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Making the National Development Plan work for SA's ICT sector
Alison Gillwald
Research ICT Africa & University of Cape Town IIC SA Africa Chapter Launch, Sandton, Johannesburg
13 June 2013
Version: 1 8 May 2013)
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Key issues raised ‣ ICT on national agenda as strategic sector? ‣ Failed to capitalise on global expansion of ICT/
conditions for investment & innovation ‣ Policy paralysis/regulatory bottlenecks ‣ Institutional design and capacity/leadership ‣ Role of State in sector/developmental state
• sector dimensions to role state can perform as a result of differing production requirements and modes of governance
‣ Market structure/state-owned entities/ ‣ State co-ordination within/between sector ‣ Demand stimulation - education ‣ Backward macroeconomic constraints on sector
• aggregate demand for skilled labour that will ensure high margins and abnormal profits as demand will exceed supply for the foreseeable future.
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Pricing
Comparison of mobile termination rates in US cents (FX=average 2012)
Comparison of OECD low user fixed price baseket US cents (FX=average 2012)
Comparison of broadband rates in US cents (FX=average 2012)
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Global ICT indices
ICT Development
Report ‣ ICT Readiness
(infrastructure, access)ICT Use (intensity)ICT Capability (Skills)90/155 overall 2013
‣ 95/155 price basket 20131996 rank 40
‣ 2002 rank 77th 2005: rank 91st 2007: rank 91st 2008: rank 92nd
WEF Network Readiness
‣ 70% of 144 2013 (72/2012)
‣ 140/144 Education system
‣ Maths and Science 143/144
‣ Fallen from 34th in 2004, 37th in 2005, 47th in 2006, 51st in 2007, 52nd in 2008.
‣ Major barriers to market growth:
Lack of backbone/backhaul networks (market structure)
High costs of access to communications (lack of fair competition)
Effective regulation (institutional arrangements)
Skilled labour supply and consumers
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Pricing
Comparison of mobile termination rates in US cents (FX=average 2012)
Comparison of OECD low user fixed price baseket US cents (FX=average 2012)
Comparison of broadband rates in US cents (FX=average 2012)
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Up to a two line subtitle, generally used to describe the takeaway for the slide
Mobile Pricing - interconnection/retail
South Africa, Low User basket in US cents based on average exchange rates in 2011
Source: Research ICT Africa Pricing Portal 2013
Table 8: September 2012: Monthly costs of OECD low user basket 2006 definition in USD Cheapest product -dominant operator Cheapest product in country
Rank US$ Rank US$ Mauritius! 1 2,39! 6 2,39!Kenya! 2 2,61! 3 1,90!Namibia! 3 2,74! 7 2,74!Egypt! 4 2,85! 8 2,85!Sudan! 5 3,08! 1 1,17!Ethiopia! 6 3,33! 10 3,33!Ghana! 7 3,38! 9 3,28!Libya! 8 3,90! 14 3,90!Rwanda! 9 4,28! 15 4,28!Tunisia! 10 4,30! 2 1,81!Guinea! 11 4,62! 4 1,93!Sierra Leone! 12 5,04! 12 3,88!Benin! 13 5,21! 17 5,21!Tanzania! 14 5,40! 11 3,75!Uganda! 15 5,51! 16 4,51!Congo Brazzaville! 16 5,63! 18 5,63!Nigeria! 17 5,85! 13 3,89!Algeria! 18 6,21! 5 2,28!Mozambique! 19 7,20! 20 7,20!Mauritania! 20 8,02! 23 7,77!Sao Tome & Principe! 21 8,21! 25 8,21!Liberia! 22 8,51! 24 8,09!Mali! 23 8,78! 28 8,78!Burkina Faso! 24 8,88! 27 8,53!Togo! 25 9,28! 31 9,28!Botswana! 26 9,41! 22 7,66!Cameroon! 27 9,61! 33 9,61!Central African Republic! 28 9,86! 34 9,86!Senegal! 29 10,08! 32 9,37!Chad! 30 10,14! 35 10,14!D.R. Congo! 31 10,37! 21 7,62!Côte d’Ivoire! 32 10,41! 36 10,41!South Africa 33 11,07 19 6,93 Zambia! 34 12,05! 26 8,22!Madagascar! 35 12,24! 37 11,71!Niger! 36 12,30! 29 8,88!Swaziland! 37 12,53! 40 12,53!Morocco! 38 12,93! 42 12,93!Zimbabwe! 39 13,48! 41 12,56!Angola! 40 13,76! 38 12,13!Malawi! 41 14,51! 43 14,51!Lesotho! 42 15,24! 39 12,43!Gabon! 43 16,11! 30 9,09!Cape Verde! 44 18,15! 44 18,15!Source: Research ICT Africa !FX= average 2010!
Table 3 Mobile Termination glide Path Peak Off Peak
ZAR US cents ZAR US cents
March 2011 0,73 10,11 0,65 9,00
March 2012 0,56 7,76 0,52 7,20
March 2013 0,40 5,54 0,40 5,54
Asymmetrical termination rates may apply, whereby operators with less than 25% market share could charge up to 20% more for calls they carried on their networks between 1 March 2011 and 28 February 2012. Thereafter, the maximum premium they could charge fell to 15%, and finally, in March 2013, it will fall to 10%. Only Vodacom and MTN have more than 25% of the mobile market, and only Telkom has more than 25% of the fixed market.
Source: Government Gazette No. 33698, 29 October 2010. Call Termination Regulations Exchange rate based on average exchange rate for 2011
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Up to a two line subtitle, generally used to describe the takeaway for the slide
Quality of Service -
Table 10: Mobile broadband monthly cost in USD for 24 months period for the cheapest product available in a country
Countries
Postpaid Prepaid
comments 1 GB 5GB uncapped 1 GB 5GB
min. 7.2 Mbps
min. 7.2 Mbps
min. 7.2 Mbps
min. 7.2 Mbps
min. 7.2 Mbps
Botswana 26,70 133,51 na 78,81 381,08 no uncapped service
Ghana 14,36 36,10 na 6,21 36,10 no uncapped service
Kenya 7,30 7,30 7,30 8,68 34,05
Mozambique 30,44 68,04 na 25,07 57,28 no uncapped service
South Africa 12,07 26,61 32,80 12,64 21,85 Uncapped only 3GB at full speed than 256k
Tanzania 13,00 16,20 22,60 13,00 16,20
Uganda 18,67 37,78 37,78 14,49 40,81
Source: Research ICT Africa Pricing Portal 2013
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Up to a two line subtitle, generally used to describe the takeaway for the slide
State ownership in ICT sector 2012
Source: Research ICT Africa 2012. Source: Research ICT Africa 2013.
Telkom 2013
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Increasingly post-access policy challenges around optimal use
Lagging comparator countries in key indicators
Table : Summary of ICT Access in South Africa from Census 2012 and Research ICT Africa Household & Individual User Survey 2012
Census Data! RIA Survey Data!
2006! 2011! 2007! 2011!
Households with Fixed Line! 18,5%! 14,5%! 18,2%! 18,0%!
Households with Computer! 15,6%! 21,4%! 14,8%! 24,5%!
Household with Radio! 76,5%! 67,5%! 77,7%! 62,3%!
Households with Television! 65,5%! 74,5%! 71,1%! 78,2%!
Households with Internet! 35,2%! 4.8% (Household)!15.0% (Individual)!
19.7% (Household)!33.7% (Individual)!
Cellphone Ownership! 72,7%! 88,9%! 62,1%! 84,2%!
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Inequality in use – determined by education & income
Table 6: Internet access and use! National! BoP! RoP! Male! Female!15+ using the Internet! 33,7%! 18,4%! 40,3%! 40,6%! 28,6%!Used the Internet first on a computer ! 65,1%! 52,5%! 70%! 70,1%! 57,2%!Used the Internet first on a mobile! 34,9%! 47,5%! 30%! 29,9%! 42,8%!
Where did you use the Internet in the last 12 months?!
Any place via a mobile telephone! 70,8%! 70,7%! 68,7%! 70,7%! 70,9%!
Home! 42,7%! 15,5%! 48%! 46,2%! 38,4%!Work! 35,9%! 6,5%! 45,3%! 44,5%! 25,4%!Place of education! 20,6%! 23,3%! 17,6%! 19,6%! 21,9%!Internet Café! 32,5%! 40,5%! 32,5%! 23,7%! 11,5%!
Are you signed up for any online social network (Facebook, Mxit, Twitter etc.)?!
74,9%! 52%! 78%! 73,6%! 76,4%!
Do you have an email address?! 65,9%! 29,3%! 75,9%! 67,0%! 64,6%!How often on average have you used the internet in the last 3 months?!
Every day or almost every day! 64,5%! 44,6%! 68,9%! 63,8%! 65,3%!
At least once a week! 24,4%! 28,3%! 23%! 28,1%! 19,9%!At least once a month! 9,2%! 27,1%! 5,8%! 6,6%! 12,5%!Less than once a month! 1,9%! 0%! 2,2%! 1,5%! 2,3%!
What limits your use of the Internet?!
there is no interesting content for me! 20,4%! 30,5%! 19,4%! 12,3%! 30,3%!
lack of local language content! 8,4%! 4,3%! 9,3%! 8,8%! 8,0%!
the Internet is very slow! 24,9%! 20,8%! 25,3%! 25,6%! 24,1%!
to expensive to use! 37,8%! 47,9%! 36,1%! 34,4%! 42,1%!few people to communicate with via the Internet!
19,0%! 21,8%! 19,3%! 12,6%! 26,9%!
How concerned would you be about security of your credit card or banking information when or if you ever bought something on the internet? Would you be:!
Not at all concerned! 7,9%! 7,3%! 6,3%! 6,8%! 9,2%!Somewhat concerned! 12,3%! 11,3%! 13,4%! 12,1%! 12,6%!Very concerned! 48,5%! 49,3%! 47,3%! 45,2%! 52,5%!
Extremely concerned! 31,3%! 32,1%! 33%! 35,9%! 25,7%!
Source: Research ICT Africa
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Perception survey of stakeholders Telecommunication Regulatory Environment
ineffecBve and +2 highly effecBve
Source: Research ICT Africa, 2012
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���Current initiatives limited by industrial age, siloed approaches to converged – NDP by infrastructure perspective primarily, ICT not threaded through Plan as it is in contemtporary society and knowledge economy� ‣ 100% broadband penetration
2020
‣ Broadband policy
‣ ICT Expert Panel Policy Review (2012)
‣ New Broadband Policy 2013
‣ Infraco/Telkom?
‣ ICT Charter 2012 - 30% black ownership target
‣ Integrated e-strategy
‣ intergovernmental co-ordination and public and private co-ordination
‣ Effective regulation of markets
‣ 100% broadband penetration by 2020 (>2mbs)
‣ 2030 deployment for full range of government, educational, informational services
‣ ULL, high demand spectrum, structural separation
National Development Plan 2020 +
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ICT ecosystem as basis of sector framework
Services
Networks
Apps Content
Policy & Legal Framework
Institutional Arrangements
(NRA, CC, USF)
Mar
ket S
truct
ure
(com
petit
ivene
ss)
Global/regional GovernanceITU, ICANN, WTO
StateConstitution
Glo
bal p
laye
rs a
nd a
ssoc
iatio
nsG
oogl
e, F
aceb
ook,
GSM
A
Multilateral Agencies
(WB, AfDB, International Donors
Innov
ation
Inves
tmen
t
UsersConsumers
Citizens
Affordability
Access
Employment
Human Development
(e-skills)
National/industry formations(unions, industry associations, NGOs)
Adapted from Gillwald (2012)
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Recommendations ‣ Role of state to create an enabling environment for investment and innovation
through appropriate market structure, effective and certain regulation, that results in lower prices and lead to better and faster access:
‣ If backbone competition unfeasible consolidate state owned entities (to create open access carrierunbundle backbone and create open access carrier network – not necessarily or preferably state owned
‣ Free up and release critical spectrum for wireless broadband through competitive allocation, actively deploy white spacecogntivie radio alternatives/ preserve spectrum commons
‣ Service neutral licensing and enable self provisioning by different levels of government, communities etc.,
‣ Remove special taxes/duties on ICT equipment and services, bring down prices, grow services and general tax base
‣ Use existing unused USF levies to build out network in underserved areas and use once off reverse bids to service areas.
‣ Demand stimulation strategies including e-skills development/improve labour supply
‣ Participate progressively in global governance.. 15
This research is made possible with the support of the following entities
‣ This research is made possible with the support of IDRC, Google and OSI. ‣ See www.researchICTafrica.net
