DoC LEADERSHIP TEAM

PRESENTATION TO THE SELECT COMMITTEE ON

LABOUR AND PUBLIC ENTERPRISES

DEPARTMENT OF COMMUNICATIONS

2010/2011 ANNUAL REPORT

19 October 2011

A global leader in the development and use of Information and Communication Technologies for socio-economic development


DoC LEADERSHIP TEAMDoC LEADERSHIP TEAM

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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


FOCUS OF PRESENTATIONFOCUS OF PRESENTATION

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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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• 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.

CONTEXTCONTEXT


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• 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

SUMMARY OF KEY ACHIEVEMENTSSUMMARY OF KEY ACHIEVEMENTS


Budget vs Actual Performance

for the 2010/11 Financial Year

A global leader in the development and use of Information and Communication Technologies for socio-economic development6

2010/11 2009/10

REVENUE R’000 R’000

Annual appropriation 2 138 001 2 470 494

Departmental revenue 1 528 347 1 344 790

Direct Exchequer receipts 366 509 4 481 173

TOTAL REVENUE 4 032 857 8 296 457

Current expenditure

Compensation of employees 145 083 128 250

Goods and Services – operational exp. 175 648 303 747

Interest and rent on land 316 30

Financial transactions in assets & liabilities 708 82

Total current expenditure 321 755 432 109


STATEMENT OF FINANCIAL PERFORMANCE


2010/11 2009/10

R’000 R’000

Transfers and subsidies * 1 102 323 1 859 612

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 1 426 477 2 301 912




2010/11 2009/10

R’000 R’000

Voted funds surrendered

711 524 168 582

Departmental revenue 1 528 347 1 344 790

Direct Exchequer receipts

366 509 4 481 173

Transferred to National Treasury

2 606 380 5 994 545




2010/11 2009/10

Programme

Final Appro-priation

Actual Expen-diture Variance

Expendi-ture as % of final appro-

priation


Actual Expen-diture

1. Administration 150 935 145 614 5 321 96.7% 164 786 163 200

2. ICT International Affairs and Trade 44 618 35 223 9 395 78.9% 49 274 44 600

3. ICT Policy Development 110 230 89 712 20 518 81.4% 93 025 70 112

4. CT Enterprise Development 1 617 992 1 083 606 534 386 67.0% 2 041 848 1 923 635

5. ICT Infrastructure Development 180 156 44 842 135 314 24.9% 90 244 74 787

6. PNC 34 070 27 480 6 590 80.7% 31 317 25 578

TOTALTOTAL 2 138 0012 138 001 1 426 4771 426 477 711 524711 524 66.7%66.7% 2 470 4942 470 494 2 301 9122 301 912


APPROPRIATION STATEMENTAPPROPRIATION STATEMENT

APPROPRIATION STATEMENT

2010/11

ProgrammeFinal

AppropriationActual

Expenditure Variance

1. Administration 150 935 145 614 5 321

2. ICT International Affairs and Trade

44 618 35 223 9 395

3. ICT Policy Development

110 230 89 712 20 518

4. CT Enterprise Development

1 617 992 1 083 606 534 386

5. ICT Infrastructure Development

180 156 44 842 135 314

6. PNC 34 070 27 480 6 590

TOTAL 2 138 001 1 426 477 711 524

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APPROPRIATION STATEMENTAPPROPRIATION STATEMENT

2010/11 2009/10

Economic Classifi-cation

Final Appropria-

tion

Actual Expen-diture

Variance

Variance as

% against final

allocation


Actual Expenditure

Current payments

501 658 321 755 179 903 64.1% 459 191 432 108

Transfers and subsidies 1 632 224 1 102 323 529 901 67.5%

1 998 612 1 859 612

Payments for capital assets 4 119 2 399 1 720 58.2%

12 691 10 192

TOTALTOTAL 2 130 0012 130 001 1 426 4771 426 477 711 524711 524 66.7%66.7% 2 470 4942 470 494 2 301 9122 301 912


SUMMARY OF ECONOMIC CLASSIFICATION

SUMMARY OF ECONOMIC CLASSIFICATION

Adjusted Appropriation Act

R’000

Actual Transfer

R’000

Variance

USAASA 66 704 66 704 -

USAF 218 613 38 613 180 000

ICASA 290 923 290 923 -

NEMISA 32 602 32 602 -

SAPO Subsidy 306 077 306 077 -

Sentech – Digitisation 270 900 71 000 199 900

SABC: Public Broadcaster 230 014 230 014 -

SABC: Channel Africa 38 896 38 896 -


DETAILS OF TRANSFER PAYMENTSDETAILS OF TRANSFER PAYMENTS

Adjusted Appropriation

Act

R’000

Actual Transfer

R’000

Variance

SABC: Programme Production 15 000 15 000

SABC: Community Radio Stations 6 850 6 850

Telkom SA Ltd 150 000 - 150 000

.za Domain Name Authority 1 500 1 500

Sector Education and Training Authority: ISETT-SETA

125 125

NEPAD 3 500 3 500


DETAILS OF TRANSFER PAYMENTSDETAILS OF TRANSFER PAYMENTS

KEY ASPECTS OF

THE STRATEGIC PLAN

FOR THIS FINANCIAL YEAR


The following have been identified as Flagship Programmes: 1. Digital Terrestrial Television (DTT) – Seeks to migrate South Africa

from an analogue to a digital broadcasting platform through the preferred DVB-T2 standard.

2. 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.

3. 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.


DOC FLAGSHIP PROGRAMMES (1)


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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.

5. 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.

6. 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”.




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.

18A global leader in the development and use of Information and Communication Technologies for socio-economic development

FLAGSHIP PROGRAMMES: DIGITAL TERRESTRIAL TELEVISION (DTT) (1)



• 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.





• 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




Job Creation The DoC has identified the following critical programmes which could

facilitate the creation of jobs over the medium to long term period:


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FLAGSHIP PROGRAMMES: JOB CREATION (1)


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

ICT Enterprise Branch

SAPO Infrastructure Postbank roll-out SAPO

BPOs Call centre agents tbc

Job Creation


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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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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.


FLAGSHIP PROGRAMMES: ICT RURAL DEVELOPMENT (1)


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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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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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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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FLAGSHIP PROGRAMMES:POSTBANK (1)

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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FLAGSHIP PROGRAMMES: POSTBANK (2)

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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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.


FLAGSHIP PROGRAMMES: E-SKILLS (1)


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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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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.




CHALLENGES HINDERING PROGRESS AND CORRECTIVE MEASURES

CHALLENGES HINDERING PROGRESS AND CORRECTIVE MEASURES

CHALLENGES:Prolonged internal approvals due to lack of fully functional Governance Structures in the first two months of the reporting periodOver ambitious planning conducted on the assumption of vacancies being filledDelays due to prolonged engagement with external stakeholders on certain projects

CORRECTIVE MEASURESVarious 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 commencedPNC is undergoing a repositioning exercise - Information Society and Development Branch


HOW CAN THE SELECT COMMITTEE BE OF ASSISTANCE TO THE

DOC?

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



THANK YOU

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Documents

DoC LEADERSHIP TEAM