Department of Communications Annual Report: briefing

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
28 October 2004
DEPARTMENT OF COMMUNICATIONS ANNUAL REPORT: BRIEFING

Annual Report presentation
Department Annual Report 2003/04 (Website address: www.doc.gov.za )

SUMMARY
The Department reported on its achievements over the past year to the Committee. Many questions were raised by the Committee including questions on ICASA, the 112 emergency call centre, under-spending, the commercialisation of SABC, the .ZA Domain Name Authority, the registration of private couriers, Citizen Post Offices and Public Internet Terminals and the allocation of the remaining SNO shares

MINUTES
Ms Lyndall Shope-Mafole, Director-General (DG), presented the Department's annual report. She noted the importance of a favourable Information and Communications Technology (ICT) environment for the country's socio-economic development, especially its educational impact on schools. The importance of the Convergence Bill in integrating technology and broadcasting was discussed. The Director-General went over an overview prepared by the Minister. In the overview there were references to the World Summit on Information Society (Geneva 2003; Tunis 2005), the Digital Migration Strategy, the corporatisation of Channel Africa and the Post Bank which aimed at providing services previously provided by mainstream banks only, the .ZA domain name Authority and the Presidential National Commission dealing with the development of an information society.

Ms Shope-Mafole provided an update in all key programme performance areas. The rollout of two Regional Language Television Services was expected to start in 2005/06 financial year. The Multimedia Business Unit had purchased equipment for allocation to seven radio stations in Gauteng and the Western Cape. The unit had also facilitated a distribution platform through SENTECH for signal distribution. SENTECH had reduced tariffs for community radio stations dramatically . The Unit had also facilitated the Construction of a Satellite Communication Network for Community Radio Stations.

The Postal Services division had rolled out 700 Public Internet Terminals (PIT) in post offices and Multi Purpose Community Centres throughout the country. The PITs would have a billing system that would not include Government Sites. The Department had managed to roll out 14 Citizen Post Offices in various parts of the country and ten more would be rolled out during the 2005 financial year. On the international front, South Africa had been elected to chair the Pan African Postal Union and to be the Vice Chair of the Universal Postal Union.

The Second National Operator (SNO) had been delayed. The allocation of the final 25% of shares needed to be finalised. Six bidders had shown interest and two were selected. Mention was also made of the Emergency Communications call centre.
The establishment and functions of the Postal Regulator were noted.

Finally the Department's compliance with the Public Finance Management Act was discussed. [See document for details].

Discussion
Ms D Smuts asked the following questions:
- why the Department had allocated R45 million more to ICASA
- she was unclear about the VAT problem at ICASA.
- the Department had assumed the role of the Media Development and Diversity Agency by allocating equipment to community broadcasters
- why the 112 emergency call centre had taken so long to get off the ground
- what the reason was for the Department's under-spending.

Ms P Ntombela-Nzimande (Deputy Director General) replied that ICASA had required a greater allocation in order to be able to function effectively. Treasury in consultation with the Department had decided not to charge ICASA for VAT.

The Community Broadcasting sector had to exploit cutting-edge technology so as to service their respective communities effectively. The National Community Radio Forum had distributed the equipment to deserving stations.

Ms Ntombela-Nzimande noted that R8 million had been required to get the 112 emergency call centre going. The call centre needed the cooperation of many partners such as health services, the police and service providers like Vodacom. Treasury had advised the Department to explore public private partnerships in ensuring the success of the project.

The Department had under spent because new posts had been frozen. The human resources department had not been recruiting due to the restructuring.

Mr K Khumalo (ANC) asked what had happened to the commercialisation of SABC stations. Further, he asked about the discrepancy in the financial report.

Ms Ntombela-Nzimande replied that the enabling legislation for commercialisation was in place and the responsibility remained with the Broadcaster. With regard to a discrepancy, some of the money not reflected had not been in the Department's account.

In reply to the Chair's enquiry about R1 million being spent on the office of the Deputy Minister, she said that it was spent on infrastructure such as computers, software and desks.

Mr Oliphant enquired about the progress of the Presidential National Commission project.

Mr Kholwane asked why the three year Strategic Plan was not presented to the Audit Committee, and why the Department kept under spending. He asked about progress on the .ZA Domain name, the registration of private couriers and the development of Citizens' Post Offices (CPOs) and Public Internet Terminals (PITs) in rural areas. When would the remaining 26% of the SNO shares be allocated?

Ms Ntombela-Nzimande replied that PITs had not been rolled out according to plan because of budget constraints. The roll out had targeted thirteen developmental nodes. The Department had been working with Government Communication and Information System in the roll out of Multi Purpose Centres where the CPOs would be situated.

With regard to under-spending, the Department had finalised strategic planning to overcome under-spending in future, they had appointed five Deputy Directors General. On the Domain Name Authority, the Post Office was the preferred authority.

The registration of private couriers had been expected to be finished by April 2004 but the enabling legislation had not been promulgated then. Registration would begin as soon as the Act was promulgated.

The DG explained that the SNO had been delayed by industry players. Stakeholders had been discussing the shareholder agreement, six bidders had indicated interest and only three had submitted written applications. Two had been selected, Old Mutual and Tata Africa from India, each bidder needed R1 billion and the licensing period would be before the end of April 2005.

Mr Pieterse (ANC) asked what was the difference between the Citizen's Post Office and the regular Post Office.

Ms Ntombela Nzimande replied that the CPO had eight computer terminals, a fax, a printer with a local manager and citizens had to take care of repairs. A regular post office only catered for the traditional postal services and repairs were done by the Post Office.

The Chair asked when the Post Office would cease to be the sole service provider for letter posting.

Ms M Kutta, General Manager of the Postal Regulator, replied that the monopoly would end after the audit of services offered by the Post Office.

Mr Pieterse (ANC) asked why rural Post offices were ill equipped compared to Post Offices in urban areas.

Ms M Morutoa (ANC) asked why they were not seeing the use of captions for deaf people on television. How did the Department inform people about CPOs?

Ms Ntombela-Nzimande replied that her Department had prioritised people with disabilities with regard to broadcasting. She added that as they rolled out CPOs, announcements were made in the media.

Ms L Yengeni (ANC) asked why there been interest in broadcasting the Shabir Shaik trial. Further, with regard to expenditure for what was the money in the line item, legal spending, used?

Ms Ntombela-Nzimande admitted that the Department had failed to be explicit in the expenditure report about their use of legal services. The international agreements which had been signed by the Department had needed legal scrutiny and there were other legal services required.

The Director-General explained that the SABC had to answer for themselves why they wanted to broadcast the Shabir Shaik and Mark Thatcher's trials but not the Boeremag case.

Ms Mokoto enquired about the implications of under-funding ICASA because TELKOM, Multichoice and the SABC were complaining that the regulator had not been adequately funded. How did the Universal Service Fund help under-served areas.

Ms Ntombela-Nzimande answered that the Department had prioritised ICASA but the overall decision remained with how much the Treasury would allocate. The Department had to get approval of Treasury to access the Universal Service Fund.

The DG added that South Africa had not appreciated the role played by ICASA in stimulating the economy and regulation of broadcast content. Internet webcasting had not been regulated, but broadcasting had been regulated. International approach had been slowly changing after the 9/11 events. South Africa had been part of these developments.

Ms N Magazi asked what was meant by the declaration of an unqualified report by the Auditor General.

Ms Ntombela-Nzimande replied that an unqualified report meant the Department had followed correct procedures and had accounted for everything.

Ms Smuts asked what had happened to the Capital Radio.

The DG replied that Capital Radio had been broadcasting on Medium Wave and MW had limited capacity. Stations had been broadcasting in FM even community stations. When the station was put up offer to buyers, nobody had indicated interest. She said Capital Radio had been overtaken by events.

The meeting was adjourned.