Speech 2016/17 Budget Vote: Minister of Telecommunications Siyabonga Cwele


It is an honour to present Budget Vote 32 on Telecommunications and Postal Services worth R2.4 billion for policy debate and approval by Parliament. This year calls upon our nation to celebrate historic events which have contributed to the democracy we enjoy today. A 100 years ago, the University of Fort Hare was established and has been instrumental in educating many of our leaders who fought for our liberation.

We celebrate 60 years since the heroic women’s march to the Union Buildings in protest against the unjust pass laws. We commemorate and salute the bravery of the young people who on 16 June 40 years ago, rose against a repressive apartheid education system.

All of these anniversaries are a testimony to a consistent and selfless struggle by the African National Congress, working with all people to liberate us from colonial apartheid oppression and lead us to a united, non-racial, non-sexist, democratic and prosperous nation. As we move towards local government elections, even the most critical opponents agree that in the past five years the ANC government has delivered massively on basic services such as water, housing, electricity, roads, telephony, health and education for all.

We will continue to work hard because we care about people like you.

Working together, we have acquired experience and commit to work harder to improve local service delivery and strengthen the fight against crime and corruption. The future of local government is in your hands. We invite you to join us on the journey to a prosperous nation. ‘Sishoda Ngawe’. We call upon all our compatriots to go their municipal offices to register their addresses to enable them to vote for their councillors on August 3, 2016.

Malunga ahloniphekileyo

Our economy is facing difficulties due to the slow global economic growth. Our government is responding by an enhanced implementation of the Nine Point Plan to grow the economy as announced by His Excellency President Zuma. Investing in modern Information and Communication Technologies (ICTs) is one of the crosscutting measures to ignite growth, create jobs and cushion the poor. The access to fast, reliable and affordable internet is a critical enabler of socio-economic development. It remains the most powerful equalising tool available to humankind within and between nations.

House chairperson,

South Africa is making strides in the rollout of broadband as a result of government and private sector investments. In 2015 our telecommunications operators invested R23.5 billion and were planning to increase it to R26 billion this year.
We are making progress towards our 2019 mobile broadband target of connecting 80% of the population. The mobile broadband 4G/ LTE coverage now stands between 35 and 53%.

Manene namanenekazi siyaqhuba.

The Universal Service and Access Agency contributed in the upgrade of all base stations at Mutale municipality in Vhembe District and Chief Albert Luthuli Municipality at Gert Sibande District in order to improve Internet connectivity in these municipalities. In addition, USAASA connected three special schools for students with disabilities namely Phumlani in Albert Luthuli, Fhulufholo in Mutale and Tsolo in Eastern Cape. This year USAASA will focus on upgrading base stations in Mhlontlo and King Sabata Dalindyebo Municipalities in the OR Tambo District.

State owned companies are the largest investors in the fixed line broadband coverage with Telkom having more than 147 000 km of fibre. In September 2015 Telkom announced their plans to connect 500 000 homes to fibre by December 2016, growing to one million homes by 2018.

Broadband Infraco (BBI), despite its funding challenges spent R203 million to add 1000 km of fibre to its network and established 24 Points of Presence (POP). This year BBI will invest R75 million in infrastructure including for additional 17 POPs.

In 2015 SENTECH spent over R150 million towards infrastructure upgrades related to service diversification in a bid to increase coverage of vernacular language services for both the public and community broadcasters. This year SENTECH will spend over R500 million to sustain its current services, and expand its services and coverage.

Fellow South Africans,

Phase 1 of government broadband roll out in 8 districts is almost ready for implementation after long planning, consultations and agreeing on coordinating structures with the 8 municipalities and relevant provinces. In this financial year, R316 million has been allocated to connect 2700 government facilities to scalable broadband infrastructure. The department is working with SITA to finalise the process of appointing the service provider in line with the Public Finance Management Act.

We have also finalised the planning and costing for phase 2 to the rest of municipalities. Unfortunately there is no allocation in the budget because of the economic downturn. We are looking at alternative funding options including from our private sector and development finance institutions.

Malunga ahloniphekileyo,

The July 2015 Cabinet Lekgotla received an inspiring report on the municipal free Wi-Fi program which was lead on the main by Tshwane Metro with over 715 funded operational sites followed by Ekurhuleni, City of Johannesburg and Cape Town. Cabinet directed our department to expedite this programme. We set aside R40 million to assist those metro municipalities that would demonstrate capacity and plans to spend before the end of March 2016.

I am pleased to report that Nelson Mandela Bay has completed all 17 sites to provide free connectivity to the people of Zwide, Kwanobuhle, Korsten, KwaMagxaki, Motherwell and KwaZakhele.

Tshwane also completed connecting 61 sites for the benefit of people of Mabopane, Saulsville and Winterveld.

Ekurhuleni has completed their 43 sites in Alberton, Benoni, Daveton, Springs, Katlehong, Voslorus, Thembisa, Tsakane and Nigel.

Cape Town is on track to complete its 28 sites in Athlone, Goodwood, Khayelitsha, Gugulethu, Harare and Crossroad.

Johannesburg is working hard to complete 47 sites in Alexandra, Diepsloot, Tsepisong, Ivory Park, Doornkop, Orlando East, Dlamini, Lawley and Protea East.

After initial delays Mangaung will also complete connecting 35 sites in Bloemfontein, Thaba Nchu and Bosthabelo.

Dr KK Kaunda District Municipality has been the star performer outside metros and has through its own resources, rolled out free Wi-Fi across all its local municipalities. Let us welcome Cllr Pinky Moloi joining us today all the way from the Dr KK District.

What is most encouraging is that most people use free Wi-Fi for educational content, job opportunities, small business development and marketing. Free Wi-Fi is daily bridging the digital divide. We encourage all our municipalities to set aside funds for this empowering programme for affordable internet for all. We have learnt from the best practices and stand ready to assist municipalities with sustainable Wi-Fi programmes.

Let us welcome in the gallery Martin Nyokolodi who is a social entrepreneur who runs an internet radio station over free Wi-Fi targeting the youth in Soshanguve and the Tshwane City centre. He did so despite the lack of funds which took him out of his studies at Tshwane University of Technology.

House Chairperson,

On 30th October 2015 we launched our National Cyber-Security Hub to assist business, NGO’s and citizens to protect themselves from attacks while using Internet by issuing alerts, general awareness and resolution of reported incidents. By the end April 2016 the Hub received more than ten thousand incidents of which 75% were classified as low risk and only 10% as high risk. The frequently asked questions on the website relate to banking phishing scams, cybercrime fraud, verification of hoax messages, property scams, identity theft, cyber bullying and other intrusions and denial of availability.

The development of the Hub has followed a phased approach. It was launched with a set of basic systems and tools for reciving and analysing cyber-security incidents. The website is currently being upgraded to interactive functionality that will be available at the end of June 2016.

This upgrade will be immediately followed by a further phase of development which will include social media platforms for reporting incidents. All of these developments form part of the roadmap to full international certification of the Hub, which is envisaged to be completed by next year.

Fellow South Africans

The South African Post Office (SAPO) remains a strategic entity for extending government, e-commerce and financial services to South Africans far and wide through its approximately two and a half thousand (2 448) outlets.

Last August, we appointed a new board to guide the operations and bring stability to SAPO. We have also begun the process of cleaning up and strengthening its management.

In January this year, we appointed Mr. Mark Barnes as the CEO who brought a breath of fresh air to SAPO. Plans are well under way to finalise the appointment of a CFO and other senior officials to drive the growth and stability of the company.

SAPO is correcting the maladministration of the past ten years by implementing the recommendations of the Special Investigating Unit (SIU) and the Public Protector, alongside its home grown Strategic Turnaround Plan.

SAPO’s financial stability continues to be our top priority. This year, SAPO received a R650 million capital injection. This may look like a drop in an ocean as the company urgently requires about R3.7 billion to stabilise it operations and start implementing revenue generating initiatives. Our department will continue to offer the necessary support that will enable SAPO to raise additional funding from the markets. I am confident that the CEO will soon finalise a domestic syndicated loan facility towards the required funding.

Despite current challenges, SAPO managed to assign over 261 000 addresses to households in the rural and informal settlements.

Honourable House Chair,

The ANC government remains committed to ensuring the Postbank becomes a developmental bank that will provide simple, easy-to-understand financial products and services for the unbanked and underserviced. Last year alone, the Postbank opened over 219 000 new savings accounts for the unbanked.

In February 2016, SAPO complied with all the section 12 requirements for a permission to establish a full banking company. We are awaiting the response from the South African Reserve bank which will lead to compliance with section 13 requirements for establishing of the bank such as;
• The appointment of the Postbank Board,
• The incorporation of the Postbank Company, and
• The registration of the Bank Controlling Company.

House Chairperson,

Last year we committed to table a new Integrated ICT White Paper before the end of March 2016. The policy is in its final stages of consultation and approval as we plan to finalise it in the next few months. This policy is informed by the developments, innovation and convergence of technologies in the ICT sector. It is our tool to implement what is envisaged by our National Development Plan. It is based on the equality provisions of our Constitution and introduces a range of interventions to ensure everyone in South Africa, irrespective where they live or their socio-economic status can access the benefits of participating in the digital society.

The new policy proposes radical supply side interventions to accelerate inclusive growth of the industry. It will redu barriers to entry by moving away from monopolistic infrastructure based competition, to open access broadband networks. A new spectrum policy will support open access networks as it aims to open the use of high demand broadband spectrum for use by all licensees while adequately compensating those who invest in infrastructure.

The ultimate target is to benefit the consumer by increasing consumer choice, reduce costs, increase innovation, and encourage all consumers to fully experience the Internet.

The White Paper proposes a rapid deployment policy that will provide a simplified, streamlined and nationally coordinated framework to accelerate the deployment of electronic communications networks. This will drastically reduce the costs to operators and ultimately the consumers.

Distinguished Guests,

Last year, we participated in the World Radio Congress (WRC-15) where South Africa led negotiations on critical agenda items such spectrum for mobile broadband (IMT), the protection of spectrum for Digital Terrestrial Television, unmanned aircraft, and Global Flight Tracking. We are proud to announce that we obtained an additional 487 MHz of spectrum for mobile broadband which will assist us to expedite the deployment of these services, especially to the rural areas. This year we will prioritise the finalization of the our National Radio Frequency Band Plan as required by our legislation.

We led discussions at the World Summit on Information Society (WSIS) UN High Level Meeting, on behalf of G77 and China, to advanced equitable safe use, governance and availability of internet to all global citizens.

As a member of the African Union Bureau for Ministers responsible for ICTs we will continue to explore options for the affordable digitisation of Africa.

Tomorrow, Deputy President Ramaphosa will lead us to WEF Africa in Kigali to position Africa for the 4th Industrial Revolution, which is driven by the Internet of Things.

I was also elected into the UN Broadband Commission, where we together with other global influential ICT leaders are advancing ICT programmes, specifically broadband strategies for sustainable development. There are 3.2 billion global citizens who are connected to the internet. Our mission is ensuring universal access to the internet, by connecting the next 4 billion.

We will also work with our BRICS partners in increasing skills, innovation and collaboration among our companies. This year we will train 40 students and experts in ICT skills in China as part of this collaboration.

Later this year, South Africa will participate at the Universal Postal Union Congress, where we have been given a responsibility to chair the Future Strategy programme for the growth of the postal sector.

Honourable Members,

I have made progress in resolving the leadership challenges in the Department which impacted negatively on the timely delivery of the Department’s outcomes. To this end, I established a fact finding inquiry by the Public Service Commission (PSC) to investigate an alleged paralysis after I met with all branches in the Department.

The PSC has produced a report and made recommendations of which we are implementing. I am confident that the implementation of these measures has begun to foster an increased focus on the performance of the Department towards delivering on its mandate.

I am closely monitoring the various SIU reports on our entities and the Department which have been released and those which are expected to be released during the course of the year.

Fellow South Africans,

The long walk to the vision of a connected South Africa as envisaged in the National Development Plan has begun. It may be long and difficult as we connect the remotest areas of our country but we know that walking and working together united in our efforts to bring about an inclusive society we will succeed.

I would like to extend a note of gratitude to the Department, the Deputy Minister, Parliament and all stakeholders in the ICT sector for your support.

I am confident that the house will endorse this Budget Vote for the Department of Telecommunications and Postal Services.

I thank you.


Please enter your comment!
Please enter your name here