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Budget Speech Ms Dina Pule 08 May 2012

BUDGET VOTE OF THE DEPARTMENT OF COMMUNICATIONS

DELIVERED BY THE HONOURABLE MINISTER OF

COMMUNICATIONS, MS DINA DELIWE PULE, PARLIAMENT,

08 MAY 2012

 Building ICT Infrastructure for South Africa's

advancement in the knowledge and digital economy.

Honourable Chairperson,

Honourable Members of the House,

Honourable Deputy Minister, Ms Stella Tembisa

Ndabeni,

Chairperson and Members of the Portfolio Committee on Communications,

Chairperson and Members of the Select Committee,

Honoured guests,

Ladies and gentlemen.

Honourable Chairperson,

Please allow me to request this House to observe a moment of silence for my three comrades and former colleagues who have recently passed on. May their passing be a reminder to us all that it is still noble to dedicate one's life to sacrifice and service to the people. The batons of Roy Padayachie, Sicelo Shiceka and Florence Nyanda have fallen. We need dedicated and selfless cadres to pick them up and continue with the race to deliver services and improve the lives of our people.

(Silence)

Thank you.

Honourable Chairperson,

We are honored and deeply humbled by this opportunity to present the Budget Vote of the Department of Communications for the financial year 2012/2013. Every time an opportunity arises to speak in this august House, one marvels at how far we have come as a nation. Let me take this opportunity to salute theheroines and heroes of our struggle who laid their lives for us to have the democratic freedom we now enjoy.

Their vision was that, as a people, we must live together in a non-racial, non-sexist, free and democratic South Africa. Amongst them, Ida Mntwana, Helen Joseph, Ruth First, Oliver Tambo, Walter Sisuluand Nelson Mandela, to name but a few.

Honourable Members,

In this month of May, we salute the workers who continue to remind us that our struggle for the liberation of our people is also about the attainment of a better life for all, including freedom from economic oppression.

We also salute our heroines and heroes for leading our gallant movement well into the year 2012, which marks the centenary anniversary of our glorious movement, the ANC. As we continue to celebrate the 12 Presidents of this giant movement, led by President Jacob Zuma, we remain uncompromising and unflinching in our determination to build the ICT infrastructure, which is the infrastructure of infrastructures, for South Africa's advancement in the knowledge and digital economy.

This Budget Vote is delivered during one of the most significant months in the history of our beloved country.

Honourable Chairperson

It has been 18 years since the world heard former South African President Nelson Mandela say the following:

"Our daily deeds as ordinary South Africans must produce an actual South African reality that will reinforce humanity's belief in justice, strengthen its confidence in the nobility of the human soul and sustain all our hopes for a glorious life for all".

Honourable Chairperson,

ICT Industry Performance.

Allow me to take this House down memory lane. During the 1990’s developing countries were advised to liberalize, privatize and put in place independent regulators to regulate the ICT sector. Understanding its socio-economic development challenges, South Africa adopted a managed liberalization policy approach. South Africa was not spared of the mixed result that flowed from this approach. Today we pride ourselves in the fact that our ICT sector is competitive and can stand its groundagainst the best in the world.

Though the penetration of fixed line telephony is stagnant at about 10% since 1999, we have seen phenomenal growth in the uptake of mobile telephony in South Africa. Mobile penetration is estimated at more than 100%, which is one of the highest rates in the world.

Currently, there are no authoritative statistics on broadband penetration in South Africa. Estimates put broadband penetration at 2% for fixed-line broadband, around 4% for mobile PC broadband and 17% for broadband penetration using smartphones. This nation cannot be satisfied with this statistics. We have to find practical solutions to fast track the uptake and usage of broadband services by the majority of our people. We have thus decided to conduct a study into broadband coverage, penetration and speed in South Africa.

The postal sector is competitive with the South African Post Office (SAPO) being the dominant player in the reserved market and the unreserved market being fully liberalized. One of the key achievements of SAPO has been the significant growth in the rollout of residential addresses in the country since our democracy.The broadcasting industry is competitive with significant market players in the radio and television markets. We are encouraged by the fact that the majority of our people has access to these services. Our focus is to ensure that those who do not have access are catered for in the short to medium term.

Honourable Chairperson,

In this financial year, and for the medium term, we have prioritized three flagship programmes which are at the core of building a digital information and knowledge society. These include the acceleration of building a modern digital infrastructure as well as the policy reforms which position the country for an advanced knowledge economy in 2030.

These programmes are;

  1. Developing a National Integrated ICT Policy.
  2. Rolling out a national broadband network.
  3. Implementing the digital broadcasting migration policy.

These programmes are aligned to the Government’s goals of building a developmental state that will contribute to rural development, improving the quality of education and delivery of healthcare services and relentlessly fighting the scourge of crime and corruption that disadvantages the State in the delivery of services, especially to the masses who are both in rural and urban areas.

As we pursue these goals, we want to ensure that our communities receive their share of the socio-economic dividend that is a result of our democratic freedom. We are focused on elevating the role played by women in the sector. In November 2012 we shall be hosting a “Women in ICT Conference” to celebrate the female trailblazers within the sector and also highlight the ICT career options that are available to our young women and girls. ICT has to be a career of choice for them too.

It is important to note the Department is spearheading ICT programmes focused on Youth, Children, Women and people with disabilities. As part of this work, we have placed 300 young people in health and education centres to do community service which gives them work experience and allow them to earn their living, even though it's minimal. We are doing this as part of our contribution in the fight against unemployment, especially of young people. A country where one in every four people of working age is unemployed has to do everything it can to return the dignity of its marginalized people by creating jobs.

We are unshaken in our commitment to changing this untenable situation that is corroding the fibre of our society. We are happy to mention that our partners in business in this sector are also contributing toimproving the lives of the people. Despite the recession, they have created numerous jobs, for an example, MultiChoice created 531 jobs with Vodacom contributing another 450 jobs last year.

MTN has created 4 543 direct and 14 500 indirect jobs since2010. Working together, we believe that the sector can create more jobs while enriching the lives of South Africans. Young people across the world are leading ICT entrepreneurs and the most successful are among the richest people in the world today and their applications have changed the lives of millions of people.

There is no reason why the next Mark Zuckerberg of Facebook fame and fortune, cannot come from South Africa. In cultivating these types of entrepreneurs and to honour the pledge of the International Telecommunication Union to increase the numbers of women in the sector, we seek to involve girls in our programmes.

Honourable members,

Today we have ten scholars from schools around the country in attendance.

Could the scholars please stand up?

(Applause)

Thank you for coming.

We have made arrangements with their schools to ensure that these scholars catch up with their academic work and we are grateful for the cooperation we have received from the Department of Basic Education and the schools in this regards. We want these scholars to have an opportunity to meet captains of our industry, legislators and of course, officials from the Department.

We hope this will ignite or strengthen their interest in pursuing careers in the sector. Young people tend to be very good with word-of-mouth marketing. We hope they will write about their experience today on their social media profile and tell their friends that South Africa, and the ICT sector, arealive with career possibilities.

Comprehensive ICT Policy Review

On the 19th and 20th April 2012, we hosted a successful National ICT Policy Colloquium under the theme “defining a new era in ICTs for all SouthAfricans”.

We also used the occasion to invite 20 students from the University of Johannesburg to attend the Colloquium. We wanted them to rub shoulders with the leaders of the sector and to have front row seats in this policy development process. The Colloquium has helped to unpack key issues we have to confront in our plans to craft the digital future our country deserves. The Colloquium was unanimous in its support for the ICT policy review and the development of a National Integrated ICT Policy for the country. This policy review should address availability,accessibility and affordability of broadband.

Broadband Infrastructure Development

Broadband is an essential digital resource for accessing basic services, products, commerce and job creation. Broadband has the potential of creating opportunities and opening of new markets that allow businesses, particularly SMMEs, to grow.Given the strategic importance of this enabling infrastructure, the DOC, together with the ICT industry, have committed to delivering 100% broadband penetration and delivering a million jobs by 2020.

Our partnership with the ICT industry gives us confidence to galvanize sufficient resources to deliver on this commitment. At this point I would like to extend my gratitude to the ICT industry and acknowledge their commitment to work with us. Two weeks ago, we visited Malaysia, one of the countries that have successfully rolled out broadband, to learn and share experiences with them.

They have reinforced our belief that a rapid rollout of broadband is possible. In 2009, they were at 31% broadband internet penetration for both fixed and mobile, this year they have already doubled this rate. We see the rollout of broadband as paving the way for the provision of the next-generation applications and local content development.

We are acutely aware of the interconnectedness of broadband and the licensing of radio frequency spectrum, which is a scarce natural resource. In this regard, we commit to finalizing the policy directions on high demand spectrum in order to facilitate the licensing of broadband applications in this current financial year.

Broadcasting Digital Migration.

During 2011/12 financial year, we made substantial progress towards the implementation of the Broadcasting Digital Migration Policy. In February 2012, final amendments to the Broadcasting Migration Policy were published in the government gazette for implementation by various role players. The Independent Communications Authority of South Africa (ICASA) has commenced with the process to finalise the Digital Terrestrial Television (DTT) regulations.

It isenvisaged that the final gazette will be published in June 2012. The SABS Standard, according to which locally manufactured set top boxes will be built, has been completed and is currently undergoing public consultation in a process led by the SABS. This Standard will be finalised by the end of May 2012.

Indications from the Request For Information (RFI) process on local manufacturing of STBs, has given us confidence that we have enough capacity to manufacture STBs locally to cater for both local consumer needs and expor t oppor tunities .

We shall finalise the selection process of suitable settop-box manufacturers in the first quarter of this financial year. This is an important area of job creation for us. We will expect that to create an estimated 23500 jobs will be created across the value chain.

I want to affirm to this House that we are on course on the DTT process. Our State-Owned Enterprises, the SABC, Sentech, Universal Service and Access Agency of SA (USAASA) will play a key role in assisting the department to deliver digital broadcasting in the country. Sentech has already achieved digital signal coverage of more than 60% of the population on the DVB-T2 transmission standard.

We have launched the DTT awareness campaign, where we are educating the South African public to understand what digital broadcasting means and the need for them to take action. This campaign is being done in a phased manner and will be rolled-out in all the provinces.

On May Day, we had an opportunity to address the Workers’ Day rally in Ladysmith, in the Uthukela District. We used this opportunity to supplement our awareness campaign and spread the digital migration message by talking directly to the union leaders and the workers.

Our campaign is targeting print and radio campaigns including community media channels throughout the country. Digital Content Production Honourable Chairperson We believe the migration to digital broadcasting will increase the demand for content due to the increase in the number of channels available to broadcasters. We anticipate that communities and individuals will seize this opportunity to tell their own stories to the world.

They can also be active participants in the growth of the online entertainment industry through dedicated services applications. Our efforts are geared towards supporting the development of education, health and cultural content in South Africa. Several initiatives are underway to increase the availability of digital content. Through investment in content production for the multi-channel digital era, we hope to create more sustainable jobs.

Our people in the creative arts have a huge opportunity to showcase their creativity. This is crucial because without local content, our investment in infrastructure will be in vain and our vision of a knowledge and digital economy will not be realized. We are working with the Department of Arts and Culture in this regard.

Legislative programme

This financial year, the department has prioritized, the amendments of the Electronic Communications Bill, the ICASA Bill, the Post and Telecommunications-related Matters Amendment Bill and the Electronic Communications and Transactions Bill. These amendments are confined to technical matters which cannot be deferred until the completion of the longer process of conducting a comprehensive ICT policy review.

Lowering the cost to communicate.

One of the most common observations from engagements with business, particularly SMMEs, labour and civil associations, is around the cost associated with communications services. Affordability of services remains a challenge. Everyone in the ICT sector has a contribution to make in building affordable ICT infrastructure. One of the key and immediate contributions we can make is to have honest, open and progressive discussions about how we can lower the cost to communicate.

We acknowledge that there has been work done on lowering the cost.

International ICT Indaba

Honourable Chairperson

We shall be hosting the International ICT Indaba on 04 to 07 June 2012 in partnership with the International Telecommunication Union (ITU). Our goal is to use this annual event to achieve several objectives, amongst others to attract investment.

We are happy with the support that this initiative has received from our local operators, including MTN, Vodacom and Telkom and many others. State Owned Companies Stabilizing our state owned companies remains a key priority for the Department. This is key to ensuring thatthey discharge their service delivery mandates.

To demonstrate our seriousness about these companies, we have begun a process to capacitate the branch charged with the oversight responsibility to ensure that the Department is better informed about the activities of the SOCs. Our goal is to ensure that by 2014, all our entities achieve clean audits.

This year the Department has been allocated R1,7 billion. Most of this money will be transferred to the SOCs for their operational requirements. Some of the milestones of our SOCs from the past year and the targets for the next 12 months include;

AT THE SABC

We are happy with the progress made after the board appointed the executive leadership. These appointments are helping to stabilize the broadcaster and to enable its management to focus on meeting the conditions of the government guarantee.

May I add that the the turnaround strategy has started to show positive results. The SABC is also working towards launching a 24 hour news channel. We are pleased with their commitment to forge forward with this initiative.

AT SAPO

We recently appointed new board members and a chairperson. The SAPO board has already advertised the post of the Chief Executive Officer last week and is expected to advertise the other executive positions over the next few days. We expect that these posts will be filled soon.

The board will also have to oversee the processes of integrity systems test at the Postbank to avoid challenges in the future.

At Sentech

The board has assured us that they have started the process of filling all the critical posts.

AT USAASA

We are on course to appointing a new board within the month of May 2012. The appointment of the new CEO will be finalised in due course.

International Relations.

Honourable members,

At the Fourth BRICS Summit held on 28 to 29 March 2012 in the Indian capital Delhi, ICT was discussed. This laid the foundation for talks on areas of common interest such as connecting the partner countries and fighting cybercrimes. The theme of the Summit was “BRICS Partnership for Global Stability, Security and Prosperity.”

The Department also participated at the International

Telecommunication Union’s World

Radiocommunications Conference in February 2012. It also participated in Universal Postal Union meeting in preparation of Congress which will be held in September 2012 and the GSMA Mobile World Congress took place which in February 2012.

One of the key decisions taken at WRC-12 was to allocate the frequency band 694-790 MHz to the mobile service. This frequency band is currently used by television broadcasters. It is ideally suited to mobile broadband applications. The mobile allocation becomes effective in 2015, after the switch-off of analogue television transmissions. The allocation ofthis band will require a review of South Africa’s DTT requirements, as contained in the Geneva 2006

Regional Agreement for television broadcasting. The Department will soon be hosting the SADC ICT Ministers meeting to further our processes of regional harmonization of ICT policies in June 2012.

Capacitating the Department.

We are continuing to reposition the Department to fulfil its mandate. We focused on filling vacancies in the new organizational structure, prioritizing the acquisition of skills in areas such as broadband, telecommunications policy, postal services, economics, frequency spectrum and ICT research.

As a result of this focus and resignations over the year, our vacancy rate is 29% in 2012. We are confident that we can reverse this trend within the first half of this year because most of the recruitment work has been done and we are now close to finalising the appointments across all employment levels.

We have established a Project Management Office to deal with matters that relate to DTT on a daily basis. This office is functioning well.

Thanks and appreciation

I wish to thank the Director-General and Team DOC for the good work they are continuing to do. Allow me also to express my 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 work with us.

To the Deputy Minister for her support, and to the Chairperson and Members of the Portfolio Committee on Communications for their guidance and support.

I invite Honourable Members to approve the Budget Vote No. 27 of the Department of Communications.

Thank you