Presentation to the Portfolio Committee on Communication

9 November 2007

2

OUTLINE

• Overview

• Business Performance 2006/7

USAASA

USAF

• Financial Performance 2006/7

USAASA

USAF

• Medium Term Outlook

• Conclusion

OverviewMs Cassandra Gabriel

Chairperson: USAASA Board

4

OVERVIEW

Challenges over the past decade

Evolution of the Agency mandate and strategy

The role of the Agency in managing the USAF was not aligned to its mandate.

Since inception, programmes lacked a sustainability plan

Achievements were never measured

Programme implementation lacked stakeholder participation.

Lack of public awareness of the Agency’s activities.

Business Review

6

Business Review 2006/7

• USAASA Focus on Agency stability. Translating the new mandate into new strategy. Implementing a turn-around strategy to reposition

the Agency. Bringing in needed skills and capacity. Audit of all funded projects. Addressing funding challenges.

7

Business Review: USALS Subsidies (1)

Plan Target AchievementReason

(Non-Achievement)

Subsidise New USALs

14 Not achieved

No new USAL licenses were issued by ICASA during the year under review.

Subsidise Existing USALs

6

A total of R5,95m was distributed to USALs that provided audited financial statements reflecting infrastructure development.

Existing USALs.

8

Business Review: ICT Access Subsidies (2)

PlanTarget2006/07

AchievementReason

(Non-Achievement)

Deploy qualifying projects: MPCCs Telecentres, Community Telecentres and Telecontainers

20 (New)

14 new Telecentres were established during the year under review.

6 not-complete: ownership issues with the relevant municipalities.

139 (Maintenance)

102 subsidized for equipment maintenance. Connectivity for 114 centres has been paid for in full by USAF.

Existing sites maintained.

9

Business Review

• Since inception the Agency launched 154 Telecentres.

10

Telecentre at an MPCC

11

Telecentre at an MPCC

12

Training Courses at a Telecentre

13

Training Courses at a Telecentre

14

Container Telecentre

15

Container Telecentre

16

Container Telecentre

17

Container Telecentre

18

Container Telecentre

19

ICT Telecentre for the Disabled

20

ICT Telecentre for the Disabled

21

Business Review: ICT Access Subsidies (3)

Plan Target 2006/07 AchievementReason

(Non-Achievement)

Deploy qualifying projects: School Cyberlabs

20 (New) Not AchievedFinancial constraints.

275 (Maintenance)

252 sites were maintained

Financial constraints.

22

Business Review

• Since inception the Agency launched 234 Cyberlabs

23

Cyberlab

24

Cyberlab

25

Cyberlab

26

Cyberlab

27

ICT Connectivity

28

Business Review: ICT Access Subsidies (4)

PlanTarget 2006/07

AchievementReason

(Non-Achievement)

Deploy qualifying projects: Community Digital Hubs

3 (New) Not achieved

Not achieved due to changes affecting the deployment model (demarcation of Provincial Border & ownership model being affected in presidential poverty nodes).

3 (Maintenance) Not achievedNon-utilization of some services in Digital Hubs

29

Business Review: ICT Access Subsidies (5)

PlanTarget2006/07

AchievementReason

(Non-Achievement)

Deploy qualifying projects: multimedia upgrade

40 Not Achieved

Out of the targeted 40 sites, none were deployed due to the organisation conducting a comprehensive review of its programmes.

30

Business Review: Capacity Building (6)

PlanTarget 2006/07

AchievementReason

(Non-Achievement)

e-Readiness Programme

33 (ICT

Training)

30 individuals exposed to training.

N/A

14239 individuals were engaged in refresher course training.

The shortfall is the result of a breakdown in partnership co-ordination.

e-Mails 50All planned connections were achieved.

N/A

Internet connectivity

218USAF continued to fully subsidise connectivity to 203 sites.

A number of existing sites with connectivity were maintained

Community websites

0No new websites established.

N/A

20 All websites maintained. N/A

31

Business Review: Audit Findings

• Community access Centres• Services that require rehabilitation

• Photocopying• Fax• Printing• Scanning• Telephone• Internet

• Training ( Accreditation)• Governance structures• Business and ICT skills training• Strong partnerships with Municipalities ( Oversight )• Schools

Services that require rehabilitation• All computers need to be replaced• Additional services required to enhance learning environment

– Digital Projector– Digital whiteboard

Financial Performance

33

AG audit opinions on USAASA and the USAF

Since 2001 the Agency and the USAF received

unqualified opinions from the Auditor-General

No emphasis of matters during the same period

34

USAASA Expenditure Summary

2006-2007Actual

R’000

Revenue 20,223

Administrative expenses 2,547

Staff costs 9,060

Marketing costs 544

Audit fees 356

Operating expenses 5,942

18,449

Capital expenditure 2,057

20,506

35

USAF Operator Contributions

Operators’ Fund

Year Contributions Appropriations

1998/99 482,000

1999/00 10,000,000 11,295,000

2000/01 10,220,000 25,595,324

2001/02 10,935,400 22,486,000

2001/03 11,438,428 23,679,000

2003/04 26,171,123 24,745,000

2004/05 91,969,066 26,230,000

2005/06 142,229,746 29,400,000

2006/07 151,993,963 31,164,000

454,957,726 195,076,324

36

USAF Summarised Financial Performance

2006 – 2007Actual R’000

Revenue 31,164

Appropriation - DoC 2,122

Interest earned 33,286

Expenditure

Administration expenses 541

Research 2,807

Marketing 1,727

Audit fee 256

Project expenses 1,317

Subsidies 25,530

Operating expenses 142

32,320

37

USAF Subsidies

Communities R 9,303m Access Centre maintenance and Connectivity (R2, 504m) Capacity building (R6, 799m)

Schools R 10,277m Cyber-lab maintenance and connectivity

USALS R 5,950m

TOTAL R 25,530m

MEDIUM-TERM OUTLOOKMr. James Theledi

Chief Executive Officer

39

Strategic Context

• DoC ASGISA priorities Increase access to and enhance the quality of

education using ICTs. Increase access to and improve quality of government

service delivery. To provide robust, reliable, and affordable ICT

infrastructure. Contributing to social cohesion and national identity. ISET ICT Plan

• WTO issues, ICT and Broadcasting policy

40

Repositioning Strategy

• Redefine Universal Service and Access within the developmental agenda and converged platforms.

• Review the role, identity and image- involve stakeholders.

• Identify key partners.• Identify the niche to be addressed by the Agency -

Filling the Gap.• Provide accurate information on universal service and

access gaps and monitor progress.• Review the USAFund.• Address capacity and funding constraints.

41

STRATEGIC OBJECTIVES

• To reposition the Agency as a natural champion of universal service and access.

• To reach every South African excluded from universal service and access to ICT and Broadcasting facilities and services, especially the needy and the disabled.

• To effectively and efficiently manage the USA Fund.• To collaborate with the ICT industry in making ICTs

available, accessible and affordable to all South A Africans.

• To provide rigorous and continuous research regarding universal service and access.

42

Priority Initiatives

Collaboration with relevant stakeholders

Advise Minister and Department on issues impacting on

universal service and access

Expanding universal service to broadcasting and postal services

Central repository of knowledge: Portal

Definitions of under-serviced areas and needy persons, e.g. the

disabled

International benchmarking

Affordability and costs of ICT services

Develop a sustainability model for ICT projects

Monitor and evaluate progress of universal service and access

43

Research and Innovation

• Review current Universal Service and Access regime

and Reports conducted by the Agency.

• Consult the public and make recommendations on

definitions to the Minister.

• Define niche areas of research for the Agency.

• Collaborate with other Research Institutions on ICTs.

• Design programmes and schemes on universal service

and access.

• Monitor and Evaluate progress on Universal Service

and Access.

44

Research and Innovation (2)

PRIORITIES TARGET

Universal Service Policy Framework:

Definitions of universal Service, Universal Access, Under-Serviced Area, and Needy People

31 March 2008

Web Portal Development:

Geographical Mapping of ICT Initiatives in South Africa

31 March 2008

Development of a Policy Document for the Universal Service Obligations of the Electronic Communications Network Service Licensees in terms of the EC Act of 2005

31 March 2008

National Summit on Universal Access and Service July 2008

45

Corporate Services

• Finalise Human Capital, Media, Communications and Marketing strategies.

• Launch of new Agency brand.• Public awareness initiatives in support of Agency and USAF

programmes.• Consolidate Partnerships:

Parliament DoC MDDA GCIS ICASA Industry Civil Society

46

Finance

KEY OUPUTS

Request for more funding : Agency and USAF

Target Unqualified Audit Report for 2007/8 for USAASA & USAF

Appropriate controls to secure assets of the Agency

Effective Supply chain management system in place

Improved turnaround in payment to service providers

Effective financial systems in place

Improved Risk management and controls

Fraud and Anti-Corruption in place

47

USAF

• Access to ICT services

• Connectivity

• Funding Agent

• Enterprise development

• Competitive bidding

• Focus on needy persons and under-serviced areas

• Accelerate infrastructure development

• Training and skills development

• Public awareness campaigns

• Management Information systems

48

USAF: Sibsidising of ICT Access Facilities

Plan Target 2008/09 Target 2009/10 Target 2010/11

Community Access Centres: Restructured governance

model Handover of centres Deploy new mode

141

141 20

0

0 50

0

0 50

Schools & FETs: Connectivity provided at

Cyberlabs Connectivity provided at FETs Rehabilitated Cyberlabs New Cyberlabs deployed

Libraries

2209

34 40 200

0

2209

50 97 200

45

2209

0 97 200

45

Broadcasting: Broadcast Service Coverage

(under-serviced) Access to Broadcasting

Services (under-serviced) Digital Migration

95% TV / 89% Radio

Increased TV/Radio Households

Needy Inclusion

98% TV / 92% Radio

Increased TV/Radio Households

Needy Inclusion

95% Radio

Increased TV/Radio Households

Needy Inclusion

49

USAF: Telecentres Rehabilitation

50

USAF: Telecentres

4 telecentres completed. 24 under deployment. Rehabilitation cost per telecentre: R200,000 Envisaged completion date: December 2007 Equipment supplied includes: Photocopier,

networked computers, server, and internet connectivity.

Deployment of new telecentres = R387,000

51

USAF: Telecentres

Aligned with 6-Block Model Thusong Service Centre Business Plan (2006 – 2014)

20 new Telecentres within Thusong Service Centres per annum (GCIS Target)

GCIS Target: 283 Centres by 2014 (incl. Existing Centres)

Services provided by Thusong Service Centres Block 1: Government Social & Administrative Services Block 2: Office Services (Telecentre) Block 3: Education & Skills Development Services (Telecentre) Block 4: Local Economic Development (LED) Services Block 5: Business Opportunities & Services Block 6: Information & Communication Activities (Telecentre)

ICT Blueprint for connectivity VPN Connectivity to Thusong Service Centres

52

USAF: Cyberlabs Rehabilitation

Cyberlabs

8 schools completed 29 under deployment

Rehabilitation cost per telecentre: R300,000 Equipment supplied: 30-40 new computers, scanner,

printer, Internet connectivity, Laptop for teacher, Interactive Whiteboard,

Envisaged completion date: December 2007 New projects

Target 5 Cost per new cyberlab is R500,000 Envisaged completion date: December 2007

54

USAF

• Schools Current

• +27,000 Schools countrywide

• +7,000 Connected Schools countrywide

• 234 USAASA deployed Schools Future Plans

• Connectivity to Schools & Further Education & Training (FET) Institutes

– Aligned to Telecommunications Operators’ Universal Service Obligations (USO): 2209 Schools per Annum (until all SA Schools are connected)

– 50 FETs in Total

• New Cyberlabs

– 200 New Cyberlabs per Annum

• New Libraries

– 45 per Annum

55

Cyberlab

56

USAF

PROGRAMME INTERVENTION 07/8 8/9 9/10

Rehabilitation:- Telecentres

- Cyber Labs

Digital hubs

- Assist Business plan

- Replace equip- Pay stipends- Remodel governance

- Full replacement

- Finalise the deployment

30

29

02

108

104

-

-

-

-

57

USAF

PROJECTS TARGET

USALS Intensive engagement with USALs and Working Group to finalise new PUSANO business model

Payment of 2nd tranche based on planned infrastructure roll-out for Amatole and Kingdom.

58

USAF: e-Education (Operator Obligations)

MTN, Vodacom, Cell CProvision of Internet Access to Public

Schools Must provide Internet Access to no less

than 5000 Public Schools within 8 years.

Provision of Internet Access for 140 Institutions of People with Disabilities (IPWDs)

required to provide internet access to no less than 140 IPWDs within 3 years.

Provision of Terminal Equipment Required to provide a total number of

1400 Terminal Equipment, consisting of a minimum of 10 Terminal Equipment for each IPWD.

Internet Access must be provided by Licensees at the effective E-rate.

Compliance Reports are to be provided to ICASA once the Licensee’s commence with respective obligations.

SNO Telecoms is required to establish and maintain high speed

internet connectivity to 2500 public schools or public further education and training institutions. This only applies from no earlier than 9 Dec 2007 (2 years after the Effective Date).

WBS WBS is to provide internet access to 1000 rural and

urban public schools by the year 2011.

Sentech Must provide internet access to 1500 rural public

schools by 2014.Telkom Process of imposing obligations on Telkom has not

reached conclusion, but it was proposed that ito frequency application made by Telkom, it be given the obligation to provide:

Internet Access to 140 IPWD; Internet Access to 5000 Public Schools; and 1400 Terminal Equipment to IPWD.

It therefore may be that Telkom is imposed with these obligations.

59

USAF

OPERATOR 07/8 8/9 9/10

Cell C

Vodacom

MTN

Sentech

WBS (Iburst)

Neotel

625

625

625

167

167

636

1250

1250

1250

1 875

1 875

1 875

ConclusionMs Cassandra Gabriel

Chairperson: USAASA Board

61

CONCLUSION

New strategy to deliver on USAASA mandate Operational strategies being implemented Urgent need to internalise past research and learnings Ongoing research required Support from all USAASA’s stakeholders for USAASA to

play a more central and meaningful role in the delivery of universal service and access in South Africa

Problem accessing USAF funds Legislative Amendments needed to EC Act

62

Thank you