SA: Minister Cwele on reducing telecommunication costs

13th March 2018

SA: Minister  Cwele on reducing telecommunication costs

Telecommunications and Postal Services Minister Siyabonga Cwele
Photo by: GovtZA

Earlier today, the Minister of Telecommunications and Postal Services Dr Siyabonga Cwele and Deputy Minister Ms Stella Ndabeni-Abrahams led the Department’s presentation to the Parliamentary Portfolio on the work being done to reduce telecommunication costs and on the implementation of the ICT SMME Development Strategy.

This work is key to the Department’s effort to expedite ICT facilitated socio-economic development characterised by inclusive participation in the sector and lowering the barriers to entry for South Africans.

“One of the main reasons we still have high costs is because the industry remains highly concentrated. We are unlikely to see aggressive competition if we don’t open up the sector to more and new entrants,” said Minister Cwele.

He noted; “We have a strange market where it costs the poor more to access data than it costs the rich.”

The Minister welcomed the progress made by the Independent Communications Authority of SA (ICASA) on effective competition in the broadband market and the Competition Commission’s market inquiry into data services.

“These are necessary interventions but the turnaround is slow compared to the public demand and need,” said Minister Cwele.

ICASA is scheduled to release its findings by June 2018 which will indicate a list of markets that should be regulated and priority markets to be subjected to market reviews.

The Competition Commission is expected to release an interim report in April 2018 for public comment and a final report in August 2018.

Minister Cwele said the work of the Competition Commission will also assist to resolve the awarding of the transversal telecommunications contract to one service provider. He said the award could be problematic because it could be viewed as Government reinforcing the dominance of a single player while Government should be encouraging competition.

He said the high roaming costs in the Southern Africa Development Community are not coming down at a rate required by the citizens of the region, with South Africa moving slow compared to other countries in the regions.

Deputy Minister Ndabeni-Abrahams said the ICT SMME Development Strategy is ambitious and aims to nurture entrepreneurs from the innovation stage through to access to markets.

“As the sector, we are already doing a lot to support ICT SMMEs but we work in an uncoordinated manner and we don’t follow through. The ICT SMME Development Strategy facilitates the introduction of Techlabs, which are essentially mini innovation hubs,” said Deputy Minister Ndabeni-Abrahams.

She said the success of this strategy will also depend on all spheres of Government and its agencies paying SMMEs within 30 days to minimise the chances of these small businesses running into cash flow problems.

The Department is planning to facilitate the establishment of 96 Internet Service Providers over three years, prioritising the youth and women and to increase awareness and participation of SMMEs in e-Commerce.

“e-Commerce is where everybody is going. We need our SMMEs to participate in this space and develop their own e-Commerce platform,” said Ndabeni-Abrahams.

The Department further plans to facilitate and monitor the implementation of the minimum set-asides of 30% for procurement of services from SMMEs along the entire ICT value chain from the financial year, starting in April 2018.

Issued by Department of Telecommunications and Postal Services