Hon Chairperson; hon Minister, Dina Pule; hon Deputy Minister, hon Stella Ndabeni-Abrahams; hon members; distinguished guests; ladies and gentlemen, the ANC-led government has implemented quite a number of strategies and tactics to address various shortages of skills. These include, amongst others, the Joint Initiative on Priority Skills Acquisition, Jipsa; Technology and Human Resources for Industry Programme, Thrip; the Sector Education and Training Authority, Seta; and the Innovation Fund.
Technology is a moving aspect of innovation and it brings a lot of opportunities, especially when tapped in the minds of young people. The ANC 53rd conference re-affirmed the fact that there is a widespread agreement on the importance of information and communications technology, ICT, in building equitable prosperity and a global competitive economy.
However, the effective use of this technology requires building new capacities and skills, referred to here as e-skills, not only in short supply all over the developing world, but also of particular concern in South Africa. The conference acknowledged that South Africa has characteristics of both an advanced and a developing economy. It has access to technology, sophisticated institutions, including research entities and universities, and a strong private sector and fiscal resources.
Locally, e-skills are seen as vital in addressing poverty, achieving sustainable livelihoods, assisting the fight against crime, building cohesive communities and international co-operation, and building a developmental state. This general lack of e-skills is seen by the Department of Communications as a serious impediment to the nation in meeting its commitment to the Millennium Development Goals, the World Summit on Information Society Goals, the New Partnership for Africa's Development, and the South African Medium-Term Strategic Framework.
It is against this background that the ANC's 53rd national conference resolved to promote and support the development of new ICT research and development plans and strengthen existing strategies and policies to foster robust, well co-ordinated institutional arrangements that need the development of indigenous world class technology innovation in ICT through a directed national ICT research development and innovation programme. It is exciting to note that the department has identified e-skills development and ICT research as one of its top key priorities. As far as e-skills are concerned, let me quote from the department's strategic plan for 2013 to 2018:
In order to address the current e-Skills gaps in the country in the short term, the department will prioritise the establishment of a single integrated entity for e-Skills through the collaboration of e-Skills Institute, the National Electronic Media Institute of South Africa, Nemisa, and the Information Systems Security Association, Issa. Over the short to medium term, the newly established single integrated entity for e-Skills will focus on the development of the national e-Skills plan and will implement a range of e-Skills initiatives aimed at increasing the e- Skills capacity across government, business, education, civil society and organised labour.
This is in essence giving effect to the ANC's policy resolution that government must introduce a comprehensive e-skills development plan that will include incentives for mobile industry co-operation for the benefit of the young people. The ANC acknowledges the roll-out of the skills for the school connectivity project. This programme gives the kids tools to enhance their natural brightness through information technology.
With regard to ICT research, I quote:
Programme 3 of the department, Policy, Research and Capacity Development, will have a specific research focus which will entail the development and implementation of a focused research programme, aimed at supporting priority policies. Attention will be given WSIS thematic areas aligned to government priorities, publishing of revised e-Barometer indicators, as well as ITU-D guidelines on Green ICTs.
Good corporate governance remains a very critical area, which continuously requires attention in order to ensure that the department and its entities conduct business in compliance with the various legislative prescripts and regulations.
The key areas at the centre of governance include, but are not limited to, the following: leadership, that means fully constituted votes and executive management; compliance with the Public Finance Management Act and other relevant legislative prescripts; effective governance structures, that is audit and risk committees' management; effective internal controls; and organisational policies.
In the past two years the Department of Communications and its entities have performed as follows: The department received an unqualified audit report; the South African Broadcasting Corporation, SABC, obtained a qualified audit report; Nemisa obtained an unqualified audit report; Sentech obtained an unqualified audit report; Icasa obtained a qualified audit report; the SA Post Office, Sapo, received an unqualified audit report; and the .za domain received an unqualified audit report. [Applause.]
Key issues that have recurred and led to qualifications and emphasis on matters across the portfolio are mainly: a high vacancy rate at the leadership level; inadequacy of proper procedures and systems; noncompliance; irregular, fruitless and wasteful expenditure; weak internal controls; management not doing adequate first level of assurance; and weak internal audit units.
As the Minister has said, the SABC has had its ups and downs, as we are all well aware that we currently have an interim board. [Interjections.] However, let me take this opportunity to commend the members of staff in the organisation at large. Under these difficult circumstances they remained committed to maintaining the public broadcaster's status as a broadcaster of choice.
We note the following progress, for instance. There were fires at the studios that caused major disruptions to operations, but scheduling managed to avoid programme disruptions. During Madiba Month a number of activities were managed and executed; Heritage Month activities were successfully executed; impairments have been managed downwards and the current forecast is R5 million; content policy has been incorporated into the broader SABC procurement policy; and the digital terrestrial television, the DTT, business plan is complete and ready for submission.
I now come to governance matters. According to the ICT Africa analysis studies conducted by Dr Alison Gilward and various literature reviews, the South African telecoms sector has been in flux over the last decade from a policy and regulatory perspective. Suboptimal outcomes after the first phase of reform saw partial privatisation of the incumbent and the entry of a third mobile operator.
Historically, the focus by government on the high cost of communications has failed to acknowledge this as an outcome of its policies, instead highlighting the excesses of network operators and the need to bring political and moral pressure to bear on them. What the sector performance review does is to reveal the links between policy, regulation and market outcomes.
South Africa has had no major policy review of telecommunications since the 1990s, when it embarked on a major consultative process that resulted in a White Paper on Telecommunications and the subsequent Telecommunications Act. This resulted in the partial privatisation of the incumbent, Telkom, in 1997, and the introduction of a third mobile operator after a protracted and highly contested licence processing in 2002.
Therefore, the Minister of Communications must be complimented on the appointment of the ICT review panel. The appointment of the ICT review panel is the beginning of a brand-new future. The key issues that will be looked into will range from constitutional rights to institutional rearrangement. We commend you, Minister, for this initiative. [Applause.]
I now turn to competition. Despite the attempt at creating a horizontal licensing market framework without a fundamental shift in policy, the market remains structured around vertically integrated incumbent operators, with effective duopolies in both the fixed and mobile markets, and despite the entrance of a very marginal third mobile operator in 2002.
Policy and regulation influence the nature of competition and the ability of companies to compete. Minister, it is commendable that you are issuing a policy directive instructing Icasa to take action on this matter. We cannot afford any market failure in this country. We cannot allow the failure experienced by the underserved areas licensees to happen again. I am quoting our former President Nelson Mandela, when he said "never again".
The regulatory framework is currently uncertain in a number of respects. Many of the regulations and other secondary legislation required to fulfil the implementation of the Electronic Communications Act are still pending or not yet proposed. In line with the provisions of the Act, Icasa has instituted a number of processes that have either stalled or not reached conclusion within the statutory period prescribed due to complexity, contradictions with the law or the absence of technical or administrative capabilities. We urge Icasa to take action and move forward. This cannot be allowed. The ANC is not happy about the delays.
South African consumers have long been subjected to some of the highest mobile interconnection rates in the world. Despite having already been in the business for over a decade, with the entry of the third mobile competitor in sight the incumbent mobile operators increased their asymmetrical mobile termination rates from 20 cents to R1,25, an increase of over 500%, while the fixed termination rate was set at 27 cents. This must change. Both the Minister and the ANC have spoken about this. We cannot allow high costs to hamstring communications in this country. [Applause.]
As a result of the parliamentary portfolio committee's intervention to bring down the costs of interconnections, Icasa laid out a schedule to issue interconnection regulations by June through the Electronic Communications Act, chapter 10, "market definitions" and the dominance assessment process. Its failure to issue any regulations in over 18 months and the continued reduction of qualified competition staff suggests that this is going to be a tough deadline to meet.
Recommendations for resolving the key issues in order to foster competition are as follows: We need to develop a common vision for the sector through the development of a clear policy framework to promote competition in the market; and we need to develop co-ordination of state enterprises and the targeted universal service strategy to deal not only with the gaps in the market, but also to demand side stimulation of the market that is in line with the ANC's Mangaung resolution.
We need to create a strong and autonomous institutional arrangement with adequate resources and capacity that will enable the effective regulation of dominant players in the market and anticompetitive behaviour; we need to streamline a policy and regulatory processes to prevent regulatory bottlenecks and to attract internal investors; we have to examine the equitability of licence costs and their rights; we should complete the competitive entry regulation such as carrier pre-select, essential facilities regulation and local loop unbundling; and we need to revise wholesale regulations, including clarifying interconnect glide path regulations.
We in the ANC, the majority party in this House, regard communications as a strategic tool to speed up service delivery.
It is our considered view that the Department of Communications needs a management that is prudent and understands good corporate governance for it to fully achieve its mandate. The successful implementation of all these will result in the department meeting its objectives. The ANC supports this Budget Vote. Thank you. [Applause.]