1st Annual DMMA Publisher Conference
Increasing ICT competitiveness and usage in
South Africa: the Challenge and
Opportunity
Loren Braithwaite-Kabosha SA Communications Forum
09 October 2013
Agenda
• Introduction of SACF
• Current Challenges
• Digital Media Opportunity
• Issues requiring urgent attention
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Background of SACF
- Members of SACF also include numerous small and medium enterprises in the ICT and broadcasting industries, including electronic manufacturers ( this is only a partial list for the sake of brevity)
- The SACF is an organisation which pools together high level technical skills and business expertise in the ICT sector.
- Among South African ICT industry associations, SACF is the association which includes members from across the entire spectrum of the industry, rather than specific silos.
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SACF Mission
To be the credible, nationally supported umbrella industry
platform:
• that serves, promotes and protects the interests of SACF members and other ICT associations,
• to enable the achievement of Vision 2020 and other initiatives,
• to create an innovative and globally competitive ICT industry,
• to accelerate national development,
• by proactively engaging the government and all other stakeholders.
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SACF Vision
Unleashing the power of the SA ICT industry to create the
most enabling ecosystem for a universally connected and
prosperous South Africa
SACF Strategic Objectives:• To become the unifying platform of the ICT sector• To be instrumental in developing the appropriate policy and
regulatory ecosystem• To provide thought leadership through research and development• To coordinate the development of ICT human capital• To promote ICT as a means for socio-economic development• To further transformation in the ICT sector
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Creating jobs is one of the most critical challenges facing South Africa today
Recommendation
This UN recommendation, specific to the Southern African region, suggests how to help reduce the sub-region’s alarming and dangerously provocative income inequalities: SACF recommends consideration of its adoption
Recommended Intervention Areas in Southern Africa• As part of development policies, public authorities must mobilise urban young
peoples’ potentials and energies with proper training in entrepreneur skills and information/ communication technologies, in order to enable them to set up and run their own businesses. Some urban authorities have tried to foster inclusive cities, but none have fully considered children and youth in their service provision and governance strategies. Cities should make more efforts to deliver broadband Internet to all urban neighbourhoods, rather than reinforcing existing inequalities in services delivery.
In this Information Century, is South Africa Competitive?
South Africa: Declining ICT Competitiveness:
Minister Carrim’s Priorities:
1. Set a firm foundation for a further reduction in the costs of communication. Carrim says the “digital revolution” is “changing very fabric of our society” but that it’s important the poor are not left behind.
2. See realistic progress in broadband becoming more extensive, affordable and speedier. "We intend to finalise the government's National Broadband Policy and Implementation Programme by end of November”, and says his department wants to have an “effective spectrum policy related to broadband” before March next year.
3. Reduce the digital divide between the haves and have-nots. "We are going to place much greater stress on delivering in rural and underserviced areas.The Internet presents a great opportunity for government to provide services to citizens,” Carrim says. “We must reduce, not increase, divides. We have made some progress, but not enough. We are lagging behind our peers.”
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Minister Carrim’s Priorities, cont.
4. Stabilise the department of communications; state-owned companies and public entities in the ICT sector and make them more effective.
5. Begin with the roll-out of digital migration before the end of this year.
5. “Locating ICT in the national development plan and broader policies of the majority party”;
6. Finalising government’s ICT policy review.
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Global Perspective 1: Fixed Broadband Price
• Most recent data for Q3 2012. Accessed 20th July 2013• Country selection based on availability of reliable information• All ADSL prices exclude modem and PSTN line – include ADSL capability rental
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Global Perspective 2: Mobile Broadband Price
• Most recent data for Q3 2012. Accessed 20th July 2013• Country selection based on availability of reliable information• All services based on 3G/HSPA, lowest published price selected
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Global Perspective 3: High usage Mobile data
• South African price based on 24 GB limit; Brazil on 10 GB; Russia on 30 GB• These high end user broadband services are critical for multimedia learning• Generally unaffordable for the majority of South Africans
Data for Q3-2012
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Global Perspective 4: Low usage Mobile data
• South African price based on 1 MB limit; Brazil & Russia 100 MB; China 120 MB• Target low end social media and email users: Affordable but of limited use• Too costly and capacity limited for learning and work-related usage
Data for Q3-2012
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Economic ImplicationsInternational Implications of high Communication Costs
•Global investment decisions target countries with lower communication costs;
•South Africa losing more than competitive advantage – also losing position as favoured investment destination and ICT gateway for the continent;
•Example: Numerous global ICT companies including IBM, Google and Intel companies locating their African headquarters in Kenya – higher ICT growth, Lower ICT prices
National Implications of high Communication Costs
•High costs restrict and limit significant engagement with the tools and resources available through the internet for a majority of South Africans. Even those who have limited access (Facebook and Twitter) do not become fully fledged Digital Citizens able to utilise the maximum benefits of ICT for human development
•South Africa is among the nations with the highest income inequality in the world. High costs means large percentage of population shut out of Knowledge Economy; stuck in quagmire of poverty; and utilise a larger percentage of income for communications costs of basic needs.
•Overall drag on economic growth as access and implementation of ICT is an enabler across all industries.
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The Opportunity:
Source: PWC, Informa Telecoms & Media
South Africa’s entertainment and media market is set to grow at a CAGR of 10.9% in the next five years.
Total South African entertainment and media market by segment, 2008-2017 (R million)
South Africa Historical data Forecast data CAGT %
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2013-19
Television 16 322 19 814 23 680 25 951 27 426 29 088 30 584 32 117 34 005 35 772
YOY growth (%) 21.4% 19.5% 9.6% 5.7% 6.1% 5.1% 5.0% 5.9% 5.2% 5.5%
Internet 8 617 10 064 11 809 15 722 20 952 27 697 36 176 45 801 55 779 63 239
YOY growth (%) 16.8% 17.3% 33.1% 33.3% 32.2% 30.6% 26.6% 21.8% 13.4% 24.7%
Radio 2 650 2 664 3 019 3 243 3 612 3 885 4 242 4 634 5 055 5 513
YOY growth (%) 0.5% 13.3% 7.4% 11.4% 7.6% 9.2% 9.2% 9.1% 9.1% 8.8%
Filmed entertainment
1 756 1 699 1 780 2 081 2 216 2 366 2 515 2 674 2 868 3 106
YOY growth (%) -3.3% 4.8% 16.9% 6.5% 6.8% 6.3% 6.3% 7.2% 8.3% 7.0%
Video games 1 497 1 601 1 737 1 937 2 155 2 357 2 541 2 773 3 028 3 316
YOY growth (%)
7.0% 8.5% 11.5% 11.3% 9.3% 7.8% 9.1% 9.2% 9.5% 9.0%
The Opportunity:
Source: PWC, Informa Telecoms & Media
South African entertainment and media consumer spend 2008-2017 (R millions)
South Africa Historical data Forecast data CAGT %
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2013-19
Television 10 040
11 905 13 556 15 017 16 055 17 091 17 867 18 700 19 715 20 695
YOY growth (%)
18.6% 13.9% 10.8% 6.9% 6.5% 4.5% 4.7% 5.4% 5.0% 5.2%
Internet access
8 110 9 515 11 197 14 857 19 769 26 147 34 150 43 232 52 647 59 570
YOY growth (%)
17.3% 17.7% 32.7% 33.1% 32.3% 30.6% 26.6% 21.8% 13.2% 24.7%
Filmed entertainment
1 389 1 397 1 425 1 570 1 664 1 772 1 876 1 990 2 136 2 325
YOY growth (%)
0.6% 2.0% 10.2% 6.0% 6.5% 5.9% 6.1% 7.3% 8.9% 6.9%
Music 2 557 2 360 2 314 2 212 2 154 2 146 2 147 2 160 2 181 2 200
YOY growth (%)
-7.7% -2.0% -4.4% -2.6% -0.4% 0.1% 0.6% 1.0% 0.9% 0.4%
A Complex compendium of issues
Attempting to solve one component in isolation will lead to failureAttempting to solve one component in isolation will lead to failure
Public sector
DisconnectDisconnect
Bottom line focus
Limited recognition
of value
Mass access not part of business
value proposition
National scale market
failure
Ad hoc or philanthropic
initiatives as CSR
Disruptive technologies suppressed
Weak ICT utilization
Capability gaps
Overly techno-
centric focus
Failure to recognise
mutual needs
Private sector
National/Corporate Interest Conflicts
Regulatory Deficiencies
Vertical “Silo” structures in conflict
with Convergence
Weak ICT policy design &
implementation
Differing expectations
Weak USO enforcement
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Constrained solutions
Low
Low
Hig
hH
igh
TR
US
TT
RU
ST
Where we are nowWhere we are nowBottom line
focus
Adversarial relationships
Compliance driven
Conflicting Interests
Fragmented InterventionsIncoherent
Policy Declining global competitiveness
Missed national growth targets
Illusive Knowledge Economy
Pervasive socioeconomic divides
Growing environmental threats
Where we want to beWhere we want to beICTs driving Nation towards a
Knowledge-based EconomyGrowth
Sustainability
security
Creative solutions
How we get thereHow we get thereDeep Consultation for National
Consensus & UnderstandingFocus on Core Values, Objectives,
Principles
Integrated Coordinated Action
Shared Values and Vision
Transformation Model
InstabilityInstabilityStagnationStagnation TIMETIME
Business as usualBusiness as usual
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The purpose of all Human Endeavour is to improve its life-circumstances:
• Health; Wealth; Security; Sustainability; Comfort; Happiness;
• All summarised as Human Wellbeing
The Principal Tool for doing this is Human Knowledge;
The Principal Tools for Managing, Distribution, and Sharing Knowledge are the ICTs;
The links between Each and All Global Challenges
Final thoughts: The Millennium Challenges
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ConclusionConcluding recommendations:
1. The high cost to communicate; infrastructure deficit in rural and underserviced areas; lack of capacity of important stakeholders in bridging the digital divide and other factors damages economic development generally and negatively influences inward investment decisions;
2. The PCC, Department of Communications, ICASA and the national ICT industry, including the DMMA, should collaborate to agree on the flaws in South Africa’s ICT ecosystem and solutions going forward
3. It is vital that every actual, perceived or nuanced impediment to reducing the national cost to communicate be analysed meticulously and integrated into corrective processes acceptable to, and implemented by all stakeholders, in a time-bound process;
4. These impediments examined must include policy, regulatory and industry-specific issues.
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Ke a leboga Dankie Ngiyathokoza
Ke a leboha Thank you
Siyabonga Ngiyabonga
Inkomu Ndo livhuwa Enkosi
Loren Braithwaite Kabosha
011 315 0590
083 267 2768
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