contributing to south africa’s growth usaasa: budget, strategy plan and priorities for 2008/09...

Contributing to South Africa’s Growth

USAASA: Budget, Strategy Plan and Priorities for 2008/09

Presentation to the Portfolio Committee: Communications

18 March 2008Parliament

Outline

• Introduction– The Board– Executive Management

• The Agency within the ICT Framework – Universal service and access evolution– ITU criteria on universal service and access– Legislative evolution

• Legacy Projects– Support to Legacy Projects: Rehabilitation to School Cyberlabs– Legacy Projects: Rehabilitation of Telecentres– Current Projects:

Training, PUSANO• Financial Review: USAF and USAASA• Strategy Plan and Priorities for 2008/09:

– Turnaround Strategy– Focus Areas– USAF Budget – MTEF 2008/11– USAASA – MTEF 2008/11

• Challenges and concluding remarks

USAASA Board

USAASA Executive Management

Mr. James Theledi: Chief Executive Officer

Dr. Sharon HortonHead: Corporate

Affairs

Mr. Winile LamaniHead: USAF

Projects

Mr. Keith KeysChief Financial

Officer

Mr. Phineas MoleeleHead: Legal

& Regulatory

VacantHead: Research

& Strategy

VacantHead: Human

Resources

The Agency Within the ICT Framework

James Theledi

Universal Service and Access Evolution

1907

TheodoreVail: AT&TPresident

TheodoreVail: AT&TPresident

• “One System, One Policy, Universal Service”

1934

CommunicationsAct 1934 (USA)

CommunicationsAct 1934 (USA)

• Preamble: “To make available to all the people of the United States, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.”

• USA establishes the Universal Service Administrative Company (USAC) to administer and manage the USF.

• USAC collects more than $7.5 Billion from Telecoms Operators Annually

• Other countries follow the example of USA and implement their own universal service strategies:

• Chile: Telecommunications Development Fund

• India: Universal Service Obligations Fund• England: Universal Service Obligations

ITU Criteria on Universal Service & Access

General principles

• Availability: National coverage of ICT services

• Accessibility: Users treated alike, non-discrimination i.t.o. price, service quality irrespective of locations, race etc.

• Affordability: Voice and data services should be priced so that most users can afford

Criteria

• Definitions - Develop appropriate definitions of Universal Service and Access

• Information - Collect relevant information

• Targets - Establish targets preferably in licence conditions

• Affordability - Ensure affordability

• Funding mechanism - Establishment of Universal Service Fund

• Technology - Cheaper access technology

• Monitoring - Monitoring (and enforce) progress and targets

ICT market growth vs Universal Service & Access

• Government recognised the positive impact of improved ICT rollout on economic growth and well being of society

• Access gaps are left while market concentrates on high end customers

• Industry will not bring about higher levels of penetration of ICT services at affordable costs

• Market structure dominated by fixed line incumbent and cellular operators

• Costs to communicate remain high i.e. prepaid offerings

• USAASA exists to close the gaps the market has failed to address

• USAASA to utilise the USAF to facilitate the closure of access gaps

• USAASA is needed to do evaluation and monitoring of access gaps

Legislative Evolution in South Africa

Future1996

TelecomsAct

(Act 103 of1996)

TelecomsAct

(Act 103 of1996)

• The Agency (USA) established under Chapter VII

• The Fund (USF) established under Chapter VIII

• Exclusivity period granted to Telkom

2001

TelecomsAmendment

Act(Act 64 of

2001)

TelecomsAmendment

Act(Act 64 of

2001)

• Amendments of Sections 58, 61, 65, 66 and 67

• Insertion of Section 67A

• Provision for USALs

2005

ElectronicCommunications

Act(Act 36 of

2005)

ElectronicCommunications

Act(Act 36 of

2005)

• Renaming of the Agency (USAASA) and the Fund (USAF)

• Extended mandate

Variance between Rural and Metro ICT penetration

Source: AMPS 2006

23%

2%

63%

13%

55%

69%69%76%

81%

60%

18%

13%

6%

19%12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Less than500/ Rural

500 - 39 999 40 000 - 249999

250 000+ Average

Cellphone

Land line

PC

Community size From BMI T

Communications penetration by Income Group

42%

16%

31%

69%

46%

68%

26%23%

3%11%13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UP to599

600 to999

1000 to1599

1600 to2999

3000 to 4999

5000 to 7999

8000 to 13999

14000+ GrandTotal

Cellphone- 2003 Cellphone-2006Land line- 2003 Land line-2006PC- 2003 PC-2006

-3%

+2%

Average

Huge increase in cellular access Reduction in fixed line accessMinimal increase in PCs in the home

R/m

+30%

+27%+37%

Source: BMI T

Legacy Projects

Support to Legacy Projects

Province WC EC KZN FS NC NW LP MP GP Total

Cyberlab 2 5 8 13 3 9 9 11 5 65

Equipment PC’s, printer, copier, VSAT

PC’s, printer, copier, VSAT








Rehabilitation ProgrammeSchool Cyberlabs

Challenges• No mechanism for monitoring and evaluating real impact: usage of Cyberlabs

by learners• Lack of coordination with other parties providing similar facilities i.e.

Department of Education, Khanya, Gauteng Online, CSI

Support to Legacy Projects

Province WC EC KZN FS NC NW LP MP GP Total

Telecentres 2 4 4 4 4 2 2 5 3 30

Digital hubs 1 1

Equipment 10 PC,s and

VSAT

10 PC,s and

VSAT

10 PC,s and

VSAT

10 PC,s and

VSAT

10 PC,s and

VSAT

10 PC,s and

VSAT

10 PC,s and

VSAT

10 PC,s & VSAT

10 PC,s&VSAT

Rehabilitation ProgrammeCommunity Access Centres; 30

Total of 30 Telecentres were rehabilitatedDigital Hubs – 1 Cradock Digital Hub

Challenges• No mechanism of monitoring and evaluating real impact: usage of Access

Centres by the community• Lack of coordination with other parties providing similar facilities i.e.

Operators, CSI

Current Projects

Training

• Microsoft Training:

– Assessors and Moderators (Unlimited Potential Curriculum Programme) – Telecentre Managers

– Train the Trainer Programme: 30 Telecentre managers

– Digital Literacy: Free Online Training

• Training Partnerships

- INK Hub Training: (100 students trained on ICDL - Women and Youth in Business -60, Community radio personnel – 20 and Local civil society organisation – 20)

- Fort Hare University: (15 Telecentre managers trained on basic computer skills)

- DoE, DoC and Isett Seta FET Skills Training

Current Projects

Group Photo: USALS – 21/02/2008

PUSANO Process

- Ministerial Policy Directives on PUSANO– Working group between USAASA, DoC & ICASA to accelerate

PUSANO process– ICASA process of licensing - Continuous meetings with USALs- Funding requests attended according to individual merits

Financial Review

Financial Review: USAF Budget

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Total

Opening balance 32,892 37,179 58,811 86,449 88,327 61,267 22,513 23,479

In year Allocation 25,595 22,486 23,679 24,745 26,230 29,400 31,164 32,722 257,034

other income 1,966 2,917 6,305 6,933 4,583 3,261 2,122 4,158 38,271

Total Available 60,453 62,582 88,795 118,127119,14

0 93,928 55,799 60,359 295,305

Expenditure 23,274 3,771 2,346 29,800 57,873 71,415 32,320 60,668 295,614

Unspent funds 37,179 58,811 86,449 88,327 61,267 22,513 23,479 -309 -309

Treasury is correct i.t.o. USAASA capacity to spend in the past - this demonstrates USAASA is spending guided by a strategy to work with partnerships to address the gaps

2007/2008 USAF Expenditure

Schools Connectivity and Rehabilitation: R30,607m

Community Access Centres Connectivity and RehabilitationR13,339m

USALS SubsidiesR11,624m

Training R ,868m

Research R ,563m

Project Costs and Audit Fees R 1,116m

Financial Review: USAASA Budget

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Total

Opening balance 1,806 3,256 5,152 2,889 1,456 -343 -571 1,203

In year Allocation 9,641 10,205 10,711 14,211 15,884 17,500 20,100 21,105 119,357

other income 28 18 94 1,191 629 135 123 0 2,218

Total Available 11,475 13,479 15,957 18,291 17,969 17,292 19,652 22,308 123,381

Expenditure 8,219 8,327 13,068 16,835 18,312 17,863 18,449 21,703 122,776

Unspent funds 3,256 5,152 2,889 1,456 -343 -571 1,203 605 605

Strategy Plan and Priorities for 2008/09

Turnaround Strategy

• Support the Government Business Unusual theme

– Economic Cluster

– ISAD Cluster Apex Project

• Strategic goals & objectives:

– From implementer to facilitator, advisor and monitor

– Elevate the role of the Agency and its impact

• Support processes of DoC and ICASA

• Cooperation through partnerships

– MOU’s and Public Private Partnerships

– Forum of contributors

• Manage the USAF

– Collect contributions from operators

– Define access and subsidy rules

Focus Areas

• Fund Manual– Standard Operating Procedures– Fund manual – 31 October 2008– Competitive bidding process (reverse-auction)

• Project Sustainability Plan– Business plan– Skills development plan

• Subsidy Focus– Internet Connectivity to Community Access Centers

Libraries, Telecentres, Digital Hubs, Kiosks– Infrastructure

• Training – Capacity building initiatives

• Research– Definitions on Universal Service and Universal Access– Universal Service Obligations– GIS Web Mapping

Funding – USAF & USAASA2008-2011

USAF Planned Budget MTEF 2008/11

2007/2008

Projected 2008/2009 2009/2010 2010/2011

USAF Projects32,722,000

34,581,000 36,389,203 36,399,436

USAF Planned Budget MTEF 2008/11

Project Outcome 2008/2009 2009/2010 2010/2011

Develop a Universal service & access strategy

Fund policy, Fund manual, Identify ICT schemes, subsidy model and competitive bidding process completed 1,500,000 - -

Subsidise FET colleges Subsidies paid to FET where SLAs have been signed 2,700,000 5,687,820 6,823,061

Connect Thusong Service centres ICT blue print for TSC's implemented, 5,000,000 5,485,938 5,296,810

15% Administration Costs 750,000 822,891 794,521

Rollout community access centres Digital hubs to be completed 4,000,000 - -

New access centre infrastructure - 4,500,000 4,100,000


Subsidise public schools Mindset project (Pilot project) 1,000,100 3,511,351 3,254,685

New school cyberlab - 8,450,000 7,500,000

15% Administration Costs - 1,267,500 1,125,000

Subsidise connectivity to Community access centres Continue Internet payment 1,500,000 750,000 789,975

Subsidise broadcasting infrastructure Low power transmitters 1,000,000 1,053,300

15% Administration Costs 150,000 157,995

Sustainability plan Subsidies to entrepreneurs 10,800,000 - -

15% Administration Costs 1,620,000 - -

ICT Kiosk 525,000 1,105,965 1,747,369

Training 1,785,900 1,881,088 1,981,350

Research Web Portal 500,000 526,650 554,720

Public Consultation on Definitions 2,000,000 500,000 526,650


34,581,000 36,389,203 36,399,436

USAASA Planned Budget MTEF 2008/11

2007/2008

Projected 2008/2009 2009/2010 2010/2011

Fixed costs

- Staff costs

12,542,836 16,128,647 16,935,079 17,849,573

- Operational lease

1,283,881 1,328,630 1,395,061 1,470,395

- Finance lease

- 74,640 78,372 82,604

Variable costs

7,378,552 4,681,050 4,915,102 5,180,518

Capital expenditure 1,562,447 90,000 171,386 180,641

22,767,716 22,302,966 23,495,000 24,763,730

Concluding Remarks

Challenges

• USAASA should be empowered to deliver on requirements placed on it by ECA

– Engaging with DoC & Treasury on expanding resources

• USAASA and USAF Budget allocation

– Ongoing engagement with DoC & Treasury to unlock existing funds

• Control of USAF - Collection & Account

– Development of standard terms and procedures manual

– Addressing method of collection with ICASA and contributors

• Contributions to USAF – Basis, manner & purpose of contributions

– Addressing through public consultations and Fund Manual

• Monitoring and evaluation to measure impact and progress

– Increasing research and monitoring capacity

• Fragmented approach to ICT infrastructure service provisioning

– Encourage partnerships

Conclusion

• Turnaround strategy

• Provision of definitions on under serviced areas, needy persons

• Review of Universal Service Obligations

• Fund Manual

• Partnership and collaboration

contributing to south africa’s growth usaasa: budget, strategy plan and priorities for 2008/09...

Documents