Telecommunications Act Objectives

1
Telecommunications Act Objectives

• Convergence Summit
• 28 August 2006
• Wanderers Club, Illovo

2
Purpose of this session

• Report on the extent to which the objectives of
  the Telecommunications Act (103 of 1996), as
  amended were achieved (in the period 1997 to
  2004)
• Researched by Adrian Schofield, Head of Research,
  and Hlengiwe Sithole, Senior Researcher

3
Terms of Reference

• The purpose of the study is to determine how far
  the country has gone to achieve the
  accomplishment of the objectives of the Act and
  what has been the contribution and role of
  government, NGOs, SMMEs and the private sector
• The key deliverable is a study on the achievement
  of the objectives as outlined in the
  Telecommunications Act of 1996

4
The objectives (1)

• (a) promote the universal and affordable
  provision of telecommunication services
• (b) promote the provision of a wide range of
  telecommunication services in the interest of the
  economic growth and development of the Republic
  
• (c) make progress towards the universal provision
  of telecommunication services
• (d) encourage investment and innovation in the
  telecommunications industry
• (e) encourage the development of a competitive
  and effective telecommunications manufacturing
  and supply sector

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The objectives (2)

• (f) promote the development of telecommunication
  services which are responsive to the needs of
  users and consumers
• (g) ensure that, in relation to the provision of
  telecommunication services, the needs of the
  local communities and areas are duly taken into
  account
• (h) ensure that the needs of disabled persons are
  taken into account in the provision of
  telecommunication services
• (i) ensure compliance with accepted technical
  standards in the provision and development of
  telecommunication services
• (j) ensure fair competition within the
  telecommunications industry

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The objectives (3)

• (k) promote the stability of the
  telecommunications industry
• (l) encourage ownership and control of
  telecommunication services by persons from
  historically disadvantaged groups
• (m) protect the interests of telecommunications
  users and consumers
• (n) encourage the development of human resources
  in the telecommunication industry
• (o) promote small, medium and micro-enterprises
  within the telecommunications industry

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The objectives (4)

• (p) ensure efficient use of the radio frequency
  spectrum
• (q) promote the empowerment and advancement of
  women in the telecommunications industry
• Grouped into 4 areas to simplify evaluation of
  similar objectives

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The 4 groups
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Approach and Methodology

• A multi-discipline research team
• Combination of data gathering strategies and
  processes that include
• Desktop research and analysis
• Surveys
• Interviews
• Data report methods that include
• Presentation of Findings
• Written Reports
• Limitations
• Poor response to surveys, interviews
• Reliance on published material
• Interpretation of objectives

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A brief history

• 1997 Thintana (TM SBC) 30 of Telkom
• 2000 SATRA/IBA ICASA
• 2001 Cell C licenced, 3 of Telkom to Ucingo, 65
  USA Telecentres
• 2002 end of Telkom exclusivity, Sentech
  licenced
• 2002-4 MTN empowerment deals
• 2003 Telkom listed (Khulisa offer)
• 2004 First USALs, VoIP permitted, 36.5
  mobile/10 fixed line penetration

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Key findings - USA

• Objectives (universal provision of and affordable
  access to basic telecomms services for all
  citizens, improving socio-economic circumstances
• (a) Promote the universal and affordable
  provision of the telecommunication services
• (c) Make progress towards the universal provision
  of telecommunication services
• (g) Ensure that, in relation to the provision of
  telecommunication services, the needs of the
  local communities and areas are duly taken into
  account

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Key findings - USA

• Fixed line market (4,3m) overshadowed by mobile
  growth (16,8m) (2004)
• R50bn investment but missed target by 2,1m lines
• Mobile impact improved penetration to over 50 -
  60 higher than expected, R28bn invested
• Good coverage, innovative tariffs, CSTs
• Products to reduce barriers

13
Key findings - USA

• Challenges
• Definition of Universal Service and Access
  telephony
• Impact of tariff regulation
• Use of USF
• Addressing issues of affordability
• Lack of coordination among service providers
• Lack of measurements, acceptable standards
• Lack of service map indicating where rollout
  needs to take place
• Positioning of USALs
• Mobile phones need power
• Availability, accessibility, affordability

14
Competition and Innovation

• Objectives (supporting interests of consumers and
  promoting comprehensive, stable supply of
  telecomms products and services)
• (b) Promote the provision of a wide range of
  telecommunication services in the interest of the
  economic growth and development of the Republic
• (e) Development of a competitive and effective
  telecommunication manufacturing and supply sector
• (i) Ensure compliance with accepted technical
  standards in the provision development of
  telecommunications services
• (j) Ensure fair competition within the
  telecommunications industry
• (k) Promote the stability of the
  telecommunications industry
• (m) Protect the interest of telecommunications
  users and consumers
• (p) Ensure efficient use of the radio frequency
  spectrum

15
Competition and Innovation

• Competition fosters innovation, e.g. prepaid,
  WAP, MMS
• Growth in Internet users gt30 CAGR, growth in
  broad(er)band access ISDN, ADSL, wireless
• Satellite, fibre, 3G
• Prepaid, postpaid tariff plans to meet every need
• SIM card, PST unit manufacture
• Fair competition (mobile) competition
  legislation
• Effect of licence delays but stable regulatory
  framework
• ICASA consumer outreach programme
• Management of frequency spectrum, compliance with
  ICASA, GSM, ITU, SABS standards

16
Competition Innovation

• Challenges
• Perception that prices are high
• Extension of Telkom exclusivity by gt3 yrs
• Constant upgrade of infrastructure for new
  products and services
• Quality of service
• Low visibility of local product/service
  development

17
BBBEE

• Objectives (addressing imbalances of the past,
  ensuring all citizens equally empowered and part
  of mainstream economy)
• (h) Ensure that the needs of disabled persons are
  taken into account in the provision of
  telecommunication services
• (l) Encourage ownership and control of
  telecommunication services by persons from
  historically disadvantaged groups
• (n) Encourage the development of human resources
  in the telecommunications industry
• (q) Promote the empowerment and advancement of
  women in the telecommunications industry.

18
BBBEE

• Vodacom initiatives speaking phone, TTY
  loopset, specific needs call centre, interactive
  billing
• Khulisa offer (Telkom)
• Training using BEE suppliers
• ISETT SETA
• Nedlac Jobs Summit
• ICT Charter, USAL conditions

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BBBEE

• 49,4 black board members, 19,2 black women
• Employment equity 68 - 52 (note Telkom
  reduction in workforce)
• Equity/gender pyramid still exists
• Skills development spend generally exceeds SDL
  percentage
• Significant procurement from SMMEs

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Corporate Social Investment

• Objectives investing back into the community
• (d) Encourage investment and innovation in the
  telecommunications industry
• (f) Promote the development of telecommunication
  services which are responsive to the needs of
  users and consumers
• (o) Promote small, medium and micro-enterprises
  within the Telecommunications industry

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Corporate Social Investment

• gtR100m in 2004 science technology, education,
  health, sports, arts culture, environment,
  skills development, children
• Community Service Telephones
• Free SMS (eg Please call me)
• SMME development

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Conclusions

• The majority of the objectives have been met
• The industry continues to be willing to maintain
  the performance and address outstanding goals
• The changed environment requires changed goals
  (technology neutral?)
• 100 targets are unrealistic
• Universal Service Fund needs a new approach
• Not appropriate to carry all objectives unchanged
  into Electronic Communications Bill

The world moves on!
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Moving on

• Report prepared end 2005, ToR cover period
  1997-2004
• Changes in legislation, regulation and
  implementation
• Review the objectives, check the goals, revise
  the plan

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PROGRAMME 28 August 2006 09H00 Welcome
Address Mr Chose Choeu Chairperson
USAASA 09h15 Impact Study of the Universal
Service Agency Dr Paul M Cole Dr Paul M Cole
Associates 10h00 Achievements of the
Telecommunications Act 103 of 1996 Mr Adrian
Schofield Head of Consulting, ForgeAhead 10h55
Refreshments in Exhibit Area 11h25 ICT
Penetration in South Africa Mr Craig Schwabe
Director GIS Centre, HSRC 12h05 Community
Service Telephone Mr Tebogo Khaas Chairman,
Digital IQ Corporation 12h45 USA
ResearchAfrican Response Dr Anina Maree
Director, African Response 13h25 Lunch in
Exhibit Area 14h25 Affordability and Categories
of the needy people in South Africa Mr Kobus
Liebenberg MD, Access Market International 15h00
Refreshments in Exhibit Area 15h30 Overview of
studies Stakeholders Overview 17h30
Networking Cocktail