Speech by the Deputy Minister of the Department of Telecommunications and Postal Services,
Hon. Prof. Hlengiwe Mkhize
During the Occasion of
ICT Transformation in Society Knowledge Sharing Session
at the Embassy of Sweden, Pretoria
21 April 2016
Vinton Cerf, one of ‘the fathers of the Internet’ once said: “Governments should look at investment in broadband as a national priority on the grounds that having broadband access for virtually everyone creates opportunities for the development of the economy that wouldn’t otherwise be available”. Coming from one of the pioneers on the Internet this statement carried more weight.
South Africa has never been an onlooker, since the dawn of our democracy we have been pushing for our citizens to be connected. The challenge for us has always been to connect rural areas. Our first democratic President, Tata Nelson Mandela when giving a concluding address at the opening ceremony of the TELECOM 95 at the 7th World Telecommunications Forum and Exhibition on the 3 October 1995 in Geneva, emphasized the importance of skilling young people for the information revolution, he said: “Many of us here today have spent much of our lives without access to telecommunications or information services, and many of us will not live to see the flowering of the information age. But our children will. They are our greatest asset. And it is our responsibility to give them the skills and insight to build the information societies of the future. The young people of the world must be empowered to participate in the building of the information age. They must become the citizens of the global information society. And we must create the best conditions for their participation”.
Information and Communications Technologies (ICT) is crucial for modernising the economy, socio-economic development, efficient government services and raising national productivity. ICT developments will continue to transform economic and social activities, and how individuals and communities communicate and function. Its impact on each sector of society and each area of service delivery will depend on how uptake is addressed. Realising the importance of connectivity, South Africa has put as one of our key priorities, get all the citizenry connected.
2. Investment in Submarine Cables
The government of South Africa has invested in the undersea cable projects coming down the east and west coasts of Africa through its interests in Telkom, Broadband Infraco. These projects will create an additional eight (8) terabits of capacity for Southern Africa which is over sixty (60) times the capacity available from the SAFE cable project that preceded the two projects. The two projects connect the African continent with the rest of the world at high speeds and these increased capacities will result in a reduction in the prices of broadband connectivity.
The South African government has always been at the forefront of creating an enabling environment for modern ICT broadband infrastructure investment. In 2006, SA government was pivotal in the development and adoption of the Kigali Protocol. This is the Protocol on Policy and Regulatory Framework for NEPAD Broadband Infrastructure. This Protocol led to substantial investment made by government and private sector in the laying of submarine cables and providing infrastructure to enable more bandwidth across Africa.
To date Africa is connected to eight (8) submarine cables, which are:
• SAT3/ SAFE - Links Portugal and Spain to South Africa,
• GLO-1 - Connects Nigeria with the United Kingdom and other African countries,
• TEAMS - Connects Kenya to the rest of the world,
• SEACOM - Serves the East and West coasts of Africa,
• LION - It connects Madagascar, Reunion and Mauritius,
• EASSy - Links South Africa with East African Nations,
• MAIN ONE - links South Africa with Portugal, and
• WACS - links South Africa to the United Kingdom
This has culminated into the convergence of mobile communications and Internet, radically transforming the lives of billions of people. The influence of the ICT sector can never be underestimated and we need to take advantage of the benefits derived from this for enhancement of economic inclusion.
3. The Cost to Communicate in South Africa
ICT is a cross-cutting input for most other areas of importance in South Africa economy, sectors ranging from banking, farming, manufacturing, services. South Africa broadband penetration as compared to other developing countries remains lower regardless of the uptake of mobile broadband. The high cost of broadband internet connectivity remains a hindrance to technological advancement. Despite the recent reductions to both fixed and mobile data prices, broadband pricing remains a barrier to exponential growth in broadband use. Policy interventions were necessary at a national level. One critical intervention was the reduction of interconnection rate as a remedy to lower the cost to communicate.
4. South Africa Connect – National Broadband Policy
Early in the year 2013, the Department of Telecommunications and Postal Services working with the Centre for Scientific & Industrial Research (CSIR) conducted an ICT infrastructure gap analysis which indicated that there is broadband infrastructure duplication in urban areas whilst there was a huge infrastructure deficit in townships and rural areas. From the results obtained it was clear that government had to intervene to ensure that the country’s strategic economic targets are achieved whilst ensuring that the limited resources in the country are efficiently used to benefit all populace.
In December 2013, Government approved South Africa Connect, i.e. “South Africa’s National Broadband Policy, Strategy and Plan”. The policy details government’s intention to extend the broadband infrastructure and services to the most marginalised communities of South Africa by 2020.
During the period between now and the year 2020 priority will be connectivity to schools, health facilities, police stations and other government facilities to enhance public administration and service delivery. The target primary is to achieve 50% broadband penetration by the end of 2016 as outlined in SA Connect with average access speeds of 10 Megabit per second (Mbps) for the above facilities. We also want to ensure that broadband services are affordable. By the year 2020, Government intends to achieve 100% broadband penetration for schools and health facilities, eighty percent of which should be connected through high-speed broadband infrastructure, enabling data speeds of up to 100 Megabit per second (Mbps).
5. Policy Context for SA Connect
South Africa Connect Policy seeks to address the digital divides between those with resources and capabilities to access and optimally use the full range of broadband services and those who are marginalised. The policy has a good strategic framework in place that will lead to the sustainable usage and sustainable access by 2020. These broadband strategies encompass both “supply and demand” side initiatives. These approaches will ensure that the country achieve the 5A’s objectives (Availability of broadband network, Awareness, Accessibility of broadband at a national level, Affordability and Ability to use the application).
South Africa Connect Policy has four pillars:
• Digital Readiness: the creation of an enabling policy & regulatory frameworks; institutional capacity to facilitate broadband rollout while protecting the broader public interest.
• Digital Development: Aggregating public sector demand to address critical gaps, by procuring high-capacity and future-proof network capacity at more affordable cost to address public sector broadband requirements.
• Digital Future: Facilitate wholesale open access that will enable sharing of infrastructure and enable service based competition.
• Digital Opportunity: Ensuring that the citizens are up skilled & there is institutional capability, encourage research and develop (R&D), Innovation & entrepreneurship, development of local content and Applications.
The South African National Broadband Policy draws from various pieces of legislation and policies aimed at developing the South African economic landscape. The pieces of policies includes:
5.1 The South African Constitution
The South African Constitution aims to “… improve the quality of life of all citizens and free the potential of each person” and, in doing so, enables equality in the rights, privileges and benefits of citizenship, including the guarantees of freedom of expression and association in the Bill of Rights in digital world.”
5.2 The National Development Plan
The NDP envisages that by 2030 the ICT sector will underpin the development of a dynamic and connected information society and a vibrant knowledge economy that is more inclusive and prosperous.
5.3 New Growth Path
One of the job creation drivers identified as part of the New Growth Path, the national 5-year economic plan for the country, is the element of the knowledge economy – an economy that is underpinned by access to affordable high speed broadband…
5.4 Strategic Integrated Project 15
One of the projects under the Presidential Infrastructure Coordinating Commission (PICC) is the Strategic Integrated Project 15 (SIP 15) aims to expand access to communication technology which “to ensure universal service and access to reliable, affordable and secure broadband services by all South Africans… prioritising rural and under-serviced areas…stimulating economic growth.’’
6. Broadband Connectivity Targets
Our targets, as set out in the National Development Plan are to achieve 100% broadband penetration by 2020 as well as transforming 70% of all front-line service to e-Service by 2019. The period between now and the year 2020 will be used to prioritize connectivity to schools, health facilities, police stations and other government facilities to enhance public administration and service delivery. By the year 2020, government intends to achieve 100% broadband penetration for schools and health facilities, eighty percent of which should be connected through high-speed broadband infrastructure, enabling data speeds of up to 100 Megabit per second (Mbps). Coupled with this is the intention to ensure that broadband services are affordable.
7. Mandate to Prioritize Connecting the Poorest of the Poor
The first phase of broadband rollout was officially announced by President Jacob Zuma in his 2015 State of the Nation Address when he said: “The year 2015 will mark the beginning of the first phase of broadband roll-out. Government will connect offices in eight district municipalities. These are Dr. Kenneth Kaunda in North West, Gert Sibande in Mpumalanga, O.R. Tambo in the Eastern Cape, Pixley ka Seme in the Northern Cape, Thabo Mofutsanyane in the Free State, Umgungundlovu and Umzinyathi in KwaZulu-Natal, and Vhembe in Limpopo.”
These are mostly rural district municipalities. In our connectivity drive, we targeted rural areas found in the mostly impoverished communities of our provinces.
Since the adoption of South Africa Connect, the Department has developed a plan to aggregate government demand for broadband services and stimulate infrastructure rollout in eight of the 10 NHI districts. Whilst anchoring the connectivity in support of the NHI programme, connectivity is currently being provided to all government facilities (schools, police stations, Thusong Centres, and other government buildings) in the eight districts.
The rollout programme is complemented by the rollout programmes already initiated in Gauteng and the Western Cape. The rollout involves a mix of technologies, carefully selected to meet the needs and challenges of the applicable areas.
8. Growing Need For Industrialisation in the ICT Sector
The uptake and usage of broadband requires the delivery of innovative and affordable services, the development of content and applications, procurement of manufacturing of ICT end-user devices and developing a digitally literate nation. These various elements of the value chain of providing broadband services presents good opportunities for women and youth businesses at large and particularly for the development of SMME’s in the sector.
South Africa is a net importer of ICT products, has a low supply of relevant ICT skills and is serviced by industry which does not fully represent the demographics of the country. Moreover, the country lags behind in producing critical mass in ICT Research, Development and Innovation. There is an urgent need of establishment of manufacturing plants within the South African ICT Sector to fuel overall industrialisation within the sector.
9. South African Government’s Efforts to Encourage Local Industrialisation
Cell phones have been advertised as a basic necessity to communicate because of low penetration of fixed communication lines in South Africa and elsewhere in the developing world. They have emerged as tools to bridge the digital divide between the rich and the poor and they are regarded as the enabler of economic development. Mobile phones are the dominant communication technology among low-income users and informal businesses. In 2012, about three quarters of low-income South Africans, in rural and in urban areas, possessed a cell phone. As smartphone and feature phone usage growths beyond personal use and into business environments, time spent on devices is also increasing. The average price for smartphone in South Africa is approximately in the average price of +-R13203.00. This price cannot be affordable for all segments of our population. In order to drive this cost down we need to have our own production with local inputs to create affordable devices.
Industrial Development Zones (IDZs) are government’s purpose-built industrial estates geared for duty-free production for exports, and they play a hugely important part in South Africa’s macro-economic policy. They provide transport, logistics and business services tailored for export-oriented industries. Two perfect examples of these IDZs are the Coega and East London IDZs. The Coega and East London IDZs offer sophisticated infrastructure; low land costs; easy access to skilled and competitively-priced labour; low energy costs; fast-track construction; compliance with international quality, health and environmental standards; and a clustering of industries for efficiency and to reduce costs.
Investors also benefit from direct cost savings and operational efficiencies. Each IDZ offers a central Customs Secured Area (CSA) that is deemed to be outside South Africa for customs purposes. This allows companies in the IDZs to import raw materials and inputs to be used for export goods, duty-free. Exports from the IDZs are VAT-free if goods and services are sourced from South African customs territory. The CSA is complemented by an adjacent industrial and services area for supplier industries.
10. Implementation plan and funding requirements
Government has adopted a phased approach to implement its Broadband policy. The Phase 1 roll-out of the broadband which is based on aggregating government’s demand will focus on 8 District Municipalities across seven provinces. The first phase has excluded Gauteng and Western Cape Provinces because they have plans that are being implemented. Government has designated Telkom as the lead agency to roll-out broadband collaborating with other State Owned Entities.
Phase 2 will focus on rolling-out broadband in the remaining District Municipalities. The Department submitted business case for the second Phase of the South Africa Connect to National treasury to fund the broadband rollout. The objective of the business case was to source funds approximately around +R67billion to provide fixed broadband (Fiber), wireless broadband (Mobile) or satellite connectivity to government facilities and extend broadband penetration to underserved areas. The main objective is to expand fibre infrastructure as much as possible to rural areas by ensuring that schools, health and other government facilities are connected through high speed networks to enable e-government applications. Because of the constraints in the fiscas the Department is looking at alternatives and partnerships to fund and roll-out the project. The implementation plan will be finalised once the funding issues are resolved.
South Africa is in a digital revolution, we are moving towards interventions such as smart cities, smart power, smart transport etc. We are satisfied by the speed of ICTs uptake by government departments. The challenge remains, these interventions are in urban areas. Focus need to also be on our rural areas. With the rehabilitation of our Post Office which has a large infrastructure footprint, we are looking at opportunities to digitize.
To ensure growth of free Wi-Fi hotspots, the Department of Telecommunications and Postal Services has allocated about R40 million to six (6) Metropolitan Municipalities whereby about 230 sites will be connected to Wi-Fi. We believe that the move will assist us in realising our goals of universal service access thereby closing the digital divide.
I Thank you.