Department of Communications

Annual Report Presentation

Ms. Lyndall Shope-Mafole

Director – General

29 October 2004

Outline1. Introduction 2. The Director-General’s Overview3. The Minister’s Overview4. The Presidential National Commission5. Programme Performance

Multimedia Business UnitPostal ServicesTelecommunications Business UnitThe Postal RegulatorSupport Services

5. PFMA Compliance6. Financial Information7. Implications of the MTBPS

Introduction • Introduction of team DoCHistorical • Covers financial period 1 April 03 – 31 March 04• Former DG Ngcaba served 10 months of previous

financial year• DDG Ntombela- Nzimande served the remaining

two months and better part of this year• Minister re-elected in May 2004• New Portfolio Committee of CommunicationsPresentation • To follow format of annual report• Portfolio Organizations left out as they will be

presenting separately

MandateOld

To develop,formulate and implement policies for the Telecommunications, Postal and Broadcasting Services sectors

NewTo create a favorable

information and communication technology(ICT) environment that ensures that South Africa has the capacity to advance its socio-economic development goals, to support the renewal of Africa and to create a better world

VisionOld

Improve the lives of the ordinary South Africans whilst contributing to economy growth. Make South Africa a knowledge based society and help create an information economy.

New

To be a global leader in harnessing information and communications technologies for socio-economic development.

MissionOld

To enable ordinary people to have access to traditional media and the convenience of information technology.

NewTo enhance the well being of

peoples of South Africa, the African Continent and the world through the creation of a sustainable and an enabling information communications technology environment. We shall through leveraging our world class knowledge, skills and experience deliver on our social contracts to the people in a professional manner reflective of our national value system informed by Batho Pele ethos

2. DIRECTOR GENERAL’S OVERVIEW

DG’s overviewInformation and Communication Technologies must:• Lead the way forward and create the paths along which we will push

back the frontiers of poverty• Create a better life not only for the disadvantaged communities in our

country but for the whole of Africa• Enable us to reach our developmental goals and objectives as well as

enhancing our participation in global information societyICTs in the Education system:

• Will have meaningful educational impact in schools through out South Africa through empowerment, skills and development

• Many young people will grow up having been exposed to basic desktop PC systems and the internet

• Develops a coterie of young people who will grow up using the technology, understanding it and making careers within the industry

DG’s overview(Cont’)Convergence Bill

• Will integrate Information Technology and Broadcasting

• Facilitate knowledge transfer and allow people to have access to IT and Broadcasting facilities

• Enhance people’s potential to improve economically

• BEE Charter

• Developed for the sector

• Allows meaningful entry of the previously disadvantaged into our sector

Restructuring

• Align our business with the vision of Batho- Pele

• Prepare ourselves for the great task of giving our people access to the benefits of ICT

3. MINISTER’S OVERVIEW

Minister’s OverviewWorld Summit on the Information Society• A plan of action to harness the development potential of ICT• To promote the use of information and knowledge for the achievement of

internationally agreed upon development goals• To provide both choice and affordability of services through the managed

liberalization of all sectors in which we have influence• Provide effective universal access both for people at grassroots level as well

as for the most sophisticated segments of our society

Progress made by Department:• Worked closely with the PNC on ISAD in promoting corporation,

coordination, and joint action by all spheres of Government• The Convergence Bill which was submitted for comments in December• The Digital Migration Strategy, aimed at encouraging broadcasters and

independent producers to convert their production and their archived material to digital formats

Minister’s overview(cont’)• Content and Language Development Strategy aimed at encouraging

development and growth across entire audio-visual content field,including full recognition and operational status for all South African languages

• Supported the NEPAD e-Africa Commission and its programmes• Progress has been made with regards to the Eastern African Sub-Marine

Cable System and corresponding infrastructure affecting land-locked countries

• The Department has been active in fostering Public Private Partnerships, a contractual arrangement in which a suitable private party undertakes a specific departmental project , assumes the associated risk in return for a fee related to agreed performance criteria

• Registering the SABC as a public company and corporatization of Channel Africa

• Initiative to popularize South Africa’s indigenous languages on the Internet.

Minister’s overview(cont’)• Plan to corporatise and reposition Post Bank as the bank of choice for

South Africans who have no access to financial services• Provision of postal addresses and postal retail network extending into

historically disadvantaged communities• The installation of 200 Pits is proceeding well• Greater focus on the Nodal points and the Multi-Purpose Community

Centres• Progress has been made in the Frequency Spectrum Management,

Virtual Reality modeling and Information Security Programming• Progress has been made with the Edunet, in alliance with the Department

of Education• The imminent completion and implementation of the National Public

Emergency Call Centre, the establishment of the .za Domain Name Authority, the creation of both a Cryptography and Critical Databases Registry, the establishment of an Accreditation Authority and the foundation of the Cyber Inspectorate to help combat crime.

4. THE PRESIDENTIAL NATIONAL COMMISSION

(PNC)

PNCChairperson’s Overview• Engagement in a number of activities both nationally and

internationally • Aimed at linking efforts at Provincial level with National

progress• ICT climate will be enhanced by the e-strategy and the

Convergence policy that is being developed by the DoC• Established a National Youth Forum in information Society

and Development• Enable our youth to play a pivotal role in building an

inclusive information society

PNCActivities in the past year• Workshops in the three priority areas identified by the

PIAC,(Education, Health and SMMEs) together with the two added by the PNC(Content and e-government)

• Provincial consultative Forum in all provinces except Gauteng

• Commissioning of Research studies in the area of SMMEs, e-Literacy and open source Software

• Coordination of the World Summit on information Society(WSIS)

4. Programme Performance

Multimedia Business UnitKey policy Strategy Progress

SABC Restructuring

•To restructure and corporatise SABC as a public company so as to improve issues of corporate governance, transparency and accountability•To transform the SABC from being a broadcaster providing a true Public Broadcasting Service

•In line with the Broadcasting Act of 1999, SABC was corporatised as a public company on 1st October 2003•The Board of the SABC is currently finalizing the structure of the SABC in accordance with the stipulations of the Broadcasting Act 1999,as amended

Multimedia Business UnitKey policy Strategy

Progress

SABC Restructuring

•To ensure that the SABC delivers a broadcasting service to all South Africans, regardless of location and in the language of their choice.

•Policies governing operations of the SABC which include issues relating to promotion of South African content programming coverage in the official languages in particular marginalised African indigenous languages and procedures intended to ensure access to broadcasting services by persons with disabilities, were finalised and submitted to ICASA in accordance with the provisions of the law

Multimedia Business UnitKey policy Strategy Progress

Regional Language Television service

•To create a policy framework for the equal convergence of all currently marginalised South African official languages and the coverage of regional issues.•The law mandates the SABC to apply for a license to operate regional language television services in the Republic.

•The SABC submitted its application to ICASA on the 8th of December 2003 for a license to launch a Regional Language Television Services

•The SABC proposed the establishment of two Regional Language Television Services, one regional service to focus on the Northern part of the country and the other on the South

Multimedia Business UnitKey policy Strategy Progress

Regional Language Television service

•The Regional Language Television Service must contain programmes that focuses only in the following official languages: IsiZulu, SiSwati, IsiNdebele, IsiXhosa, SeSetho, SeTswana, Sepedi, Tshivhenda,Xitsonga and Afrikaans

•Government is currently working on a funding model for these regional TV services•The rolling out phase of the Regional Television Services is expected to be implemented in the next 2005/06 financial year.

Multimedia Business UnitKey Policy Strategy Progress

Channel Africa To restructure and corporatise Channel Africa into a subsidy of the SABC Ltd.

•Cabinet approved the corporatisation of Channel Africa as a subsidy of SABC Ltd•There are ongoing discussions between the Departments of communications, Foreign Affairs and the Presidency on the issue of a broader mandate for the restructured Channel Africa.

Multimedia Business UnitInfrastructure Roll out• To date the Department has equipped thirty-seven four year licensed

community radio stations and six non-broadcasting institutions for training purposes

• The Department purchased equipment earmarked for allocation to seven stations in Gauteng and Western Cape. The community radio stations selected are the following:

Kathorus FMVoice of TembisaRadio MamelodiTop StereoWell FMValley FM andRadio West Coast

Multimedia Business UnitSignal Distribution Upgrades• Fourteen community radio stations are distributing

through the SENTECH platform.• SENTECH has reduced tariffs for community radio

stations while the coverage of these stations has increased dramatically

• Seven installations were completed in KZN and five of the projects are distributing their signals through SENTECH.

Multimedia Business UnitSatellite Communication Network• Construction of a Satellite Communication Network• Hosted a workshop with community Radio Stations

and sector organizations to send a message of an enormous need for this infrastructure

• First phase roll out process of the Satellite Communications Network to take place in the 2004/05 financial year

Postal ServicesKey Policy Strategy Progress

Public Internet Terminals

•To create a communications infrastructure through which all people will have access to information form Government, Business and Communities•To empower citizens to communicate via email or the Internet and to access additional services such as photocopying, fax machines and scanners

•700 PITs have been rolled out in Post Offices and Multi Purpose Community Centres,which includes nodal points through out the country•A billing system to be introduced selectively and will not apply to the Government sites and e-mails

Postal ServicesKey Policy Strategy Progress

Citizen’s Post Office

•To provide public access to digital communications infrastructure, content and service to all citizens, at the same time ensuring that SAPO is well-positioned to capture a share of the growing e-commerce market.

•To date 14 CPO’s are operating in various parts of the country and ten more will be rolled-out during the next financial year.

Postal ServicesMulti-Purpose Community Centres(MPCCs)• The roll out of the ICT infrastructure to the MPCCs is ongoing• The communications centres have been integrated into the

broader MPCC initiativesGeographic Information System(GIS)• A GIS postal database to integrate data• To assist in identifying postal infrastructure,its deficits and

imbalancesNational Address System• A framework for a National Address system has been developed• The Village of Garasai in the North-West Province was used as a

pilot project and the entire community received street addresses• Another project on street delivery is taking place in the rural area

of Eastern Cape

Postal ServicesInternational ActivitiesPan African Postal Union• South Africa handed over Chairmanship to Kenya• Assisted in modernizing and upgrading the Postal Services,

including both financial services and regulatory frameworkUniversal Postal Union• South Africa accepted nomination for the Vice-Chair of

Committee 7 of the 23rd UPU held in Bucharest, Romania• Participated in the Executive Marketing Conference for UPU

held in DurbanCelebration of World Post Day• Celebrated on 9 October 2003

Telecommunications PolicyKey Policy Strategy

Progress

Second National Operator (SNO)

To liberalize the telecommunications industry

The Second National Operator has been announced. 25% holding in the SNO not finalised.

Telecommunications Policy

Key Policy Strategy Progress

Under Serviced Area Licenses (USALs)

To provide telecommunications services to the Under Serviced Area licenses

ICASA has approved four USALs, three are still outstanding and an invitation will be extended to apply for twenty more

112 Emergency Call Centre

To establish an Emergency Communications Infrastructure that will be accessible from anywhere in South Africa.

An operating call centre already established

Telecommunications PolicyKey Policy Strategy

Progress

African Advanced Institute for ICT

To establish an Institute that focuses on the study, research and development of ICTs in the form of technologies that benefits all citizens.

A Project Office was established at the CSIR in terms of the Cabinet approval on 31 March 2004.The establishment process is underway and on target.

.za Domain Name Authority

To establish a fully functional authority for the .za name authority

The authority has been established.

Postal RegulatorMonitoring and Enforcement unit• Independent monitor to monitor the adherence to delivery standards• Roll out audit to be undertaken in due course for the postal services

and street delivery addresses• Six Postal inspectors were appointed• Information brochure on customer protection is in circulationRegulation Unit• New Postal Services Regulations will be gazetted as soon as approval

by the Minister has been obtained.Pricing and Tariffs Regulation Unit• Separated from the Pricing and Tariffs unit• To align it with Government objectives to ensure the effective regulation

of administered prices

Support Services:Shareholder Management

• Facilitated the appointment of Directors of SOE Boards in such a way that these Boards are fully representative of the geographic and population diversity of South Africa

• Developed Shareholder Compacts to ensure that SOEs deliver on Government policy targets

• Analyze the financial performance of public entities

Other Support Services• The DoC is currently developing a space weather research facility at

the OTB site near Bredasdorp in the Western Cape• The knowledge management unit was instrumental in the development

of mobile access to the District information Management System web-based-applications through the General Packet Radio Services

• The Department recruited twenty seven interns, 17 of whom were women

• Media and Communications co-ordinated the following eventsWorld telecommunications dayWorld Post DayAfrican ICT Achievers Awards

• The Telecommunications Amendment Act,2004 was drafted by the legal unit and passed by Parliament

Other Support ServicesInternational Relations section’s main focus areas were:

• Influencing the global arena by voicing the inspirations of many developing countries, especially African nations

• Implementing the New Partnership for Africa’s Development projects (e-schools and infrastructure development)

• Reforming the institution of Global Governance of the United Nations and contributing to the strengthening of the African union

• Contributing to Global efforts to Bridge the Digital Divide

• Building bilateral and multilateral Relations and sharing experiences with other countries

• Promoting peace and stability , good political governance and post conflict reconstruction with a view of using ICTs as a reconstruction tool

Other support services• The Chief Audit Executive was appointed at a meting in Kenya

to chair the newly formed African Telecommunications Networks Fraud Association(ATNFA)

• A new Audit Committee was appointed in terms of the PFMA to serve for a period of three years

• The Annual Financial Statements were submitted on time and in the format prescribed by National Treasury

• The Annual Report was submitted on time to Parliament• The Office of the Auditor General issued an unqualified audit

opinion

5. PFMA COMPLIANCE

PFMA Compliance• Sec 27 –National Annual Budgets

The annual budget of the Department of Communications is in accordance with the format prescribed by National Treasury

• Sec 30- National Adjustment BudgetsThe Department’s adjustment budget complies with the requirements of sec 30

• Sec 38- General Responsibilities of Accounting OfficerThe Accounting officer does ensure that the Department has and maintains an effective, efficient and transparent system of internal control, financial and risk management.

PFMA Compliance• Sec 39- Accounting Officer’s responsibility to

budgetary controlsThe Accounting officer adheres to budgetary controls highlighted in section 39

• Sec 40- Accounting Officer’s reporting responsibilitiesTimeous submission of :

Annual Financial StatementsAnnual ReportMonthly Expenditure ReportsQuarterly Reports

PFMA compliance• Sec 43- Virement between main division within the vote

Virements remain within the eight percent of the amount appropriated under that main division as stipulated in the Act

• Sec 44- Assigning powers and duties by the accounting officerThe Accounting officer delegated duties in writing to:

Programme ManagersResponsibility ManagersChief Financial OfficerTender CommitteeProcurement

• Chapter 7- Executive AuthoritiesThe Executive authority of the Department does adhere to Chapter 7 of the PFMA.

6. FINANCIAL INFORMATION

EXPENDITURE REPORT Programme Adjusted

Appropriation 2003/04

Revised Estimate 2003/04

Actual Expenditure 2003/04

Administration 88 607 86 107 80 470

Telecommunications policy

146 796 158 318 125 534

Postal Services 1 090 186 1 080 841 322 372

Multi-Media Services policy

312 948 313 737 305 829

Auxiliary and Associated Services

6 682 6 217 3 134

TOTAL 1 645 219 1 645 219 837 338

PER ECONOMIC CLASSIFICATION

Economic Classification

Adjusted Appropriation 2003/04

Revised Estimate 2003/04

Actual Expenditure 2003/04

Current Payments 225 550 229 556 182 186

Transfers and Subsidies

1 403 564 1 399 264 639 490

Payment for Capital Assets

16 105 16 399 15 663

TOTAL 1 645 219 1 645 219 837 338

Details of Transfer PaymentsBeneficiary Adjusted

appropriation 2003/2004

Actual Expenditure 2003/2004

USA 14 211 14 211

USF 24 745 24 745

Advanced Institute for ICT 11 000 8 262

South African Post Office:Subsidy

1 050 000 300 000

Details of Transfer PaymentsBeneficiary Adjusted

appropriation 2003/2004

Actual Expenditure 2003/2004

SABC:Public Broadcaster 84 717 84 717

SABC: Channel Africa 26 288 26 288

Community Radio Stations 9 000 1 964

Programme Production 30 100 25 800

NEMISA 15 153 15 153

ICASA 138 350 138 350

RECONCILIATION:BUDGET VS SPENDING

Amount Explanation

Actual Expenditure 837 338 Actual expenditure for the 2003/04

financial year

Funds not spent

750 000

Not transferred to SAPO pending the restructuring and corporitisation of the Postbank and the signing of the Memorandum of understanding between the Minister of Finance and the Minister of Communications. This amount was requested as a roll-over.

Rolled-over 8 329 Amounts already committed but not spent. Requested to be rolled over

Surrendered to NRF 49 552

Amount surrendered to the NRF excluding the amounts requested to be rolled-over

BUDGET 1 645 219 Amount appropriated to the DoC

Implications of the MTBPS• An increase in the Transfer Payment to ICASA for its VAT

liability. An amount of R 45 341 million was allocated to fund the liability

• An amount of R 1 047 million was allocated for the establishment of the Deputy Minister’s Office

THANK YOU