MONEY FOR NOTHING
Telecommunication operators are annoyed. They are handing over hundreds of millions of rand a year to a fund that is supposed to bring information and communication services to the rural poor — but the bulk of their contributions has not been spent.
In terms of their licences, the large operators have to contribute 0,2% of their annual turnover to the universal service fund. The universal service agency (USA), which was established in 1997, is, in turn, responsible for spending this money. But instead of funding rural telephony programmes, government is distributing only a small portion of the money collected to the USA. In the past financial year, the national treasury passed on only R29,2m to the agency, despite the operators contributing more than R200m.
Blame for slow delivery by the agency does not, however, lie with the treasury. The USA consistently underspends its already meagre budget.
The USA has long been criticised for failing in its mandate to bring telecom services to the poor. Given its inability to make full use of the funds available to it, it is not surprising that government has been hesitant to increase the amount it is allocated.
One of those unhappy about the situation is Vodacom Group CEO Alan Knott-Craig He has said previously that operators such as Vodacom have no problem making contributions to universal access but are concerned that the most is not being made of the money.
Knott-Craig is not alone. In a report released late last year, Business Leadership SA (formerly the SA Foundation), which represents 50 of SA’s largest companies, called for a review of government’s universal service policy.
Genesis Analytics researcher James Hodge, who compiled the report, said government policy must make better use of allocated funds and encourage better co-ordination with telecom operators.
USA CEO Sam Gulube acknowledges there have been problems in providing a telecom service to the poor. But he promises that these are being addressed. “We have a very good policy. The failure is in the implementation,” he says.
One of the biggest problems that has beset the agency has been a shortage of staff, Gulube says. “The staff issue has been addressed and the agency is better placed to carry out its mandate.”
Gulube, who took over three years ago, says he shares the telecom operators’ “frustration”; however, he says the agency is committed to working more closely with them.
He says the USA is starting to enjoy some success in achieving its mandate. It has established 133 telecentres which provide a range of information and communication services. It has also funded seven operators with licences for underserviced areas and provided 140 schools with computer laboratories in the past financial year.
Gulube promises that the days of the agency not spending its full budget allocation are over. It spent about R90m in the past year — the bulk of the money coming from budget rollovers — and is lobbying the national treasury for a big increase in its funding.
Rael Lissoos knows a lot about the agency’s work. As director of education group Viko, which provides wireless networks for poor rural communities, he sees the work the USA does in the field and he believes there is still a lot of room for improvement. The agency, he says, has to expand its relationships with organisations doing similar developmental work.
Lissoos wants the agency to provide more clarity about how it chooses the schools that will benefit from its programmes as well as where it sets up its telecentres. He warns that there is a pattern emerging of some schools seemingly able to get the support of a number of organisations, while others are completely ignored.
There have been occasions where the USA has set up telecentres in areas where similar services are already provided by entrepreneurs, and driving them out of business. This could be avoided through better co-ordination with other development organisations, Lissoos says. “Bad money can sometimes crowd out good money.”
Gulube claims this sort of co-operation is a priority for the USA.
The agency’s plans, however, are much bigger than simply establishing telecentres and computer laboratories. Gulube says it eventually wants to use some of the funds held by government to finance the installation of services directly into rural people’s homes.
He hopes that closer co-operation with the telecom operators will achieve this.
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