1. PRESENTATION TO THE SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISES DEPARTMENT OF COMMUNICATIONS /2011 ANNUAL REPORT October 2011
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2. DoC LEADERSHIP TEAM Rosey Sekese Director-General Gift Buthelezi
DDG: ICT International Affairs & Trade
Sam Vilakazi
ADDG: Finance & ICT Enterprise Development
Norman Munzhelele
ADDG: ICT Policy Development
Themba Phiri
ADDG: Presidential National Commission
Harold Wesso
DDG: e-Skills Institute
Linden Petzer
CD: Radio & Satellite Communication
Farhad Osman
CD: Strategic Planning & Monitoring
Pearl Seopela
CD: Communications
Kedibone Sekwele
CD: HRM
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3. FOCUS OF PRESENTATION
As requested, the presentation seeks to address the following questions raised by the Select Committee on Labour and Public Enterprises:
What were key aspects of the DOC’s strategic/business plan for 2010/11, and in particular what were its key targets?
 How has the DOC performed in terms of the plan and in particular the key targets? Where you did not achieve these targets, why was this the case?
(the above will be addressed through the presentation of a spreadsheet )
 How was the budget allocated for the 2010/11 financial year used?
 What are key aspects of the strategic plan for this financial year and the mid- term? (Flagship Programmes)
 What are some of the key challenges facing the DOC and how are these being addressed?
 Apart from exercising effective oversight, how can the Select Committee be of assistance to the DOC?
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4. CONTEXT
Governance structures were not fully functional to enable decision-making on key projects
Prolonged procurement approval procedures impacting on project implementation
Cancellation of existing tendering processes led to non-spending
Delays in transfers to the entities due to DTT standards (R180m for STBs and R199m for Sentech Digitization) and a 2010 saving of R150m for Telkom
R117 m due to the termination of 112 Emergency Call Centre. Non-functional internal structures to facilitate approval of projects
Displacement of staff from branches thereby resulting in low staff morale and performance. 4
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5. SUMMARY OF KEY ACHIEVEMENTS
A spreadsheet has been prepared highlighting the following information against each of the 2010/11 targets:
Achievements
Status (achieved, partially achieved, not achieved)
Reasons for variance where applicable
Current status where applicable
The above information covers the following 6 Programmes within the DoC:
Programme 1: Governance & Administration
Programme 2: ICT International Affairs & Trade
Programme 3: ICT Policy Development
Programme 4: ICT Enterprise Development
Programme 5: ICT Infrastructure Development
Programme 6: Presidential National Commission on ISAD 5
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6. Budget vs Actual Performance for the 2010/11 Financial Year6
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7. STATEMENT OF FINANCIAL PERFORMANCE
2010/11
2009/10
REVENUE
R’000
Annual appropriation
Departmental revenue
Direct Exchequer receipts
TOTAL REVENUE
Current expenditure
Compensation of employees
Goods and Services – operational exp.
Interest and rent on land
316 30
Financial transactions in assets & liabilities
708 82
Total current expenditure 7
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8. STATEMENT OF FINANCIAL PERFORMANCE
2010/11
2009/10
R’000
Transfers and subsidies *
Expenditure for capital assets
Tangible capital assets
2 301
6 369
Software & other intangible assets 98
3 822
Total expenditure for capital assets
2 399
10 191
TOTAL EXPENDITURE 8
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9. STATEMENT OF FINANCIAL PERFORMANCE
2010/11
2009/10
R’000
Voted funds surrendered
Departmental revenue
Direct Exchequer receipts
Transferred to National Treasury 9
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10. APPROPRIATION STATEMENT Expendi-ture as % of final appro-priation
2010/11
2009/10
Programme
Final Appro-priation
Actual Expen-diture
Variance
Expendi-ture as % of final appro-priation
1. Administration
5 321
96.7%
2. ICT International Affairs and Trade
44 618
35 223
9 395
78.9%
49 274
44 600
3. ICT Policy Development
89 712
20 518
81.4%
93 025
70 112
4. CT Enterprise Development
67.0%
5. ICT Infrastructure Development
44 842
24.9%
90 244
74 787
6. PNC
34 070
27 480
6 590
80.7%
31 317
25 578
TOTAL
66.7% 10
A global leader in the development and use of Information and Communication Technologies for socio-economic development

11. APPROPRIATION STATEMENT
2010/11
Programme
Final Appropriation
Actual Expenditure
Variance
1. Administration
5 321
2. ICT International Affairs and Trade
44 618
35 223
9 395
3. ICT Policy Development
89 712
20 518
4. CT Enterprise Development
5. ICT Infrastructure Development
44 842
6. PNC
34 070
27 480
6 590
TOTAL 11

12. SUMMARY OF ECONOMIC CLASSIFICATION
2010/11
2009/10
Economic Classifi-cation
Final Appropria-tion
Actual Expen-diture
Variance
Variance as
% against final allocation
Final Appro-priation
Actual Expenditure
Current payments
64.1%
Transfers and subsidies
67.5%
Payments for capital assets
4 119
2 399
1 720
58.2%
12 691
10 192
TOTAL
66.7% 12
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13. DETAILS OF TRANSFER PAYMENTS Adjusted Appropriation Act R’000
Actual Transfer
R’000
Variance
USAASA
66 704 -
USAF
38 613
ICASA
NEMISA
32 602
SAPO Subsidy
Sentech – Digitisation
71 000
SABC: Public Broadcaster
SABC: Channel Africa
38 896 13
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14. DETAILS OF TRANSFER PAYMENTS Adjusted Appropriation Act
Actual Transfer
Variance
SABC: Programme Production
15 000
SABC: Community Radio Stations
6 850
Telkom SA Ltd -
.za Domain Name Authority
1 500
Sector Education and Training Authority: ISETT-SETA
125
NEPAD
3 500 14
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15. KEY ASPECTS OF THE STRATEGIC PLAN FOR THIS FINANCIAL YEAR15
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16. FLAGSHIP PROGRAMMES (1)
DOC
FLAGSHIP PROGRAMMES (1)
The following have been identified as Flagship Programmes:
Digital Terrestrial Television (DTT) – Seeks to migrate South Africa from an analogue to a digital broadcasting platform through the preferred DVB-T2 standard.
Job Creation - to establish an ICT Industry Wide Working Group on job creation whose purpose will be to facilitate the identification of priority areas for job creation.
ICT Rural Development- ICT Rural Development Strategy will be implemented through various key projects as ICTs is seen as an effective enabler to rural development.
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17. FLAGSHIP PROGRAMMES (2)
DOC
FLAGSHIP PROGRAMMES (2)
4. Broadband - to improve broadband penetration through the implementation of an integrated Broadband Plan that will facilitate capital investment, innovation and rural access. Plans for connecting schools, health and government centres will not only improve service delivery, but also improve the uptake and usage of broadband by government and individuals.
Postbank - Post Bank Bill was signed into an Act late last year. Work will begin to fast-track the roll-out of the Post Bank centres or outlets throughout the country.
E-Skills - through the e-Skills Institute, massify the e-skilling of our nation for a rightful place in the Information Society and Knowledge-based Economy, ensuring (i) that citizens improve their quality of life through the use of ICTs, and (ii) that employment ready students are “delivered”.
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18. FLAGSHIP PROGRAMMES: DIGITAL TERRESTRIAL TELEVISION (DTT) (1)
Benefits:
Efficient use of the frequency spectrum – scarce public resource
More channels therefore more diverse content to the public
Better picture & sound quality
Potential for special interactive services (sub-titling, e-government delivery)
Approved DTT roll-out plan in place focusing on the following key areas:
Digitial Migration policy amendments have been gazetted for public comment.
The PMO structure has already been approved and recruitment is underway
The Joint Spectrum Advisory Group (JSAG) has been established.
Engagements with ICASA regarding community TV is ongoing
The network coverage needed for the launch is 70% and Sentech committed that by April 2012 it will reach the 74% network coverage.
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19. FLAGSHIP PROGRAMMES: DIGITAL TERRESTRIAL TELEVISION (DTT) (2)
Approved DTT roll-out plan in place focusing on the following key areas:
The SABC has developed Channel line-ups (including health and educations channels) and the business plans setting out three funding scenarios were submitted to DoC for MTEF Opex for funding. Full revised DTT business plan incorporating new channel line-ups is close to completion.
Digital Migration Public Awareness and social marketing strategy has been developed for implementation.
The Scheme for Ownership Support (SOS) has been developed for Cabinet approval
Subsidy management will be done through USAASA who have already developed the means test and the qualifying criteria. As part of the management of the subsidy, engagements have started with retailers and the South African Post Office.
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20. FLAGSHIP PROGRAMMES: DIGITAL TERRESTRIAL TELEVISION (DTT) (3)
Approved DTT roll-out plan in place focusing on the following key areas:
The Set Top Box (STB) Manufacturing Strategy has been developed for Cabinet approval.
The final STB Standard is projected to be ready by the end of November in consultation with SABS
DoC has developed the Request for Proposals (RFPs) for the appointment of Manufactures for the subsidised STBs. The RFP for the subsidised STBs requires that the standard be finalised by SABS as well as the SOS and STB manufacturing strategy.
The Department is on track to meet the December 2013 SADC deadline
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21. Job Creation FLAGSHIP PROGRAMMES: JOB CREATION (1)
The DoC has identified the following critical programmes which could facilitate the creation of jobs over the medium to long term period:
Programme
Project
Implementer
ICT Infrastructure
DTT
Sentech, SABC
Broadband
Sentech, Infraco
Manufacturing
Set Top Boxes
tbc
Creative Industries
Digitisation/NDR/ Military veterans
SABC, NEMISA
Content hubs for radio/TV
SABC, ICASA
Animation Programme
NEMISA
Capacity Building
E-Cadres
E-Skills Institute
SMME development
Incubation hubs
ICT Enterprise Branch
ICT Centres/e-Cafes/ LAN Houses
SAPO Infrastructure
Postbank roll-out
SAPO
BPOs
Call centre agents
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22. Job Creation FLAGSHIP PROGRAMMES: JOB CREATION (2)
Institutional Mechanisms
The Department has established several important platforms in which the issue of Job creation was discussed, amongst others, the ISAD Multi- stakeholder Forum, the Top 30 ICT Companies as well as the ICT Industry Forum.
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23. ICT RURAL DEVELOPMENT (1)
FLAGSHIP PROGRAMMES:
ICT RURAL DEVELOPMENT (1)
In “taking technology to the people”, the Department is in the process of finalising the ICT Rural Development Strategy as ICTs is seen as an effective enabler to rural development.
160 rural wards are targeted within the MTSF of which 2 (Muyexe and Msinga) are progressing well with regards to DoC led ICT interventions.
Department of Rural Development and Land Reform (DRDLR) have identified 36 additional rural areas in need of urgent ICT interventions where DoC & DRDLR will partner to roll-out out relevant ICT interventions.
The 36 additional rural areas cut across all 9 Provinces.
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24. ICT RURAL DEVELOPMENT (2)
FLAGSHIP PROGRAMMES:
ICT RURAL DEVELOPMENT (2)
Project plans for each Province have been drafted and will roll-out effective from 01 November 2011.
There is a need to have extensive consultative process with relevant stakeholders within Provinces and Municipalities.
The following ICT services are envisaged to be needed by the prioritised areas:
Connecting schools and health and government facilities
Rolling-out Low Power transmitters for TV and radio coverage
Digital Hubs and Telecentres
Post Offices
Skill capacity
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25. FLAGSHIP PROGRAMMES: BROADBAND (1)
100% Broadband access by 2020
Data Analysis & Broadband Mapping
Obtain a clear picture of what currently exists through infrastructure broadband mapping exercise per Province and District.
Develop existing coverage maps in terms of fixed-line and wireless penetration, and to identify the gaps in terms of coverage per Province.
Determine the fibre required to cover identified gaps per Province, per district and per Municipality.
Expand on fixed and wireless infrastructure through relevant operators/service providers
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26. FLAGSHIP PROGRAMMES: BROADBAND (2)
Progress
National Broadband Policy approved
Commenced with the Kwazulu-Natal Province as a pilot, and have started implementing phase 1 with cooperation from Sentech and Infraco. Mapping exercise is already complete.
The DoC has also established the Broadband Inter-Governmental Committee to align the Provincial and Municipal initiatives. BBICC is operational and Provinces have already commenced to identify the PoPs for Phase 1.
Collaborative efforts underway between the DoC and ICASA to finalise the Local Loop Unbundling framework and spectrum licensing for Broadband
Commenced with an e-connectivity initiative to connect schools and clinics. To date, the first 1650 schools have already been identified to be connected with broadband, and a total of 1154 adjacent health centres will also be connected.
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27. FLAGSHIP PROGRAMMES: POSTBANK (1)
Aim: to provide a wider range of affordable, relevant and accessible financial services for the unbanked
Postbank Act was promulgated in December 2010, the President has since signed the notice for commencement on 22 July 2011.
DoC finalizing the development of Lending, Borrowing and Investment policies of the Postbank as required by section 26(2) of the Act. Policies will be tabled in Parliament before the end of the financial year.
Call for nominations for suitable people to serve in the Board of the Postbank has been issued on the 2nd October 2011.
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28. FLAGSHIP PROGRAMMES: POSTBANK (2)
The Post Office Board had completed the determination of the structure of the Company and the conditions of service, remuneration and service benefits of the personnel of the Company.
Project Oversight Committee to be chaired by the Minister has been established.
The Postbank is on track to launch its application for a banking licence.
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29. FLAGSHIP PROGRAMMES: E-SKILLS (1)
The e-Skills Institute (e-SI) serves as a national catalyst to deliver e-skills for the Information Society and Knowledge-based Economy
Within a developmental context it will play a leading advocacy role in orchestrating the various existing and new initiatives around e-skills across business, government, education, civil society including labour and global development partners with specific focus on:
ICT Industry,
Creative Industry;
Enabling innovation that responds to the developmental needs of the country through the establishment of provincial application factories;
Working collaboratively to leverage existing capacity and resources;
Ensuring that the e-skills qualifications needed in the 21st century are designed in such a way that they make students employable;
Customize qualifications so that they are relevant to employment.
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30. FLAGSHIP PROGRAMMES: E-SKILLS (2)
The e-SI works through its multi-stakeholder collaborative network architecture to fast-track e-skilling South Africans for equitable prosperity and global competitiveness.
eSI Partners: UNDP, UNCTAD, UNESCO, Tech de Monterrey, RIM, Department of Higher Education, Telkom, SALGA, University of Pretoria, Walter Sisulu University, Vaal University of Technology, Durban University of Technology and the University of the Western Cape are but a few to mention.
Given the very serious mismatch between our current training and education offerings and the market demand, the e-SI is gearing itself to impact aggressively against the national strategic priorities of the country.
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31. FLAGSHIP PROGRAMMES: E-SKILLS (3)
The e-Skills Institute is in the process of establishing provincial e-Skills Knowledge Production and Coordination hubs across the country to:
Facilitate coordination options for training and education;
Coordinate and deliver relevant research & evaluation;
Coordinate better alignment of multi-stakeholder e-skills projects to the MTSF in provinces;
Assist in amplifying the impact and sustainability of relevant private sector, donor country, government and civil society including Labour, NGO’s etc) based activities; and
Act as knowledge hubs to inform other government programmes and stakeholder groups.
The Department is in the process of incubating the e-SI for a period of two years with the intent of it becoming a fully-fledged institution in 2013.
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32. CHALLENGES HINDERING PROGRESS AND CORRECTIVE MEASURES
Prolonged internal approvals due to lack of fully functional Governance Structures in the first two months of the reporting period
Over ambitious planning conducted on the assumption of vacancies being filled
Delays due to prolonged engagement with external stakeholders on certain projects
CORRECTIVE MEASURES
Various Governance Structures have been approved, established and are fully functional which has substantially improved the turn-around times for decision-making and approvals.
The Department has established a Quarterly Organisational Performance Assessment Board that met on 15 July which focused on the interrogation of organisational performance and implementing immediate actions to address targets that are either delayed or where there is no progress.
Process of filling vacancies has commenced
PNC is undergoing a repositioning exercise - Information Society and Development Branch
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33. HOW CAN THE SELECT COMMITTEE BE OF ASSISTANCE TO THE DOC?
Oversight function
Awareness raising with regards to ICT issues within the various constituencies
Communicating with the Department the ICT related challenges or needs of the various constituencies
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34. THANK YOU
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