Rubben Mohlaloga September 2016 Annual Report 2015/16 Rubben Mohlaloga September 2016

ICASA TEAM Rubben Mohlaloga: Acting Chairperson Pakamile Pongwana: CEO Tebogo Matabane: CFO Willington Ngwepe: COO Portia Mngomezulu: CSE

PRESENTATION OUTLINE PART 1: A Brief Overview of the PRESENTATION OUTLINE PART 1: A Brief Overview of the Strategic Plan 2015/16 PART 2: Annual Report on 2015/16FY PART 3: Future Outlook - 2016/17FY

PART 1 A Brief Overview of the Strategic Plan 2015/16

ICASA is guided by: The Constitutional & Legislative Mandates (Sustained Agenda) Government Policy Mandates (Change Agenda) Vision - An Inclusive Digital Society Mission -To ensure that all South Africans have access to a wide range of high-quality communication services at affordable prices Organizational Values - Innovation, collaboration, accountability, results-driven, stakeholder-centric Leadership Brand

The following issues were topical in the performance The following issues were topical in the performance environment during the financial year: To regulate or not to regulate. That is the question! Over-The-Top Services A number of countries have migrated to DTT For some SADC Countries including SA the migration process is ongoing Movement of DTT to satellite – point of discussion at ITU 2023. ICASA will partake in the debate Cost of migration and use of audiences minimisation Digital Terrestrial Television Cost of data Layers of data including cost Device issues Net neutrality Software How do we make sure society uses INTERNET appropriately INTERNET Challenges to SAPO Courier environment Postal Services Affordable broadband facilitation Look at data pricing, peering facilities Spectrum availability Broadband

We started the year with the following performance environment situation:

Other issues in the performance environment Market Consolidation issues Need to accelerate digital migration (ITU switching off of analogue broadcasting signal) Review of ICT sector policy Net neutrality Technological evolution International Agenda (WRC-15 on matters relating to spectrum allocation)

Governance structure was as follows: Complaints and Compliance Committee Audit & Risk Committee ICASA Council 3 Councilors Remuneration Committee Fully functional governance structure Full Independence Each Committee has a full complement of members

Areas of Focus (Pre-Determined Objectives) were as follows: 5-Year 3-Year SOOG 1: Promote Effective Competition Strategic Objective 1.1: Facilitate an effectively competitive ICT sector SOOG 2: Promote Digital Agenda Strategic Objective 2.1: Create an environment conducive to universal broadband provision and digital broadcasting services Strategic Objective 2.2: Support innovation for the future use of digital technologies SOOG 3: Improve Stakeholder and Consumer Experience Strategic Objective 3.1: Facilitate an efficient operational environment to reduce regulatory burden Strategic Objective 3.2: Facilitate social cohesion and nation building Strategic Objectives 3.3: Protect consumers from harmful practices

There were 103 annual output targets for the 2015/16FY Programme Planned Output Targets Policy Research & Analysis 13 Regions 9 Licensing 14 Compliance and Consumer Affairs 15 Engineering & Technology 12 Finance 6 Corporate Affairs 8 Internal Audit Legal, Risk & CCC Human Resources TOTAL 103

Budget for the year was as follows: PROGRAMME R thousand '000 BUDGET 2015/2016 1. Administration 226 303 2. Licensing 28 452 3. Policy Research and Analysis 23 405 4. Engineering & Technology 36 185 5. Regions 63 183 6. Compliance Consumer Affairs 14 724 Total 392 262

PART 2 Annual Report on 2015/16FY Highlights

Draft amended ICT Codes Key Policy Developments and Changes in the 2015/16FY Performance Environment POPI Act No.4 of 2013 Draft amended ICT Codes FPB Online Regulation Policy SABC Bill

Governance performance by meeting attendance Complaints & Compliance Committee (39 hearings and deliberations) Audit & Risk Committee (5 meetings) ICASA Council 38 Meetings Information and Technology Review Committee (2 meetings) Remuneration Committee (2 meetings) Executive Committee (34 meetings)

Performance on Output Targets

Key Regulatory Highlights Published ITA for spectrum capacity in multiplex 3 for subscription TV Completed licensing process for Free to Air TV Published ITA for commercial sound broadcasting service for Northern Cape Approved Licensing Framework for IMT Spectrum licensing LICENSING HIGHLIGHTS Published report on the State of the ICT Sector (market assessment report) Recommendations to Minister of Telecommunications and Postal Services on review of SAPO exclusivity period Published revised Regulations on equitable treatment of political parties by broadcasters during municipal elections Published revised Local Content Regulations for television sound broadcast services RESEARCH HIGHLIGHTS Published draft Regulations on usage of E-band & V-band spectrum bands Published draft Discussion Document on Dynamic and Opportunistic Spectrum Management (incl. TV whitespaces spectrum) Report on contributions to and outcome of WRC-15 agenda items adopted by Council SPECTRUM MANAGEMENT HIGHLIGHTS

Key Regulatory Highlights Resolved 91% of consumer complaints (target was 75% resolution) Published draft amended Regulations for Consumer Advisory Panel A fully functional ICASA Office for Mpumalanga Province Compliance inspection conducted for over 240 licensee retail outlets to assess compliance with consumer protection regulations Executed 100% of NATJoints assignments Resolved 100% of reported cases of harmful interference (including cross border interference cases) Gazetted tariffs for reserved postal services Report on quality of experience by end-users/ consumers (relating to broadcasting and postal services) approved by Council Annual compliance reports approved by Council in respect of 60 ECS /ECNS licensees; postal service licensee (i.e. SAPO) and 64 broadcasting service licensees CONSUMER PROTECTION HIGHLIGHTS

Regulatory Services to Industry

Regulatory Approvals and Authorisations Type of service Annual target Performance achieved Type approval 100% of Type Approval Applications processed within 15 working days A total of 2 573 Type Approval applications were processed in the 2015/16 financial year. 14.65% (376 applications) were processed within 15 working days. Numbering applications 100% of Numbering Applications processed within 20 working days A total of 340 Numbering applications were processed in the 2015/16 financial year. 98.23% (334 applications) were processed within 20 working days. Radiocommunications Spectrum applications 80% of radiocommunication new, transfer and renewal applications processed within 60 working days A total of 6680 radiocommunications spectrum applications were processed in the 2015/16 financial year. 99,45% (6643 applications) were processed within 60 working days. All amendments were completed within 60 working days.

Regulatory Approvals and Authorisations Type of service Annual target Performance achieved Transfer and Amendment of Individual Broadcasting, ECS and ECNS Licences 100% of service licensing amendment and transfer applications processed within 180 working days A total of 33 applications were processed in the 2015/16 financial year all of which were processed within 180 working days. Class Service licence registration, postal services certificates and authorisations 100% of service licensing applications processed within 30 working days A total of 281 applications were processed in the 2015/16 financial year. 81% (228 applications) were processed within 30 working days. Broadcasting spectrum applications 80% of broadcasting new, renewal and transfer spectrum applications processed within 60 working days. A total of 56 applications were processed in the 2015/16 financial year. 69,6% (39 applications) were processed within 60 working days.

Regulatory notifications Electronic communications retail tariffs Reviewed and analysed retail tariff notifications to assess the impact of wholesale voice CTRs and published 3 quarterly reports. - negligible decreases in published tariffs - promotions provide lower retail tariffs a lower effective retail rate noticed for consumers who use promotions

Complaints & Compliance Committee Performance by sector

Human resource priorities for the year are set as follows: Filling of critical and prioritized positions; Leadership Development Programme; Training, development and empowerment of employees; Performance Management; and Development of succession and retention strategies.

Human Resources Performance Employment Equity Human Resources Development Expenditure Staff Complement

% of total no. of staff leaving Human Resources Performance Employment Changes Reasons for Attrition Reason Number % of total no. of staff leaving Dismissal 1 0.28% Resignation 33 9% Retirement Total 35 10%

Linking Organisational Performance with Budget

Statement of Financial Position Rands 2015/2016 2014/2015 Assets Current Assets 1 467 764 143 1 329 836 029 Non Current Assets 120 917 867 109 334 783 Total Assets 1 588 682 010 1 439 170 812 Liabilities Current Liabilities 1 306 163 718 1 212 711 371 Non Current Liabilities - Total Liabilities Accumulated surplus 282 518 292 226 459 441 The Authority’s assets exceeded it liabilities by R 282 518 292, the request to retain the surplus was approved by National Treasury.

Statement of Financial Performance Rands 2015/2016 2014/2015 Revenue Revenue from non exchange transactions 418 830 737 384 389 152 Revenue from exchange transactions 22 068 699 16 650 249 Total revenue 440 899 436 401 039 401 Expenditure Employee-related costs 220 962 647 191 217 132 General expenses 164 019 935 161 664 215 Total expenditure 384 982 582 352 881 347 Surplus for the year 56 058 851 48 170 607

Irregular Expenditure Rands 2015/2016 2014/2015 Irregular expenditure 1 179 691 13 206 864 Irregular expenditure decrease by 91% in the current year. A total amount of R14 537 521 was condoned by Council during the current financial year. Fruitless and Wasteful Expenditure Rands 2015/2016 2014/2015 Fruitless and Wasteful expenditure 2 878 428 2 549 573 Fruitless and Wasteful expenditure increase by 13% in the current year.

IMPROVED ORGANISATIONAL PERFORMANCE Audit Report and Overall Performance ICASA achieved an unqualified audit for the 4th consecutive Financial Year UNQUALIFIED AUDIT Performance information was found to be reliable and useful Overall organisational performance improved from 29% in 2014/2015 to 76,7% in 2015/2016 IMPROVED ORGANISATIONAL PERFORMANCE

PART 3 Future Outlook 2016/17FY

The Year to be – 2016/17 Strategic Issues to tackle Real and perceived market concentration in the ICT sector (transparent affordable pricing) Release of more spectrum for telecom operators, radio and TV broadcasters 5G Forum INTERNET usage (4G & LTE) Broadband Delivery (Transparent affordable pricing) Postal sector adaptation to technological changes ICT Sector for promotion of economic growth and employment creation

THANK YOU