1. 2008/9 ICASA Annual Report Presentation to Portfolio Committee on Communications 2008/9 ICASA Annual Report Presentation to Portfolio Committee on Communications 03 November 2009 Paris Mashile - Chairperson Karabo Motlana - CEO

2. Outline of Presentation Vision Mission Strategic objectives Regulatory Divisions  Licensing & Compliance  Markets & Competition  Engineering & Technology  Consumer Affairs  Legal & CCC Stakeholder Management International Participation ICASA & Its People Financial Reports  Annual Financial Statements  Administered Revenue Fund

3. VISION To be a credible regulator in the transformation of South Africa into an information and knowledge-based society.

4. MISSION To create a competitive environment for delivering a wide range of high quality communication services at affordable prices to contribute to the overall economic growth and social development of the country

5. 5 Strategic Objectives  Increase the availability and quality of electronic communication services to domestic and business users  Encourage and maintain pro-competitive market through effective competition and transparent regulation  Develop regulatory policies that promote competition, innovation and investment in services and facilities providing widespread access to ICTs

6. Strategic Objectives (cont.)  Maximize the net economic and social worth of the sector, including its strategic use as a catalyst for economic, social and technological development in other areas of the economy  Broaden economic participation in the sector by SMMEs  Encourage and support the successful introduction of new technologies and services

8. Licensing Completed license conversion process as required by EC Act and issued over 600 class and individual licences. Issued two trial licences for Digital Migration. Registered 46 courier companies. Aligned SAPO licence with Postal Services Act (as amended), the ECA and the ICASA Act (as amended).

9. Licensing Regulations Published draft Licence Fees regulations & conducted public hearings. Published Licensing Process and Procedures regulations. Published Licence Exempt regulations.

10. Compliance Compiled 55 reports on broadcasting licencee’s compliance with the ECA and licence terms and conditions. Conducted 45 monitoring visits to assist licencees in complying with licence terms and conditions. Received 76 broadcasting complaints:  44 resolved by the department;  5 referred Complaints & Compliance Committee (CCC);  36 referred to industry led bodies i.e. Advertising Standards Authority of South Africa (ASA) and Broadcasting Complaints Commission of South Africa (BCCSA).

11. Compliance (cont.) Conducted 46 monitoring visits to reserved postal outlets. Verified reports submitted by SAPO on delivery points & infrastructure roll-out targets. Received 60 complaints:  34 referred to SAPO for resolution;  22 resolved by the department;  2 referred to CCC;  2 were still under investigation.

12. Markets & Competition Published Carrier pre-Select draft regulations. Published Must Carry regulations. Published Universal Access regulations. Published Party Election Broadcasts & Political Advertisements regulations. Published Advertising, Infomercials & Sponsorship draft regulations. Published Code of Conduct for Broadcasters draft regulations. Published the Digital Terrestrial Television draft regulations. Published Commissioning of Independently Produced South African Programming discussion document. Published Sports Broadcasting Rights discussion document.

13. Markets & Competition (cont.) Processed 36 interconnection agreements. Analysed and approved Telkom’s 2008/9 tariff review. Analysed and approved SAPO’s 2008/9 tariff review. Analysed and processed 57 ad-hoc tariff applications. Processed 315 numbering applications.

14. Engineering & Technology Commissioned a study to develop new Radio Spectrum Licence fees framework. Published draft Radio Frequency Plan regulations. Published Radio Frequency Identification systems regulations. Published conditions of exemption of certain radio frequencies from licensing. Published draft Terrestrial Broadcasting Frequency Plan. Published Findings Documents for High Demand Frequency Bands.

15. Engineering & Technology (cont.) Confiscated 471 units of equipment due to non-compliance. Closed down illegal broadcasters & confiscated their equipment. Issued warning and closed down unlicensed operators. Returned 223 units of confiscated equipments to owners who complied. Sealed 1 234 radios due to non-payment. Actioned 2 015 licensee files received from Finance Department. Issued 6089 frequency spectrum licences. Issued 1826 type approval licences. Conducted 649 maritime restricted radio telephone examinations. Conducted 77 high site inspections. Identified 275 interference cases and cleared 267.

16. Consumer Affairs CRFs established in KwaZulu-Natal, Limpopo and Mpumalanga. Monitored compliance with consumer protection regulations in Gauteng and North West. Printed publications on :  Complaints handling processes  Type approval pamphlets  112 Emergency Services  Consumer Rights Day Conducted research on the impact of the Authority’s Public Education and Awareness programmes. Conducted research on consumer experiences on Mobile Number Portability.

17. Consumer Affairs (cont.) Conducted feasibility study on the establishment of the call centre. Co-ordinated four mandatory Consumer Advisory Panel meetings. Conducted 433 public education and awareness outreach programmes in all provinces. Reached out to consumers through 124 radio interviews. Conducted Consumer Rights road shows in all provinces. Resolved 64% of 2 155 consumer complaints received.

18. Consumer Affairs (cont.) Partnered with other stakeholders and provided information at the following campaigns:  World Telecommunications Day;  Youth Day;  World Post Day;  International Day of People with Disabilities.

19. Legal & CCC ICASA operates in a highly litigious environment as its decisions are frequently taken on review by aggrieved applicants. Complaints & Compliance Committee adjudicated 9 licensees charged with non-compliance of their licence conditions. Litigation cases:  Regulatory – 15  Non-regulatory – 1  Labour matters - 2

20. Stakeholder Relations Internal stakeholders  Launched and published a daily electronic newsflash – iNews.  Published quarterly edition of internal newsletter.  Arranged staff meeting at Head and Regional Offices.  Hosted internal functions & events e.g. Wellness Day, Family Day. Sports Day and Staff end of the year function.

21. Stakeholder Relations (cont.) External stakeholders  Issued Media Releases and arranged interviews about regulatory activities.  Placed Media Notices in leading national daily newspapers.  Published media Releases, government gazettes and other regulatory information on the website.  Coordinated production and tabling of Annual Report.  Participated in exhibitions and road-shows to raise awareness about Authority’s mandate.  Facilitated responses to enquiries.  Arranged Stakeholder Meeting to brief licensees and operators about regulatory activities.  Commissioned production of corporate video outlining Authority’s mandate and deliverables.

22. Stakeholder Relations (cont.) International Participation - Coordinated the Authority’s international participation in relation to:  Attendance of and submissions made to Universal Postal Union, International Telecommunications Union, CRASA, SAPRA, SADC Ministers Roundtable on ICTs.  Developed calendar of meeting and events.  Arranged bilateral interaction with regulators from Brazil, Tanzania and Malawi.  Subscribed to international regulatory organisations/associations.

23. ICASA & Its People Out of 59 vacancies, 58 vacancies were filled. 536 participants attended a range of training courses. R2,7m spent on training which represents 3% of the total salary budget. Conducted a job competence profiling and skills audit. Introduced integrated performance management.

24. Demographics Year to date permanent employee demographic profile as at 31 March 2009: Mar-08Mar-09% Variance Population GroupTotal % in each group Total % in each group African23870%24172%2% Asian175%175%0% Coloured237%237%0% White6118%5416%-2%

25. Demographics (cont.) Race, Gender & Rank Comparative Analysis: Headcount Stats Population Group Total Female Total Male Grand Total AfricanAsianColouredWhite FMFMFMFM Council26 22810 Executive Management26 1 12810 Senior Management47 21 151015 Managers1121 1 2 4112839 Total Management1940031308205474 General Staff99834107121531125136261 Total Staff118123413815 39145190335 Percentages35%37%1%4%2%4% 12%43%57%100%

26. Finance & Risk Auditor General attention drawn to the following: 1.Fruitless and wasteful expenditure = R39 570 due to penalties incurred. 2.Irregular expenditure = R387 081 due to non compliance with supply chain management processes. 3.ICASA did not submit monthly management accounts to DOC. 4.ICASA did not prepare and sign performance contract with CEO. 5.ICASA did not pay suppliers within 30 days. 6.Qualified opinion : Accounts receivable relating spectrum debtors of R41 797 045. 7.Council PMS outstanding

27. Finance & Risk (cont.) Corrective Action: internal controls An internal audit function has been set-up to co-ordinate operational and financial units Corrective Action: CEO Contract A performance contract has been signed by the CEO outlining quarterly appraisal Corrective Action: Risk Management A risk strategy has been developed Corrective Action: reports to Doc ICASA has been submitting monthly performance reports to DOC Corrective Action: Council PMS Commenced discussions 2007 and Draft PMS submitted to DOC in October 2009. Corrective Action: Debtors Spectrum Implement the billing system for spectrum

28. Statement of Financial Performance: MAIN ACCOUNT Note 31 March 2009 R 31 March 2008 R REVENUE Total grants appropriated2240 494 749212 842 671 Other income312 893 0809 115 188 253 387 829221 957 859 EXPENDITURE(254 987 752)(224 507 781) Administrative expenses4(37 208 010)(29 505 951) Staff costs5(133 316 499)(117 655 847) Audit fees6(2 374 049)(1 002 327) Other operating expenses7(70 649 040)(65 268 901) Depreciation11(10 342 566)(9 970 364) Amortisation23(1 097 588)(1 104 391) DEFICIT FROM OPERATIONS(1 599 923)(2 549 922) Finance income97 260 9407 587 667 Finance costs8(81 204)(170 491) Total finance Income 7 179 7367 417 176 SURPLUS FOR THE YEAR5 579 8134 867 254

29. Note 31 March 2009 R 31 March 2008 R ASSETS Non-current assets76 442 62270 261 738 Property, plant and equipment1173 668 52767 333 193 Intangible assets232 774 0952 928 545 Current assets71 586 95477 042 866 Trade and other receivables121 789 8131 626 694 Prepayments and advances138 083 2289 844 335 Cash and cash equivalents1461 713 91365 571 837 TOTAL ASSETS148 029 576147 304 604 LIABILITIES Current liabilities36 284 42741 798 613 Trade and other payables15 17 645 53521 688 263 Current portion of lease accruals166 369 9887 950 439 Current portion of deferred grants1712 095 22711 569 871 Current portion of finance lease obligations: on22173 677590 040 Non-current liabilities81 383 06380 723 718 Non-current portion of deferred income grants1781 360 41075 108 515 Non-current portion of lease accruals16 22 6535 387 957 Non-current portion of finance lease obligations: (S 22 -227 246 TOTAL LIABILITIES117 667 490122 522 331 FUNDS ACCUMULATED RESERVES30 362 08624 782 273 Start-up fund33 731 342 Accumulated deficit(3 369 256)(8 949 069) TOTAL FUNDS AND LIABILITIES148 029 576147 304 604 Statement of Financial Position: MAIN ACCOUNT

30. Statement of Financial Performance: NATIONAL REVENUE FUND Note31 March 200931 March 2008 RR REVENUE32 267 355 3732 092 784 211 OTHER INCOME312 586 36420 472 803 2 279 941 7372 113 257 014 EXPENDITURE(2 298 517 064)(2 133 717 677) Impairment of accounts receivable2(11 006 201)(21 917 715) Commission(193 647)(193 172) Bank charges(23 456)(13 360) Transfers to DoC(2 287 293 760)(2 111 593 430) (DEFICIT)/SURPLUS FROM OPERATIONS(18 575 327) (20 460 663) NET FINANCE INCOME18 575 32720 460 663 Unearned income16 833 84910 468 041 Finance income1113 599 27819 036 413 Finance costs10(11 857 800)(9 043 791) NET (DEFICIT)/SURPLUS FOR THE YEAR--

31. Statement of Financial Position: NATIONAL REVENUE FUND Note31 March 200931 March 2008 RR ASSETS Current Assets682 314 400690 648 714 Trade and other receivables5665 495 892 629 367 337 Cash and cash equivalents616 818 508 61 281 377 Total Assets682 314 400690 648 714 LIABILITIES Current liabilities682 314 400690 648 714 NRF Payables7110 056 457121 749 475 NRF Provision8572 257 943568 899 239 TOTAL FUNDS AND LIABILITIES682 314 400690 648 714

32. Thank you Dankie Re a leboha Re a leboga Siyabonga Inkomu Ro livhuwa Enkosi