DoC Vision, Mission & Mandate

PRESENTATION TO THE SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISEonDEPARTMENT OF COMMUNICATIONS STRATEGIC PLAN (2013 – 2018)AND ANNUAL PERFORMANCE PLAN (2013/14) 24 April 2013 A global leader in the development and use of Information and Communication Technologies for socio-economic development

DoC Vision, Mission & Mandate South Africa as a global leader in the development and use of Information and Communication Technologies for socio-economic development Vision Building an inclusive information society through a sustainable world class information and communication technologies environment Mission To create a vibrant ICT Sector that ensures that all South Africans have access to affordable and accessible ICT services in order to advance socio-economic development goals, support the African Agenda and contribute to building a better world Mandate A global leader in the development and use of Information and Communication Technologies for socio-economic development

Brief Overview of 2012/13 Performance (1) A global leader in the development and use of Information and Communication Technologies for socio-economic development

Brief Overview of 2012/13 Performance (7) A much more detailed report in term of achievements and challenges as well as financial performance, will be presented to the Committee during the presentation of the 2012/13 Annual Report. A global leader in the development and use of Information and Communication Technologies for socio-economic development

BUDGET vs EXPENDITUREAS AT 31 MARCH 2013 A global leader in the development and use of Information and Communication Technologies for socio-economic development

BUDGET vsEXPENDITURE (1) A global leader in the development and use of Information and Communication Technologies for socio-economic development

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

2013-2018 Strategic Plan & 2013/14 Annual Performance Plan A global leader in the development and use of Information and Communication Technologies for socio-economic development

Planning Process (1) • Strategic Alignment: • Planning took into consideration, amongst others, the internal and external environment, ICT Sector analysis, Minister’s Performance Agreements & related Delivery Agreements, Government Outcomes as well as resource considerations and risk assessment. • Specific emphasis was given to priorities stemming from the National Development plans , and the SIP-15. • State Owned Companies (SOCs) were involved in the planning from the inception so as to ensure alignment and integration of priorities. A global leader in the development and use of Information and Communication Technologies for socio-economic development

Planning Process (2) • Plans aligned to the Framework for Strategic Plans and Annual Performance Plans developed by National Treasury as prescribed for Government Departments • Planning was facilitated by members of the Technical Assistance Unit of National Treasury so as to ensure technical correctness in terms of: • Measurability of targets (quantifiable where possible) • Performance indicators (aligned to objectives) • Time frames (2013/14 Targets unpacked into measurable quarterly targets) • 1st and 2nd drafts of the Strategic Plan and APP were submitted to National Treasury and DPME for consideration and feedback. • The draft Strategic Plan and APP was audited by the AG and feedback was discussed and affected where applicable. • DoC will submit quarterly performance reports against its APP to the Executive Authority, National Treasury and DPME • DoC would like to take this opportunity to acknowledge the contribution of the PCC, Minister and Deputy Minister in the development of the Plans. Their advice and strategic direction was very beneficial to the planning process. A global leader in the development and use of Information and Communication Technologies for socio-economic development

ICT Sector Analysis (1) • At the initial planning phase, the Department undertook an ICT Sector analysis • so as to inform the strategic plan. Such an analysis revealed amongst others the • following key ICT trends in SA: • Increasing ICT adoption by SMMEs, • Declining fixed-line subscriptions because of fixed to mobile substitution, particularly in the voice communications segment, • Increasing investment into virtualisation and cloud computing, • Growing market for business process outsourcing (BPO) services, • Increasing telecoms crossovers, notably m-commerce, • The broadband segment grew fastest in the four years to the end of 2011 and is set to continue in that trajectory over the next five years, albeit it at a lower rate of growth. A global leader in the development and use of Information and Communication Technologies for socio-economic development

ICT Sector Analysis (2) • Key ICT trends in SA continued: • The mobile segment will continue to grow over the next five years, despite a relatively high penetration rate which is estimated at 128,8%, • The fixed-line sector will continue to underperform because of a combination of underinvestment in fixed network infrastructure and increasing fixed to mobile substitution, • South African spending on IT services still depends heavily on government programmes and, despite a climate of relative fiscal austerity, the government will remain the largest spender onIT services, followed by financial services and telecoms. A global leader in the development and use of Information and Communication Technologies for socio-economic development

ICT Sector Analysis (3) • Key ICT trends in SA continued: • It is projected that per capita consumer electronics spending will grow at a 11% CAGR to reach US$248 by 2016, from US$174 in 2012. Drivers will include increased broadband and mobile subscriber penetration, faster digital TV migration and falling prices of notebooks and flat screen TV sets as well as government digital divide programmes. • In South Africa, the relatively low penetration of existing and emerging ICT products and services means there is significant growth potential in the sector. We expect this, along with a favourable macroeconomic outlook and progressive regulatory environment, to attract investments into the ICT sector and drive growth as well as job creation. A global leader in the development and use of Information and Communication Technologies for socio-economic development

Market Analysis (1) • The market is segmented into 4 sub-sectors: telecommunications, Broadcasting, Postal and e-Commerce. • The ICT market for the period between 2010 and 2012 accounted for an estimated 7% of GDP – (report BMI -2012). • South Africa’s markets are very similar to other concentrated markets such as New Zealand, which has a mobile duopoly, which is dominated by TelmexSincumbent with greater than 50% market share. • South Africa has two fixed operators and four Mobile Operators. The South African market for mobile value added services (VAS) continues to grow. • Other services continue to grow in popularity including mobile TV, mobile banking and location based services.

It was estimated that South Africa had just over 7 million internet users at the end of 2011. This is equivalent to more than 14% of the population, which means that, during the year, the internet users base expanded by around 17%. Forecast 2012/13, South Africa will have more than 8.25 million regular internet users, equivalent to over 16% of the population In 2013, we will licence spectrum for broadband in 2.6 Ghz and 700 to 800 Mhz of Radio Frequency Spectrum to bolster access to broadband and to facilitate competition through new licensees into the market. This will generate more investment in the sector SABC revenue started to grow between 2009/10 and 2010/11, due to an increase in advertising revenues which increased by 19% year-on-year. In 2009 Top TV became the first subscription competitor to DSTV but has only managed to secure a miniscule share of the market. By 2010 2,639,341 subscribers were on Digital Satellite TV (DSTV), 95% of this number subscribe to the premium service, with only 123,686 subscribers remaining on the analogue service. Market Analysis (2)

IT is the growing subsectors of the ICT Market in South Africa, supported by the e-commerce legislation, the ECT Act 2005. Online services are also growing with the licensing of domain names by ZA Domain Name Authority providing easy access to online registration. The South African IT market revenue grew 2.5% from R60.36 billion in 2008 to reach R61.85 billion in 2009, (BMI-TechKnowledge ). The company expects the IT market to grow by 2.5% to R63.41 billion in 2010, and at a compound annual growth rate (CAGR) of 6.3% to reach R83.97 billion in 2014. The Postal Market, offers huge opportunities in business and banking services. The plans to establish a Postbank as the bank of choice for the unbanked will get these majority of people on the banking network by 2014. The South African Post Office Group posted strong financial results for the financial year ending March 2011, achieving a 3% increase in revenue to 5,8 billion. SAPO turn-over for 2012 accounts to R6 billion with courier service at R1.8 billion. Market Analysis (3)

Prioritisation • Through extensive engagement and to ensure strategic alignment, the following have been identified as DoC priorities: • Top 5 Strategic Priorities • Broadband • Broadcasting Digital Migration • E-Skills • Postbank • ICT Policy Review • Other Key Priorities • 6. Public and Community Broadcasting • ICT Research • Radio Frequency Spectrum • Cyber Security • The above priorities will be further elaborated on in subsequent slides. A global leader in the development and use of Information and Communication Technologies for socio-economic development

Top 5 Strategic Priorities (1) Stemming from the analysis as mentioned in the previous slides, with specific reference to the NDP, the following have been identified as the 5 high impact priorities of the DoC. This streamlining will ensure a focused approach given the Departments limited resources. A detailed analysis has been conducted in terms of the current challenges/gaps within these strategic priorities so as to ensure that the Department addresses such areas through the implementation of specific interventions A global leader in the development and use of Information and Communication Technologies for socio-economic development

Top 5 Strategic Priorities (2) • Broadband • Based on the 2012 Broadband study commissioned by DoC - there is clearly lack of adequate broadband infrastructure, low broadband penetration per user, high cost of broadband access and limited competition. • Broadband policy focus aims to achieve 100% Broadband access and population coverage by 2020 as adopted by the NDP • Existing broadband backbone and access infrastructure focuses on the metropolitan areas, and the cost is unaffordable to the vast majority of the people. • In order to address market failures an the current status of Broadband in South Africa, the DoC will focus on finalising the Broadband Policy and Strategy to facilitate the deployment of Broadband backbone and access infrastructure especially in rural and underserved areas, with specific focus on public facilities. A global leader in the development and use of Inf: ormation and Communication Technologies for socio-economic development

Top 5 Strategic Priorities (3) • Broadcasting Digital Migration (BDM) • Spectrum availability constraints the growth of the Broadcasting Sector. • The current analogue technology means that there is limited space for growth in the Broadcasting Sector. • This resulted in a decision by the ITU to migrate from analogue to digital broadcasting so as to achieve digital inclusion through a multiplicity of channels. • The Department does acknowledge current challenges affecting specific facets of the BDM value chain which it is addressing. However, over the short to medium term, priority will be given to, amongst others, expanding national DTT and satellite coverage, allocations of subsidised STBs, STB installer training as well as provision of technical user-support. A global leader in the development and use of Inf: ormation and Communication Technologies for socio-economic development

Top 5 Strategic Priorities (4) • ICT Policy Review • Why: • Accelerate ICT market convergence particularly in the infrastructure and ICT services to develop laws that take into account latest technology developments, Digital Broadcasting • Modernising ICT Infrastructure and encourage foreign and local investment in the country. • Increasing accessibility to ICT services particularly in all rural and semi rural areas; • Employment creation, and ICT Skills production for the knowledge economy • Research and Development, and manufacturing of electronics • Ensure affordability, increase uptake and usage of ICT services. • To address market structure challenges including competition, redress – Black Economic Empowerment, • Universal access(100%) to broadband services by 2020 thereby meeting the NDP targets on social inclusion. • Addressing the regulatory imbalance where it has been observed, i.e. Funding and capacity in regulation making. • Over the short to medium term, the Department will finalise the ICT Policy review report which will feed into the development of the draft Green Paper. The Green Paper will be followed by a White Paper on National Integrated ICT Policy which will inform the drafting of the National ICT Bill. • Postbank • The Postbank plays a crucial role in providing financial services to targeted segments of our population, particularly rural and under-serviced communities. The Department in the short to medium term will prioritise the implementation of the Postbank Act with specific focus on, amongst others, incorporating the Postbank Company into a separate legal entity and processing the application for a banking license. A global leader in the development and use of Inf: ormation and Communication Technologies for socio-economic development

Top 5 Strategic Priorities (5) ICT Policy Review continued Over the short to medium term, the Department will finalise the ICT Policy review report which will feed into the development of the draft Green Paper. The Green Paper will be followed by a White Paper on National Integrated ICT Policy which will inform the drafting of the National ICT Bill. A global leader in the development and use of Inf: ormation and Communication Technologies for socio-economic development

Top 5 Strategic Priorities (6) • Postbank • Why • Bringing banking services to the unbanked section of the population • Create a bank that makes it possible for the lower income segment of population to access affordable banking services. • Through modern banking facilities that are accessible throughout the country, the Postbank will encourage the culture of saving amongst citizens. • Ensuring lending to rural and lower income markets • Building a bank of first choice, by rendering transactional services and lending facilities through, amongst others the use of existing infrastructure of the SA Post Office • The Postbank plays a crucial role in providing financial services to targeted segments of our population, particularly rural and under-serviced communities. The Department in the short to medium term will prioritise the implementation of the Postbank Act with specific focus on, amongst others, incorporating the Postbank Company into a separate legal entity and processing the application for a banking license. A global leader in the development and use of Inf: ormation and Communication Technologies for socio-economic development

Top 5 Strategic Priorities (7) E-Skills South Africa has dropped from 47th to 72nd in the global e-readiness index in the last five years (2007 to 2012) simply because it does not have a coordinated approach to addressing the reality of the rapidly escalating impact of mobile ICT on every facet of South Africa’s current and future socio-economic position. Upgrading the overall skills at all layers of society and increasing efforts to build affordable infrastructure for all would allow the country to increase its ICT readiness and uptake and, in turn, spread its impacts across society (WEF, 2012). No government can sustain socio-economic equity, prosperity and social participation without a proactive approach to skilling itself (Government, Business, Education, Civil Society and organised labour) to being responsively engaged in an ICT enabled environment. In order to address the current e-Skills gaps in the country, in the short term, the Department will prioritise the establishment of a Single Integrated Entity for e-Skills through the collaboration of the e-Skills Institute, NEMISA and ISSA. Over the short to medium term, this newly established Single Integrated Entity for e-Skills will focus on development of the National e-Skills Development Plan and will implement a range of e-Skills initiatives aimed at increasing the e-Skills capacity across Government, business, educations, civil society and organised labour. A global leader in the development and use of Information and Communication Technologies for socio-economic development

Other Key Priorities (1) Public and Community Broadcasting In terms of Public Broadcasting, over the short to medium term, the Department will focus on completing the Public Broadcasting Policy review towards the development of a Position Paper which will inform the Public Broadcasting (SABC) Bill and Act. With regards to Community Broadcasting, the Department intends in the short term to finalise the Community Broadcasting Support Strategy and commence with immediate implementation after approval. ICT Research Programme 3 of the Department, Policy Research and Capacity Building, will have a specific research focus which will entail the development and implementation of a focused Research Programme aimed at supporting priority policies. Attention will be given to WSIS thematic areas aligned to Government priorities, publishing of revised e-Barometer indicators as well as ITU-D guidelines on Green ICT’s. A global leader in the development and use of Information and Communication Technologies for socio-economic development

Other Key Priorities (2) • Radio Frequency Spectrum • The Department’s immediate focus will largely be on reviewing the current Radio Frequency Plan, in consultation with ICASA, taking into account the decisions of WRC-12 and the outcomes of the recent spectrum audit. Specific emphasis will be given to the spectrum requirements for security services. • Focus will also be given to issuing Policy Directions on the exploitation of the Digital Dividend to support ICT infrastructure and services. • Cybersecurity • Following the approval of the Cybersecurity Policy Framework, immediate focus will be on the establishment of the Cybersecurity Hub in support of a secure broadband infrastructure. The Department will also work towards the development of a Virtual Cybersecurity Hub. A global leader in the development and use of Information and Communication Technologies for socio-economic development

Strategic Risks (1) The Department has identified several cross-cutting operational risks for which it has also identified relevant mitigating strategies. However the table below provides a summary of only the Strategic Project Specific Risks and the identified mitigating measures: A global leader in the development and use of Information and Communication Technologies for socio-economic development

Strategic Risks (2) A global leader in the development and use of Information and Communication Technologies for socio-economic development

Overview of the Plan (1) • The 2012-2017 Strategic Plan & APP comprises of 5 Strategic Goals supported by 12 Strategic Objectives and 34 Targets for 2012/13. • The 2013-2018 Strategic Plan & APP comprises of 5 Strategic Goals supported by 11 Strategic Objectives and 28 Targets for 2013/14 spread across its 5 Programmes. • The reduction in targets were largely due to consolidation and streamlining of targets through focus planning as well as reviewing of targets through re-prioritisation. • The Annual Performance Plan further unpacks Year 1 (2013/14) into quarterly targets which can be found in the detailed plan. A global leader in the development and use of Information and Communication Technologies for socio-economic development

Overview of the Plan (2) • New Budget Programme Structure • Through engagements with National Treasury, the Department has a new Budget Programme Structure which has also informed the development of the Annual Performance Plan. • The new Budget Programme Structure dictates that the Department will be made up of the following 5 Programmes: • Programme 1: Administration • Programme 2: International Affairs • Programme 3: Policy, Research and Capacity Development • Programme 4: Broadcasting and Communications Regulation and Support • Programme 5: ICT Infrastructure Support • Further details on these Programmes and related Sub-programmes are provided in the Annual Performance Plan. A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOALS, OBJECTIVES AND 2013/14 TARGETS A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 1 Enable the maximisation of investment in the ICT sector and create new competitive business opportunities for the growth of the ICT industry for socio-economic development • DoC 2013/14 TARGETS • ICT Policy Review Report developed and Green Paper on National Integrated ICT Policy published • Postbank Bill promulgated and Postbank Corporatised • SAPO SOC Ltd Amendment Bill submitted to Cabinet and tabled in Parliament • Electronic Communications Amendment Bill tabled in Parliament • ICASA Amendment Bill tabled in Parliament • Public Broadcasting Policy Review completed and Position paper developed and consulted • Community Broadcasting Support Strategy approved and implementation commenced • e-Strategy Framework , including vision 2020, developed in line with ECT and NDP STRATEGIC OBJECTIVE: 1.1 Inclusive economic growth through the development and implementation of ICT policies and legislations 38 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 2 Ensure that ICT infrastructure is accessible, robust, reliable, affordable and secure to meet the needs of the country and its people • DoC 2013/14 TARGETS • Broadband policy, Broadband strategy and Broadband implementation plan approved • Relevant broadband initiatives of identified stakeholders facilitated, coordinated and monitored • Cybersecurity Hub established in support of a secure broadband infrastructure, as per NCPF STRATEGIC OBJECTIVE: 2.1 Increased Broadband coverage and affordable access to government services for all households by 2020 39 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 2 Ensure that ICT infrastructure is accessible, robust, reliable, affordable and secure to meet the needs of the country and its people STRATEGIC OBJECTIVE: 2.2 Efficient management and usage of the National Radio Frequency Spectrum • DoC 2013/14 TARGETS • Updating of current Radio Frequency Plan facilitated taking into account the decisions of WRC-12 and the outcomes of the spectrum audit • Policy Direction issued on exploitation of Digital Dividend to support ICT infrastructure and services 40 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 2 Ensure that ICT infrastructure is accessible, robust, reliable, affordable and secure to meet the needs of the country and its people STRATEGIC OBJECTIVE: 2.3 Migration from analogue to digital television by 2016 to ensure national digital coverage • DoC 2013/14 TARGETS • Public Awareness programmes implemented to reach 75% population • 88% national DTT coverage achieved • 1.5-million subsidized STBs allocated to subsidy scheme recipients (funding available for only 300 000 STBs) • Free State and Limpopo analogue transmitter networks switched –off through a phased approach • Installer training provided to installers in identified Provinces in line with phased switch-off approach • National Call centre established and operationalised to provide technical user support 41 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 3 Accelerate the socio-economic development of South Africans and facilitate the building of an inclusive Information Society through partnerships with business, civil society and 3 spheres of Government STRATEGIC OBJECTIVE: 3.1 e-Skills capacity in South Africa for employability in the knowledge economy • DoC 2013/14 TARGETS • e-Skills development plan for a single institution for • e-Skills developed 42 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 3 Accelerate the socio-economic development of South Africans and facilitate the building of an inclusive Information Society through partnerships with business, civil society and 3 spheres of Government STRATEGIC OBJECTIVE: 3.2 Growth and development of SMME’s to improve their sustainability through the use of ICTs • DoC 2013/14 TARGETS • Implementation of ICT SMME Programmes facilitated focusing on e-Commerce, export readiness and the BDM value chain 43 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 3 Accelerate the socio-economic development of South Africans and facilitate the building of an inclusive information Society through partnerships with business and civil society and 3 spheres of Government STRATEGIC OBJECTIVE: 3.3 ICT research and development to improve evidence based policy making for economic growth and global competitiveness • DoC 2013/14 TARGETS • Research Programme developed and implemented focused on supporting priority policies 44 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 4 Improve Departmental performance and enhance the role of ICT SOEs as the delivery arms of Government STRATEGIC OBJECTIVE: 4.1 Efficient and effective oversight to SOCs and ICASA • DoC 2013/14 TARGETS • Submissions of entities facilitated, reviews and assessments of all mandatory legislative reports and plans undertaken and recommendations to the Executive Authority made within 30 days of receipt 45 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 4 Improve Departmental performance and enhance the role of ICT SOEs as the delivery arms of Government STRATEGIC OBJECTIVE: 4.2 Enhanced departmental performance through improved institutional processes and mechanisms • DoC 2013/14 TARGETS • Organizational change and transformation interventions implemented and monitored to promote organisational excellence 46 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 5 Contribute to the global ICT Agenda prioritising South Africa’s development STRATEGIC OBJECTIVE: 5.1 South Africa’s active participation in bilateral and other African International Forums to advance the SA ICT Agenda • DoC 2013/14 TARGETS • Africa ICT Infrastructure Programmes developed, facilitated and implemented within relevant Forums • RSA ICT position further advanced through increasing SA’s influence in ICT Multilateral Forums, facilitating strategic multilateral partnerships, contributing to international agreements and coordinating the implementation of decisions of major summits • Relations with South-South countries further strengthened to promote the national ICT Agenda 47 A global leader in the development and use of Information and Communication Technologies for socio-economic development

STRATEGIC GOAL 5 Contribute to the global ICT Agenda prioritising Africa’s development STRATEGIC OBJECTIVE: 5.2 Explore and exploit trade and investment opportunities for the ICT sector in South Africa • DoC 2012/13 TARGETS • Trade and investment opportunities identified and exploited for the ICT sector and additional programmes developed and implemented. 48 A global leader in the development and use of Information and Communication Technologies for socio-economic development

Human Resources • Core Competencies: • Comprehensive Skills Audit has been concluded. • Through the Skills Audit, skills gaps have been identified and action plans will be implemented from April 2013 to address gaps such as spectrum engineers, broadband, cybersecurity specialists broadcasting, postal, finance and ICT Research specialists. • HR initiatives: • Implementing the HR Plan and Strategy which focuses on the following • amongst others: • Offering of Bursaries to DoC employees • Implementing policy guidelines on recruitment such as scarce skills dispensation • Implementing a Works Place Skills Plan flowing from the Skills Audit • Implementing retention strategies • Implementing succession planning strategies (career-pathing, multi-skilling, mentoring, internal promotions) A global leader in the development and use of Information and Communication Technologies for socio-economic development

Monitoring Industry Performance for Policy Impact Monitoring and Evaluation (1) • DOC regularly conduct studies to determine access to services and to determine policy or failure. The law also provides for ICASA to make policy recommendations to the Minister. • Other tools used by the Department are the following: • - Monthly and Quarterly market reports (Internal) • - Broadband Study – 2012 • - Telecommunications Benchmark study - 2008 • - e-Readiness Report – (eBarometer Report) - 2011 • - National Growth Path Employment reports (Internal) • - Financial Model for Public Service Broadcasting – Nov 2011 • - Sustainability Model for Community Television - Jan 2012 • - Impact study for the Community Radio Support Programme - 2011

DoC Vision, Mission & Mandate