Committee will host an ICT Seminar, focusing on sectors developments (telecoms, postal services, e-Government and ICT ecosystem) in last 20 years

Meeting report

Opening remarks by Chairperson

The Chairperson welcomed everyone in the Committee meeting and reiterated that the seminar should be as interactive as possible so as to ensure that everyone contributes to the debate about the progress that had been made in the last 20 years in terms of accessibility and affordability of broadband. There were apologies again from Mr Siyabonga Cwele, Minister of Telecommunications and Postal Services, and Ms Rosey Sekese, Director General (DG) of DTPS.  

Briefing by the Department of Telecommunications and Postal Services (DTPS)

Mr Linden Petzer, Chief Director (CD) of Radio and Satellite Communications, DTPS, said the presentation would focus on the Information and Communication Technology (ICT) public policy, transformation and e-skills development. The Framing Paper for the ICT public policy had been gazetted in April 2013 and then followed by the Green Paper in January 2014. The Discussion Paper, where the public was consulted, took place in October 2014 and the White Paper was still to follow. The technological development included the convergence which was led by Internet Protocol (IP), and was comprised mainly of infrastructure, services and devices. The digitalisation of broadcasting signal distribution network to IP data transmission network, mainly to free up spectrum, was to enable access to high speed broadband services and facilitate the introduction of many more channels.

The “internet of things” prioritised on increasing demand for connected services, integrating cyber and physical worlds which required new forms of online security, and this moved from the connected devices to the “Internet of Everything” (IoE) as people, data, processes, communities and countries became increasingly connected. Valuable information was often yielded by these connected services. There was no doubt that there were changes in the traditional role of IT, as IP networks were playing a central role in connecting disparate IT environments (cloud, mobility, big data and the IoE) and big data was able to link and process large pools of data. Privacy and consumer protection issues were become more and more important as cyber crime continued to escalate.

The policy and regulatory implications had intensified competition as new competitors were emerging and internet players offering equivalent voice and messaging services were not regulated. Interoperability increased pressure for networks, services and devices to become more interoperable as consumers expected to transfer seamlessly. The growing user demand and sophistication created a growing pressure and demand for spectrum. Open access (infrastructure) was a key element of a converged environment as facilitates maximised efficient and fully-leveraged use of available infrastructure and services and encouraged infrastructure sharing, spectrum re-framing, and optimal interconnection. Many regulators were adopting a unified technology-neutral licensing framework and this enabled seamless provisioning of diverse services over varied platforms.

The current regime (vertical integration of business model-operator licences) was substituted by horizontal licensing and a horizontal market structure, as traditionally distinct networks needed to be integrated. There was now a move away from an exclusive environment to a shared environment and this entailed infrastructure sharing, interoperable and interconnected networks and efficient use of spectrum. Convergence and technological changes required a completely new approach to that of the silo regulation of the past. The biggest challenge to broadband connectivity in the country was the availability of infrastructure, as it was not uniform across the country.

Mr Petzer took the Committee through the solutions to address the challenges in broadband connectivity:

• Interventions were required to serve the under-served and unserved segments of the market;
• Policy approach -- different levels of interventions for different layers of the network;
• Address infrastructure bottlenecks -- sharing, interconnection, spectrum and rapid deployment;
• Facilitate access and sharing of infrastructure (both passive and active);
• Creation of a Next Generation Network (NGN) that operated on an open access principle;
• Government intervention to address market failure -- National Broadband Network (NBN) and public outsourcing;
• Coordination: the role of State-Owned Companies (SOCs), provinces and local government;
• Affordability of services – service-based competition and regulating the wireless broadband wholesale market.

It was concerning that a total of 6 785 schools, 793 clinic facilities and 192 police stations were still outside coverage of the main service providers, as ICT service was now regarded as the main basic need. There was a need to review the definition of Universal Access and Service (UAS) to include awareness and ability of particularly skills. Licence obligations differentiated in their imposition of Universal Service Obligations (USOs) between licensees in different sub-sectors or classes of services, removing and increasing contribution to the Universal Service and Access Fund(USAF) instead. The Universal Service and Access Agency of South Africa (USAASA) should be incorporated in the Independent Communications Authority of South Africa (ICASA) and then merged with the Media Development and Diversity Agency (MDDA).USAF could be managed by assigning the management and control of the USAF and the disbursement of its funds to ICASA, and assigning the management and control of the USAF to a newly created independent board, or a board based on a merger of the MDDA and USAASA.

Ms Mymoena Sharif, Chief Director (CD) of e-Skills, DTPS, said South Africa was ranked 93rd out of 193 countries included in the United Nations survey, and part of the problem was that there was no coordination of different policies and e-strategies. The Electronic Communications and Transactions Act of 2002, states that DTPS should play a leading role in the development of a three year national e-strategy, and monitor its implementation. The Information Society and Development (ISAD) plan was development and approved by Parliament in 2007 and the National Development Plan (NDP) called for the finalisation of a national e-strategy that cuts across government departments and sectors of society. A policy should develop tools and mechanisms to ensure that all government services were integrated, as citizens had to provide information only once to receive/access all government services. Harmonization of policies, integration and coordination was vital important to achieve a holistic overarching approach and define the scope and responsibilities. 

Briefing by South African Communications Forum (SACF)

Ms Loren Braithwaite-Kabosha, CEO, SACF, indicated that the vision of SACF was to unleash the power of the SA ICT industry to create the most enabling ecosystem for a universally connected and prosperous South Africa. SACF was a non-profit company formed in April 2001 which aimed to broaden the growth and development of the ICT industry. SACF was a successor to the African Telecommunications Forum founded in 1993 and had a history of promoting meaningful participation of Historically Disadvantage Individuals (HDIs) in the ICT industry. The Forum represented the leading stakeholders in the telecommunication, electronic media, postal, information technology, electronics and broadcasting industries. Members of SACF also included numerous small and medium enterprises and individual executives in the ICT industry. The SACF was an organization which pooled together high level technical skills and business expertise in the ICT sector.

 

The SACF programmes included policy intervention and development, training and skills development, and membership and outreach – like the SA Women in ICT Forum and the ICT Youth Forum. There were also international partnerships, such as assisting the South African Developing Community (SADC), Finland and Korea. The key role for ICT forums was to be effective, well-resourced and supported industry associations and forums to enable informed choices to be made by members, both within and outside the industry. There was an unbiased benchmarking study that informed the whole industry and its external partners and stakeholders without infringing on the nature and quality of those choices, or the independence to make them. It also offered a platform for dialogue and mediation, changing from compliance-driven adversarial relationships to cooperative decision-making that served both the industry and its operating environment. Healthy competition within the industry was promoted through informed and mutually beneficial development of outcomes-based governing policies and regulations, and building trust between the industry and the society it served.

 

Ms Braithwaite-Kabosha emphasised that technology had been a principal engine for economic growth and job ccreation globally. Most of the jobs in today’s economy were based on technologies that did not exist 50 years ago. In many countries, the Internet had become the fastest growing driver of economic growth, and South Africa was no exception -- the Internet’s contribution to the South African economy would rise by around 0.1% a year, reaching 2.5% by 2016. At this rate, the Internet's share of Gross Domestic Product (GDP) and contribution to employment would continue to grow  faster than the offline economy's, contributing up to 5.5% per annum (on average) to overall GDP growth. The South African Internet economy was expected to reach R79-billion in 2015. This growth was significant if compared to other sectors. For example, economic activity in the manufacturing sector and in the mining and quarrying sectors reflected a negative growth rate of -1.9% and -17.4% respectively in 2011 (Stats SA). In the next five years, the internet economy would become a key component of the South African economy. It would be fuelled not only by growing awareness of the significance of the Internet by both business and government, but also by the rapid growth in the number of internet users.

 

South Africa’s challenge as a developing state was to find a healthy balance between the three pillars: economic growth, social development, and environmental sustainability.The NDP was a blueprint for eliminating poverty and reducing inequality in South Africa by 2030. It sought to do this by drawing on the energies of the country's people, growing an inclusive economy, enhancing the capacity of the state, and promoting leadership and partnerships throughout society. All these were totally dependent on modern global information flows, and knowledge created, disseminated, shared and used to support the development of these three pillars. ICTs were the critical pillars of such information and knowledge utilization.

 

The Convergence Bill –- policy since 2003 -- was now pulling apart legislation, regulators and policy makers in respect of institutional frameworks, which should be considered and analysed in light of the recent developments regarding the split in ministries and relevant proclamations, as this had critical structural and implementation impact. Greater coherence was needed. There should be no overlap between functions, to ensure independence at regulatory level and promote fair competition at implementation level. Perhaps for future consideration, a ministry of ICT should be situated in the Presidency in order to promote better ICT coordination across government, and in order to enable it to have a more forward looking, planning-oriented approach. The Ministry of ICT would need to be positioned to be viewed as a pillar for both social and economic growth of the country, as well as for increased investment in the sector. By positioning itself as a Presidential project/Ministry it needed to have the power to play the coordinating role which was much needed for the growth of the sector.

 

The key discussions focused on how the ICT ecosystem, with its unique characteristic as the most effective modern tool for information dissemination and knowledge creation, dissemination and use, could be escalated in the NDP so that it played its rightful role in the national development process. How could the ICT industry, represented by the SACF and all other ICT industry associations, be used to develop the inclusive partnerships between civil society, labour and the ICT industry needed for the continuous engagements necessary for satisfactory implementation of the 2030 Vision for South Africa in the NDP? What was the way forward for the SACF -- and therefore the whole national ICT industry -- to participate effectively? The greater use of social media was important, being informative as well as instructive. However, there were still constraints including spectrum delays leading to a lack of access to broadband by most citizens. The other additional challenges included a lack of access to smart devices by most citizens and the delay in e-participation development.

 

Briefing by the South African Post Office (SAPO)

 

Mr Andrew Nongogo, General Manager, SAPO, stated that it was important for the seminar to delve into the future of the current SAPO and how it could play an instrumental role in the rollout of broadband as this was important for  economic and skills development. The ICT sector was impacting on the current functioning of the SAPO, as more and more people were now moving away from the traditional ways of communication, like letters. However, this also presented an opportunity for SAPO to become a landing zone for broadband rollout as there was infrastructure in place which was not being utilised to the fullest capacity, and this footprint could be used for wi-fi spots in remote rural areas of the country.  The infrastructure of SAPO could be used as the first touch point for government business so as to be in the forefront when the government was planning to rollout a comprehensive and robust e-government system

Mr Nongogo mentioned that SAPO could also be used for collective government services like ID documents, passports and visas, and this could be done by working closely with the Department of Home Affairs (DHA) to ensure the security of these services was not compromised. SAPO was mandated to rollout addresses throughout the country. This was a key component of enabling economic development, and the majority of the people in the country were still marginalised simply because of where they were located. The rollout of addresses using geo-coding could play a useful role for providing emergency services, as one could be able to track addresses using GPS. Although there was already infrastructure in place, a question remained on the mechanism to use in order to acquire funding, as it was unlikely to be profitable in rural areas.

It was important to keep in mind that in rural areas, the post office often became the only site where the majority of people could access government services. SAPO was currently under tremendous pressure from substitution, as the majority of people had moved away from the post office and there were concerted efforts being made to switch over to digital forms of the same information offered. This again presented challenges for SAPO, as there was an annual drop of 5% to 10% in the volume of mails.     

Discussion

Mr Zeth Malele, Chairman of DULU Holdings and former CEO of arivia.kom, indicated that the interventions made by the country would not succeed unless there was a right partnership and the partnership must be based on the priorities of the country, as there was no radical attention that was being given to the digital divide. There were stakeholders that were fundamental when talking about the digital divide and universal access that were not represented in the seminar, and they needed to be part of the discussions on the challenges affecting ordinary people in the ICT sector. The sector needed to take advantage of the high demand spectrum process to regenerate resources that would effectively impact the remote rural areas.

The sector also needed to find ways of resourcing the very same representatives coming from the targeted interests. SACF was doing a wonderful job but they could not deliver the desired results alone. There were other organisations, like the Communications Users Association (CUA) and Black Information Technology Forum, which were defunct as they were not properly resourced and capacitated to make the input. He emphasised that the sector must put more resources into implementation than a laborious policy review, as this was the main reason for the failure to deliver universal access to broadband. Coordination would remain fundamentally important in order to tap into and influence the activities of other relevant Portfolio Committees and departments. Government was the biggest consumer of goods and services and this was power, in addition to legislative and policy making power. Countries usually came out of recession using the power of government. In the context of the ICT sector, the government must drive the consumption of the sector so as to boost economic growth and tackle the triple challenges of poverty, unemployment and inequality. The State of the Nation Address (SONA) must consistently reflect the role and the importance of the ICT sector. 

Ms Phumla Radebe, Chairperson of Universal Service and Access Agency of South Africa (USAASA) mentioned that it was interesting that there were no comments regarding USAASA’s performance and contribution in the sector. It was important for the speakers to inform and update themselves on what was happening in the organisations and leave policy issues, as those can be debated at the time.

Ms L Maseko (ANC) said the first seminar had been very useful as it had provided insights into ways in which the sector could be transformed, especially now that it was regarded as a basic service. There was a need to expedite the implementation of the policies, as shifting blame would not take the country forward in the delivery of broadband. The postal services needed to be reformed, as the issue of compatibility with the ICT sector had come out very strongly and SAPO would need to work “smart” to capitalise on the recent developments in modern electronic communication. The recent SAPO strike had had a negative impact on business enterprises and had also affected ordinary people from remote rural areas who still relied heavily on the post office to transfer goods, parcels and letters.

The seminar had tried to the best of its capabilities to bring together all the stakeholders to voice their opinions on how they were impacted by the ICT sector. The sector was supposed to play a forefront role in job creation and skills development, considering that these were identified as key challenges facing the country. However, it was disappointing to hear that the sector was shedding jobs, meaning it was failing to deliver on its mandate. She supported coordination and collaboration with the Department of Science and Technology (DST), as it had the budget that focused specifically on innovation. What was the role of the SACF in ensuring that there was public participation? She suggested that the SACF could petition online on the issue of the delay in e-participation. This was a very effective platform to raise concerns and come up with possible solutions.

Mr Sammy Mafu, General Manager: Marketing, Broadband Infraco, said he supported the innovation by SAPO to become a landing zone for broadband rollout, but there needed to be a distinction between what was needed. It was not the core business of SAPO to be involved in a transmission network, operation centres and engineering at this level, and it would be smarter to partner with the service providers whose core business would enable it to achieve those objectives.

Mr Setumo Mohapi, CEO, Sentech, stated that the sector needed to spend more time thinking about the future than obsessing over past mistakes, especially since other countries had already implemented 4G and were moving to 5G. The country needed to start implementing policies and hoping they would work to deliver the desired outcomes. The market of “internet of things” (connected devices) was expected to increase from $4.9 billion in 2015 to $25 billion in 2020, and from an economic point of view the market was expected to grow from $1.9 trillion in 2013 to $7.1 trillion in 2020. This clearly illustrated how the sector was expected to contribute massively to economic development. The market for mobile commerce was expected to be about $1.6 trillion in 2018 and this was just for data bundles. The debate around the digital divide seemed to focus on access to e-commerce services based on the availability of broadband without paying more attention to services that were enabled by the “internet of things”. He also supported the idea of implementing the policies and asking questions later.

Mr Dimitri Martinis, CEO, MCM Digital Media, asked whether the idea of setting up wi-fi hotspots at post offices would involve a Public Private Partnership (PPP), given the current constraints at SAPO. Small, Medium and Micro Enterprises (SMMEs) needed to be involved in the sector, rather than just being users.

Dr Marcia Socikwa, Executive, Cell C, urged the delegates to have a discussion about the future, as it would be pointless to talk about the past without a clear strategy on what to do in the future, and it was high time that the decisions were made on the basis of facts.

Mr Kinana Themba, Group Executive, Vodacom, asked whether as a country there was a shared view regarding the role of the post office so that one could locate the role of the post office in a particular context. The country might have the most wonderful legislative framework in the world, but if the practice was different, then it nullified everything. He argued that each country should consistently review the national account statistics in terms of revamping and updating their base years and improving their collection, including through expanding their coverage. This was important because if the interpretation of numbers was out-dated, then this was likely to lead to a skewed implementation of policies.

Mr Nkosi Dlamini, BEE Strategist, Cape Chamber, opined that there should be more coordination and harmonisation in different policies and e-strategies, as this would avoid the duplication of infrastructure. It was high time that the delegates stopped dwelling on what had gone wrong in the past and started coming up with solutions and a way forward to deal with broadband connection in the future. He commended the innovation in the post office, as they needed to come up with a different approach to capitalise on the ICT sector. The fund for SAPO could be budgeted for so as to be utilised effectively as there were lots of departments that were using funds for ICT without knowing what they did with the funds.  The newly created Department of Small Business Development (DSBD) could play a collaborative role with SAPO, as this could assist in the fight against unemployment and poverty.

Ms Rossana Gell, Senior Manager: Market and Competition Regulation Regulatory Affairs, MTN, stated that Research and Development (R&D) would remain crucial for the sustainability of the sector; hence other countries had now started to pay more attention to conducting proper research and forecasting the path that was likely to be taken by the sector in the future.

Mr Graham Beneke, co-chair of Internet Service Providers’ Association (ISPA), said what had clearly come out strongly in the two days of the seminar was the issue of coordination of infrastructure, and reducing duplication within the government, public and private sector structures. The only way to achieve coordination was through information sharing as part of the strategy of improving broadband. Coordinating the deployment and the rollout of infrastructure was needed to avoid the issue of duplication and excessive capital expenditure. The core of information sharing was geographical information, mapping information and geo-coding. It was interesting that SAPO was planning to use geo-coding to develop data so as to provide emergency services, but it was not yet clear whether such data would be made available freely or would be monetised in order to generate revenue. 

Mr Zami Nkosi, CEO, USAASA, believed that the biggest stumbling block to government’s ability to deliver services was bureaucracy. There were more than 195 local municipalities that did not have access to broadband, defined as under-serviced, and still utilising 2G. There were over 24 000 public schools that were supposed to give education to the majority of South Africans, and few of those schools had been connected to broadband. The undelivered textbooks still remained a persistent problem that should be addressed urgently if the country was serious about skills development and the plight of the poor. There were about 1 100 police stations that were still not connected to broadband and there were still situations where serious cases of murder and rape were withdrawn because of missing dockets.

What was now important, particularly for politicians, was to have a debate around the possibility of merging USAASA with MDDA so as to deliver to the masses. The country had one of the best policies and strategies in the world, but was still failing dismally on the implementation and we needed to start worrying about ways in which this non-delivery of basic services was having an impact on ordinary people.

Ms Lulama Nongogo, Executive: Stakeholder Management and Government Relations, Telkom, supported the idea of SAPO linking up with the DSBD so as to work hand-in-hand with SMMEs to empower HDIs. There was the problem of a lack of adequate data or knowledge that informed some of the decisions that get taken, especially data on the number of hubs or structures that could be used for a certain purpose.

Ms Sharif reiterated that skills development was critically important for the sustainability of the sector, hence there was much emphasis on improving the overall quality of education in the country. The DTPS had changed its strategy to focus on combining policies with limited resources and action and this strategy focused more on the execution of policies. There could be talks about the importance of e-skills, but without proper legislation that governed the need for e-skills development in the country, the process was likely to drag. The e-skills intervention was endorsed by the International Telecommunication Union (ITU) and the only stumbling block so far was how to bring the right amount of money in order to fast-track the shortage of e-skills.

Mr Gaitsiwe Lenepa, Board Member, Ikamva National e-Skills Institute (INESI), stated that the issue of “brain drain” affected the development of the African continent, as those with critical skills were recruited overseas, and this was especially the case with ICT skills. The country should start looking at ways to retain and develop the local skills as there was currently no strategy in place to retain the current skills available in South Africa. Although there were ideas on to what to do with SAPO, there was still no concrete business model that could be brought to the Portfolio Committee and there was a need to question the relevance of the post office as a sector. He asked whether, if post office became the landing zone for the delivery of broadband and switched over to digital forms, it would still amount to a post office. 

Ms Braithwaite-Kabosha mentioned that according to the study done by World Wide Works (WWW), the cost of internet access was $29.2 billion, investment and data infrastructure $15.5 billion and e-commerce at around $11.5 billion, online advertising $1.5 billion and government spending and broadband access $1.28 billion. This clearly illustrated that the internet economy was almost the same size as the GDP of the Northern Cape, which was about 2.3% of the GDP.  She appreciated the suggestion to petition online on the issue of delay in e-participation and hoped that this was an effective platform to raise the concerns and possibly come up with solutions.

Mr Petzer indicated that even developed countries like the USA still prioritised universal broadband service to ensure all citizens had access to internet services. The digital dividend frequencies (700MHz) were the ideal spectrums for rural areas. He also urged the delegates to focus on the future without forgetting the mistakes that had been made in the past.

Mr Nongogo opined that it was important for SAPO to maintain its main core business, but there was infrastructure in place to land broadband at the particular site. A Public Private Partnership (PPP) would certainly play an ideal role and SMMEs could pick it from that and develop whatever business model they wanted to do. There seemed to be a forced convergence or relationship between the post office and ICT. The discussion was made more difficult by the fact that the country came from an era where the post office was the main source of communication and the question needed to be asked whether the sector was involved in the business of communications or logistics. It was difficult to figure out exactly what the role of post office was, as it did not fit as a player to any of the key functions of ICT, including telecommunications, broadband, ICB or broadcasting. He highlighted that SAPO could only become an enabler, rather than a deep core player in the delivery of broadband in the ICT space, and the Portfolio Committee needed to discuss this issue and delve into a business model which could be sustainable for the sector. 

The Chairperson thanked everyone who had contributed to the engagements from the first to the second seminar. It was quite clear that it was a fierce debate with great innovations and suggestions, and it had come out sharply that ICT services should be regarded as a basic human right. It was now high time that that the country dealt with the issue of policy delays and expedited the implementation of the policies. The Committee had already engaged with SAPO to deal with how the sector could benefit from the opportunities presented by the ICT sector. There was a need to explore the mechanisms in place in order to acquire the funding for broadband connectivity in rural areas, as this was where it was unlikely to be profitable and attractive to service providers. 

The meeting was adjourned.