The Ministry of Dysfunction

Perhaps no one in government actually gets it?

The Ministry of Communications is not a ‘soft’ portfolio. I would argue that, in terms of the economy, it is the third most-important department after Treasury and Trade and Industry. (The economy grows, with or without thriving public enterprises, or indeed Minister Patel’s obtuse portfolio.)

The link between broadband speed as well as penetration and economic growth is well researched and defined. In 2010, the famous study by Ericsson and Arthur D Little concluded that “for every 10 percentage point increase in broadband penetration GDP increases by 1%”. In 2011, a follow-up report for 33 OECD countries quantified the (isolated) impact of broadband speed improvements: doubling speed for an economy increases GDP by 0.3%.

South Africa isn’t an OECD country, but surely doubling broadband speed in an emerging market would have the same, if not greater impact on GDP? What about increasing penetration at a faster rate? Have we not lost hundreds of billions of rands in potential growth since 1994 (even through opportunity cost only) because of poorly-conceived and implemented policies that have throttled telecoms?

Despite the “best efforts” of the Department of Communications over the past two decades, internet penetration is 41% (a 2012 figure, as estimated by the ITU or International Telecommunications Union). We can quibble if this number’s indeed accurate, but what it does give us is a baseline. As per ITU data, penetration in South Africa has grown by 70% since 2010. That sounds commendable. However, the growth has primarily been on mobile, led by the private sector, despite – again – government’s “best efforts”.

But what of other countries on the continent? Sure, Nigeria and Kenya have penetration of 32% and 31% respectively (the same 2012 ITU data), but those numbers are up nearly 40% and 130% (respectively) since 2010. Nigeria has its challenges, but indications are that the growth rate of penetration is increasing rapidly.

Kenya is particularly interesting, because we’ve seen a concerted and deliberate push towards increasing broadband penetration and enabling ICT services by its government in recent years. The results are plain to see. Its building a R140bn+ ($14.5bn) ‘silicon’ city called Konza, 60km south-east of Nairobi.

At home, we’ve seen a minister far more preoccupied with a spat with the Sunday Times than anything else.

Internet penetration does not equate to broadband though. By the Department of Communications’ own admission, broadband penetration was far lower than internet penetration of 41% (it was 12% in 2011).  As far back as 2011, the DoC had set itself the target of “100% broadband penetration” by 2020. That’s now just over six years away. Any bets on us meeting that target?

In her May budget vote, Dina Pule provided an update of government’s “new” broadband policy (nevermind the fact that the word ‘broadband’ was mentioned just seven times in a 2600+ word speech). The policy was set to be taken to Cabinet in June. Who knows if that has happened?

The policy, we were told, would “pave the way” for Icasa to licence much-needed 800Mhz and 2.6Ghz high-speed 4G/LTE wireless spectrum.

Want to know why mobile data prices are higher than they should be and speeds far lower than they should be? The fact that allocation of this desperately-needed spectrum has been stuck somewhere between the DoC and Icasa for the better part of three years should be some indication.

We used to have a leadership position on the continent. In the mid-to-late 1990s, we were among the best in the world. Even the rollout of 3G in South Africa during the mid-2000s kept us close to the lead globally. More recently, proactive regulators in Angola, Namibia, Mauritius and Tanzania have meant that 4G networks were launched in these countries before South Africa. Here we’re stuck with operators being forced to reallocate existing frequencies – far from ideal. Something’s going to give.

I’m not even going to get into the digital terrestrial television (DTT) migration debacle. Again, we were leading the way on the continent. Now we haven’t even started and other African countries are nearly finished! More worrying than that is the huge risk in us missing the ITU’s global deadline of June 2015.

Pule’s replacement, Yunus Carrim, has a daunting in-tray. Telkom, and its role in this “new broadband policy”, needs attention. So does DTT. Then there’s the ill-conceived proposed interventions when it comes to premium TV content and sports rights, and of course all sorts of governance issues at institutions such as the Post Office. No wonder Public Enterprises Minister Malusi Gigaba had reportedly been jockeying for oversight of state-owned enterprises like Telkom, Sentech and the Post Office.

The department also desperately needs a functioning director-general. Rosey Sekese, who’s been in the position for about two years, was stripped of key powers by Pule in April (this after a three-month suspension). How it hasn’t collapsed into a heap is in itself remarkable.

Since 1994, we’ve seen seven Ministers in the DoC (eight if you count Manto Tshabala-Msimang who acted for a month following Ivy Matsepe-Cassaburi’s death in 2009).

We thought it couldn’t get much worse after Matsepe-Cassaburi. And then we had the 18-month disaster that was retired General Siphiwe Nyanda. Again, it didn’t seem the chaos under Nyanda could be surpassed. Roy Padayachie brought some sanity to the department for about a year before his redeployment. And then, Pule.

What we need now is stability. Those in the know say Carrim, while not knowing an awful lot about telecoms and communications (he’s a sociology professor), is competent.  Worryingly, there are whispers about him being a fan of nationalisation.

Will Carrim be competent enough?

More importantly, do we need only competence or did this role need someone bold and visionary?

I know which I would’ve preferred. And I know what would’ve been best for South Africa and the economy, which continues to limp along – far below its potential.

* Hilton Tarrant contributes to ‘Broadband’, a column on Moneyweb covering the ICT sector in South Africa. Every single employee at the DoC should be embarrassed that we’ve lost our leadership position in Africa. Until then, expect more of the same.

Source: Moneyweb

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The Ministry of Dysfunction