Budget Briefing

COMMUNICATIONS PORTFOLIO COMMITTEE
15 May 2001
BUDGET PRESENTATION

Chairperson : Mr Kekana

Relevant Documents
Budget and Programme Objectives 2001/2002: Vote 25
Director General Department of Communication Presentation
Emergency Service Infrastructure

SUMMARY
The Director General presented the Department's plans to implement a new emergency services infrastructure. The new emergency number was an attempt to overcome existing problems within the emergency service infrastructure. The Department budget and programmes were presented to the committee. ICASA asserted that bringing the Second National Operator into operation would cost approximately R 34 million, which ICASA did not have as the Department had made only R 5 million available to ICASA. The Director-General alleged that an ICASA member had not disclosed a conflict of interest with regard to the Second National Operator.

MINUTES
New Emergency Service
Mr Andile Ngcaba, the Director General of the Department of Communications, presented the committee with the departments plans to implement new emergency services.

Mr Ngcaba informed the committee that the department intended to overcome problems such as jurisdiction and response time. The new system was based upon a centralised switchboard that would forward matters to the appropriate emergency service. Furthermore, emergency services could be requested via any form of communication at no extra cost to the individual.

Discussion
Ms Smuts (DP) asked whether or not fire stations would be provided with tracing technology and thus know the origin of a call without the caller having to disclose their location.

The DG replied in the affirmative and added that the new system would also make use of a Global Positioning System (GPS). Furthermore, the new system would make use of the Sentech radio network which provided radio coverage throughout South Africa. The DG commented that this radio infrastructure would reduce the cost to the government by a little over R 100 million.

Ms Vos (IFP) asked whether an analysis of resources and manpower had been performed by the Department. Ms Vos said that her question was aimed specifically at evaluating expected response times and resources that could be expected of emergency services using both the new system and existing resources.

The DG stated that the new system would result in the optimal use of existing resources and manpower specifically through the elimination of a multiplicity of responses. The DG claimed that the new centralized system would ensure appropriate and proportionate response.

The committee agreed that the new emergency number should be well publicised in the media.

Budget
Mr Ngcaba presented the budget to the committee.

The DG highlighted that the Department had undergone transformation and had shifted its resources from matters such as Telecommunications, Broadcasting and Postal to E- commerce, Mobile Commerce, Multi-media, E-strategies and E-communications.

Key policy outputs in relation to broadcasting, explained Mr Ngcaba, included the emergence of a community media, a public and commercial split within the SABC and the establishment of digital and programme production advisory board.

The DG highlighted key policy outputs in telecommunications including the establishment of 112 emergency centers, the licensing of the Second National Operator, the initial public offering by Telkom, the Institute for Satellite and Software Applications (ISSA), the establishment of Department of Communication Internet labs and a multimedia service by Sentech.

Key policy outputs by the Department in relation to postal services included the establishment of a regulator, public information terminals, the restructuring of the Postbank, the rollout of physical addresses, the citizen's post office and the creation of multipurpose community centers.

Discussion
Ms D Smuts (DP) reminded the DG that the Department had committed itself to rolling-out a digital network and claimed to finance 36 radio stations. Ms Smuts asked when the digital network would be up and running, and requested a listing of the radio stations that the Department claimed to fund. The DG replied that the information requested relating to the radio stations was contained on the compact disk that was handed out at the beginning of the meeting. As far as the status of the digital network, the DG asserted that all projects undertaken by the Department were long term and that the emergency response project began three years ago.

Ms Vos (IFP) asked what steps had been taken by the Department in relation to local content development adding that she was of the impression that content development was an ICASA matter. The DG responded that a content advisory board existed that consisted of individuals who were part of local production organisations. According to the DG this board would approach Parliament so that a concrete policy framework could be arrived at.

Mr Hlokwe (ANC) asked why there was a lack of transformation in the advertising industry and whether the department saw the need for review in this area. The DG agreed that this was a private sector driven by the public and hence it was necessary to address the issue of advertising to ensure the empowerment of previously disadvantaged people, and women.

Ms Smuts (DP) asked the DG what empowerment related steps had been taken in relation to women. The DG stated that the Minister had provided for empowerment in all of the departments activities. The DG contended that the empowerment policy had been especially emphasized with regard to women. The DG highlighted that certain contracts had been awarded to women run firms. The DG added that ISSA, a research and development organisation dealing with the development, production and maintenance of satellites employed over 150 students with over 50 percent of these students being female.

Post Office Services
The DG informed the committee that the post office had succeeded in providing physical addresses to people who previously lacked addresses. The DG added that the Postbank would be a completely separate entity to the post-office. A member asked whether the Postbank would be regulated by the Banks Act. It was suggested that the Postbank be regulated by the Banks Act but be subject to concessions. Furthermore it was suggested that in as far as the Postbank was a provider of welfare, minority interests should be protected and provided for. In addition, previously disadvantaged individuals should be utilized in the establishment of the Postbank as a separate corporate entity.

The DG informed the committee that an internet directorate may be formed to regulate certain areas and educate the public about the internet in general. The directorate would interact with other international organisations and would regulate areas such as domain name registration and promote the use of the internet. The DG also said that a virus monitoring organisation may be formed to curb the proliferation of computer viruses in South Africa.

Discussion
Ms Smuts (DP) interjected and asked the purpose of such an organization and whether its establishment was necessary. The DG replied that most other nations with developed information networks had institutions for the protection of government networks as well as civilian computer systems. The DG argued that if South Africa were to make any substantial technological advancement such an institution would be indispensable.

Mr M Langa, the chief executive officer of ICASA, said that bringing the SNO into operation would cost approximately R 34 million, which ICASA did not have. He said that the Department had made R 5 million available to ICASA and that ICASA required a further R 29 million.

The Chair added that a Second National Operator providing telephone services would benefit the consumer as a result of inevitable competition.

Ms Smuts (DP) reminded the committee that adjustments to the budget allocations were only available for unforeseeable costs, which arose subsequently. Ms Smuts (DP) asserted that the Department would have to reallocate existing departmental funds since the funds needed to establish the SNO did not meet the criteria for the allocation of additional funds.

Mr Ngcaba addressed the Chairperson and alleged that Yassiem Carriem (ICASA member) had not disclosed a conflict of interest. The Chair insisted that the matter be dealt with in a proper manner after the meeting. The Chair added that the awarding of contracts relating to the SNO involved large quantities of money and other interests and hence disclosure of all interests was of the utmost importance.

The Chair asked the DG to explain the concept of a "fixed wireless". Mr Ngcaba explained fixed mobile technology is used to provide telephone services in remote areas. Telkom phones located in rural areas are fixed in that they are housed by a phone booth, however, due to its location the phone uses the same wireless technology used by cellular phones. Fixed mobile technology can provide limited or scaled mobility. This means that a person could use their telephone exclusively inside Soweto and not pay as much as someone whose phone has national mobility. The DG added there are those who would prefer to see this technology remain unimplemented as the technology would change the distribution of power and market share within the telecommunications market.

The DG stated that the cost of transfer through fixed links would decrease as a result of the new fixed mobile structure. Presently fixed transfer rates exist at rates negotiated amongst Telkom and service providers. The DG affirmed that a fixed mobile structure would result in a transfer rate more favourable for the consumer. The DG added that the Department wanted to deregulate the provision of fixed links through which calls are transferred from one medium to the other. The DG stated that this deregulation would be done to promote SMMEs and consumer interests but stated that this deregulation was contrary to requests from existing service providers who would prefer to provide these fixed links themselves and thereby maintain their market share.

The meeting was adjourned.