive Apartheid system in order for us to be free. We as the fifth democratic government do not take this historic milestone lightly. 

Our President, His Excellency Jacob Zuma continues to lead our government and society in a programme of transformation whose primary focus is to address the triple challenge of poverty, underemployment and inequality. Guided by the National Development Plan (NDP) which is our country’s policy vision for the next 15 years, government has adopted the Medium Term Strategic Framework document with actionable plans and outcomes goals.

The NDP is emphatic in stating that, Information and Communication Technologies have a great potential for contributing immensely to economic growth and poverty reduction in this country and should therefore be used as one of the key levers to transform ours into an information and knowledge economy by 2030. The ICT sector contributes to the achievement of the objectives of the National Development Plan as a cross-cutting enabling sector for economic development. It is for this reason that we as the Ministry of Telecommunications have taken a decision to focus our energies on the following key programmes:

1.Broadband Infrastructure particularly the implementation of our South Africa Connect policy in partnership with the private sector.

2.Digital broadcasting migration which will ensure that our people enjoy quality television and more diverse content through a multi-channel digital television system currently being installed in the country.

3. Reducing the cost of communications in order to provide our people with more affordable access to communication services where they live and work. 

4.Ensuring that our sector fast-tracks the implementation of the ICT Sector Charter Code, to give effect to the Broad-Based Black Economic Empowerment Policy. 

5.In order to fulfill some of the goals set in the South Africa Connect, particularly high speed capacity for education and health purposes, it is critical that our regulator ICASA, license the high demand spectrum for broadband services.

6.The capacity development of our people will be through the provision of e-Skilling thousands of our youth in order for them to enjoy the fruits of the digital era. 

Chairperson and Compatriots,

As you all know, this sector is not immune to the challenges that our country currently faces. Let me address a few of these challenges. Unemployment is a key problem that has engulfed our country, in particular affecting youth and women. We believe that the ICT Sector can make a meaningful contribution towards reducing unemployment.

Our State Owned Companies are also experiencing serious skills capacity and financial constraints to enable them to accomplish what they were established to do. 

In the recent past, we have also witnessed labour strikes which have also crippled the financial base of these companies, particularly at the South African Post Office. Similarly labour challenges have also affected Sentech and Telkom. In the case of Telkom, the labour challenges are also affecting the relationship between management and organized labour on the back of the potential job losses.

Chairperson,

I state these issues knowing very well that as the Communication Workers Union, you are interacting with some of these challenges on a regular basis because these issues affect your members directly.

The Medium Term Strategic Framework document has set a target of modernizing telecommunications network infrastructure in order to provide high speed access to internet for all our citizens. Over 41 percent of our population utilise the internet. Whilst this is the case, broadband penetration remains low – South Africa is placed at number 111 out of 183 countries on fixed broadband penetration (2.2%); and at number 62 out of 170 countries on mobile broadband penetration (26%). The United Nation Broadband Commission ranked South Africa at number 5 in Africa and at number 92 Worldwide in “The State of Broadband 2013.” Although South Africa is ranked above the worldwide average of 35.7 percent in terms of internet access, the figure is far below our comparator countries such as Brazil, and Malaysia. 

Chairperson

We have a long way to go. Much more still needs to be done to address the growing digital divide in our country. 

The reasons for these levels of internet and broadband penetration are linked to the affordability of ICT services in the country.  The challenge is our high cost of communications, which means that our voice calls and internet access is unaffordable for the majority of our people, particularly black people and women. These costs are a manifestation unwillingness of the monopoly capital companies to engage in meaningful or real competition. The existing monopolies entrenched in fixed and mobile electronic communications network service providers further highlight the need for government, through ICASA to regulate costs for services at wholesale levels. 

As mentioned earlier, our Cost to Communicate programme is aimed at addressing these challenges. The Minister will be issuing a policy directive aimed at transforming the pricing structure and ensuring transparency in order for our consumers to enjoy a diverse choice of services. The allocation of spectrum will also ensure that competition in the market is increased.

Furthermore, we will undertake national roaming studies to determine the quality of service as well as cost inefficiencies which usually affect smaller operators. 

We are continuing to support ICASA in its processes of reducing the cost of making a call in South Africa, also referred to as the Call Termination Rate. The Department has provided ICASA with the necessary funding for them to undertake the cost modeling studies which were ordered by the Courts.

Our policy interventions are aimed at increasing the uptake and the usage of broadband internet access and thereby improving our international ranking and thereby our competitiveness rankings. 

Through the Broadband Policy, South Africa Connect, adopted by government in 2013, the Department of Telecommunications and Postal Services will work with other departments and the industry to address this challenge. The SIP (Strategic Integrated Project) 15 will be used as a platform for building on this partnership amongst all stakeholders to also encourage investment in infrastructure and innovation to bring new services to the people.

For us to increase our adoption of online services, particularly e-government services, we also have to increase our e-skills productions. Government is addressing this challenge by capacitating the IKamva National e-Skills Institute.

Chairperson,

Broad-Based Black Economic Empowerment in the Sector

With regards to Transformation, the Department of Trade and Industry has led us in the policy formulation by promulgating the Broad-Based Black Economic Empowerment Act early in 2003.

As you know, the ICT sector was amongst the first sectors of the economy to work towards establishing the ICT Charter. This sector has grown to over R180 Billion market capitalization, contributing over 6 percent to the Gross Domestic Product. Hence is it critical that we highlight the importance of transformation in this sector. 

Chairperson, 

Whilst some ownership BEE transactions were concluded in the past, more still needs to be done to improve the black economic empowerment status in this sector. 

Despite the delays in finalising the Charter, the BEE ICT Sector Code was finally approved by the Ministers of Communications and Trade and Industry and Published in the gazette in June 2012. 

The Generic Code of Good Practice of the B-BBEE Act of 2003 has provided key measurement principles by which measured entities will be assessed in regard to skills development undertaken in an organization.

These key measurement principles require that the following criteria must be met in order for the Measured Entity to receive points on Skills Development Element scorecard:

•Workplace Skills Plan, Annual Training Report and Pivotal reports which are SETA approved; and 

•Implementation of Skills programme generally and more specifically for black people.

•The compliance target as defined must include external training expenditure for unemployed black people.

To achieve transformation in the ICT Sector in particular, skills development of black employees must take a centre stage. No real transformation agenda can succeed if the majority of the workforce, who are mainly black, remained unskilled.

Unions and shop stewards are urged to work with their respective managements to ensure that all of the key measurement principles regarding skills development in general and the ICT sector in particular, are implemented and monitored in organization. Each and every worker must contribute to assist his/her organization to ensure that effective Skills Development of black employees in particular takes place at every work place.

Chairperson

ICT B-BBEE Sector Code came into effect in June 2012. This gazetted code heralded a new era for the sector to have transformation guidelines that should be used to transform the sector to ensure that the ICT sector’s important contribution to the national economy is well reflected in the transformation of the South African economy. Harnessing the potential of ICTs for economic growth and development cannot be done in isolation of the achievement of the national transformation agenda. Transformation should therefore be at the forefront of our economic and development growth agenda to ensure that economic growth is benefits majority of citizens.

To achieve a transformation in the ICT sector in particular, it is worthy to note that all the core elements in addition to Skills Development Element of the B-BBEE Scorecard must be adhered to:

•The Ownership Element which measures the effective ownership of enterprises by black people

•The Management Control Element which measures the effective control of enterprises by black people.

•The Preferential Procurement Element which measures the extent to which enterprises buy goods and services from suppliers with strong B-BBEE procurement recognition levels.

•The Enterprise Development Element which measures the extent to which Enterprises carry out initiatives intended to assist and accelerate the development and sustainability of other Enterprises.

•Socio-Economic Development and Sector Specific Contributions Elements which measures the extent to which Enterprises carry out general and ICT sector specific initiatives that contribute to Socio-Economic Development and promote access to the economy for black people.

Postal sector transformation

The South African postal sector development and transformation started as early as 1994. When the democratic administration took office in 1994, one of the first tasks undertaken was to transform the postal sector.  The reason being this sector was used by the apartheid regime to murder anti-apartheid activists through letter and parcel bombs. This worst form of abuse of the sector destroyed precious lives of freedom fighters like Ruth First and Onkgopotse Tiro.  The democratic government established the White Paper on Postal Policy in 1998.  The policy was aimed at rebalancing the imbalances of the past to ensure universal access to postal services in the country.

In terms of the White Paper access to basic postal service is the right of all South African citizens. The Postal service is essential for the socio-economic development of the country. Integral to national policy for the postal sector is the provision of a universal postal service.  

With its extensive network infrastructures, postal systems are well positioned to expand into new services that will not only strengthen the interaction between government and constituents, but also help meet society's expanding needs.

Building capacity of the South African Post Office 

Despite the emergence of new information and communication technologies, the postal service has continued to serve as a critical infrastructure and a trusted provider of secure communication, payment and delivery services between identified senders and receivers.

The explosive growth of the communications market has forced many postal administrations to move beyond the core, physical mail business.  They are now diversifying in order to broaden the range of services they offer to their customers.  Today, we have a number of hybrid postal products which combine electronics with hard copy delivery. In essence the e-commerce is the way to go. In order for government to ensure the fulfilment or implementation of the National Development Plan and its priorities, it is imperative to recognise the potential of the Post Office in assisting government to achieve its 5 strategic mandates, which are education, decent job creation, health, rural development and food security.

Service Delivery

Government recognises the need for the postal sector to strengthen and streamline the postal service to improve the education system particularly on the delivery of textbooks and study materials for both Basic and Higher Education. Through fully-fledged Citizen Post Offices which are empowered with a wide-range of ICT infrastructure, learners will be able to conduct research on various topics for assignments and homework, send bursary or financial aid applications, and make online applications for registration/admission to all tertiary institutions.

The labour instability in the Post Office has resulted in financial losses which the post office is struggling to overcome, resulting in the post office facing serious challenges. The Minister of Telecommunications and Postal Services has instructed the post office to urgently work on a Turnaround Strategy which must be finalised by November this year. We do hope that you will also make your thoughts towards the Turnaround Strategy. We need to get the Post Office back on its feet.

As the Ministry, we urge labour and Post Office to work within the framework of labour relations act to ensure that the bargaining regime bears fruit for both the employer and labour. We have to achieve a sustained level of labour peace in the Post Office, and we urge all stakeholders to work together towards this goal, without compromising the rights of the workers. Labour stability is essential to the prosperity of the Post Office and by extension, our country’s social and economic development.

Chairperson

Employment in the postal sector is influenced by economic developments of postal markets, the regulatory framework as well as technological developments. The deployment of ICT infrastructure in the rural areas will allow for the growth of the e-commerce and parcel market. The increase in demand for parcel delivery services contributes to the benefit of employment in the parcel and express market. 

We see a great opportunity for the Post Office in the health sector, wherein Post Office can also play a significant role in the delivery of medicines in hospitals and clinics and contributing to improving health care delivery.

Once again we emphasise that labour stability in this sector is essential to its growth. This should not be at the expense of worker rights. We now have a great opportunity to work towards building a better South Africa. Let’s move South Africa forward by working together.

Thank you