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South Africa's ICT Competitiveness: Progress and Challenges

This report examines South Africa's progress and challenges in terms of international and national competitiveness in the ICT sector, focusing on areas such as mobile networks, broadcasting, infrastructure, and policy considerations. It highlights key milestones, market growth, and policy issues affecting the ICT industry in South Africa.

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South Africa's ICT Competitiveness: Progress and Challenges

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  1. South Africa’s International and National Competitiveness 3-4 February 2015 PAKAMILE PONGWANA

  2. How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 1994 – 2015 Milestones [ Fixed Market] • Before 1994: only one fixed line operator • Less than 4 million lines in operation • 2015: • 4 mobile operators covering more than 99% of the population • Over 100 fixed line service providers • Fixed line use has stagnated SOOG 2 SOOG 3 SOOG 4

  3. How far have we come? • South Africa has moved from 2 Mobile Network Operators (Telecommunications Act) 4 MNOs by 2012 (ECA), where the limit is governed by available spectrum • Universal Service: • 99% population coverage for mobile voice services • Estimated 60 million unique SIM subscribers • 48th in the world according to the WEF • Demand for data exploding: • 80% growth for Vodacom in 2014 • Forecast mobile data growth at a compound annual rate of 53% by 2018(Cisco). • Termination rates: • Down from R 1.25 in 2009 to R 0.20 in 2014 – 84% reduction • Retail prices: • 2005: Approx. R 3.20 • 2014: Approx. R 0.60 (reduction of 81%) Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 1994 – 2014 Milestones [Mobile] • South Africa has moved from 2 Mobile Network Operators(Telecommunications Act) 4 MNOs by 2012 (ECA), where the limit is governed by available spectrum • The mobile data market is a growing market, with growth rate reported at XXX % in 2014? • Universal Service: • 99% population coverage for mobile voice services • 48th in the world according to the WEF • Termination rates: • Down from R 1.25 in 2009 to R 0.20 in 2014 – 84% reduction • Retail prices: • 2002: • 2015: SOOG 2 SOOG 3 SOOG 4

  4. How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 1994 – 2014 Milestones [ Broadcasting ] 1994: • one free to air broadcaster (SABC) • One subscription service (Mnet) • Limited commercial & radio stations 2015: • A total of 255 Broadcasting Sound (Radio) licensees, whilst there are 12 Broadcasting Television licensees. SOOG 2 SOOG 3 SOOG 4

  5. How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 International infrastructure 1994: 1 cable Telkom controlled 2015: 6 cables multiple owners SOOG 2 SOOG 3 SOOG 4

  6. How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 2015 Local Infrastructure: • National connectivity: • Telkom: 140,000 km • Neotel/BBInfraco: 10,000 km • Fibreco: approx. 2,000 km • Vodacom/MTN/Neotel: 5,000 km • Local Access • Fixed Line: approx. 4 million copper lines fixed wireless in major centres • Mobile: SOOG 2 SOOG 3 SOOG 4

  7. International competitiveness Strategic Outcome Oriented Goals (SOOGs) of ICASA Where does South Africa stand: SOOG 1 So SOOG 2 SOOG 3 SOOG 4 ICTs are the driver of GDP in the future SA GDP ranking is 33rd in the world This will fall if we are unable to leverage and enable internet deployment and use

  8. Internet competitiveness Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 • SA is ranked 58th of 117 countries by OOKLA • SA has lowest top city high speed connection speed of BRICS nations • SA is ranked 73rd according to WEF SOOG 2 SOOG 3 SOOG 4

  9. Contribution to employment Strategic Outcome Oriented Goals (SOOGs) of ICASA • Total of 32 445 employees (June 2014) • 36% of workforce is female SOOG 1 1994 – 2014 Milestones [Mobile] • South Africa has moved from 2 Mobile Network Operators(Telecommunications Act) 4 MNOs by 2012 (ECA), where the limit is governed by available spectrum • The mobile data market is a growing market, with growth rate reported at XXX % in 2014? • Universal Service: • 99% population coverage for mobile voice services • 48th in the world according to the WEF • Termination rates: • Down from R 1.25 in 2009 to R 0.20 in 2014 – 84% reduction • Retail prices: • 2002: • 2015: SOOG 2 SOOG 3 SOOG 4

  10. Policy Considerations for Convergence Broadcasters Fixed Networks Access Avenues Internet Social applications – WhatsApp videos Mobile Networks Content Policy Issues Local Content Competition Child Safety

  11. Constraints Strategic Outcome Oriented Goals (SOOGs) of ICASA • Human capital and innovation- • Shortage of engineers and skilled workers • Power supply • Current mobile retail prices are dependent on current electricity prices and supply from Eskom • Forced use of generators will increase costs • Spectrum delays in Digital Migration policy and Policy on High Demand spectrum • Rights of Way – municipalities prevent licensees from deploying infrastructure • Regulatory delays – lack of funding and adequate technical skills leads to long lead-times and reliance on consultants to conclude regulation-making SOOG 1 SOOG 2 SOOG 3 SOOG 4

  12. Opportunities Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 • Network deployment: • Rights of Way – constitutional court recently ruled in licensees’ favour on the right to access and deploy infrastructure • Job creation: • Construction and electro-technical skills in deployment of networks • High demand for: • Technical skills for repair and maintenance of networks • “low current” electrical as well as spectrum management engineers • South Africa could drive regional internet penetration and global access to the internet with partnerships with our neighbours: • Cost-based access to under-sea cables • Cost-based access to long-distance backhaul services SOOG 2 SOOG 3 SOOG 4

  13. Catch up Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 • Policy co-ordination • Conclude ICT Policy Review collectively • Review institutional make-up • Release spectrum policy • Broadband Internet 4G • Release of spectrum • Fast-track digital migration • Subsidise digital televisions • remove encryption • Resolve funding challenges for: • ICASA • SABC • SAPO SOOG 2 SOOG 3 SOOG 4

  14. Catch up Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 • Policy co-ordination • Conclude ICT Policy Review collectively • Review institutional make-up • Release spectrum policy • Broadband Internet 4G • Release of spectrum • Fast-track digital migration • Subsidise digital televisions • remove encryption • Resolve funding challenges for: • ICASA • SABC • SAPO SOOG 2 SOOG 3 SOOG 4

  15. Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 THANK YOU SOOG 2 SOOG 3 SOOG 4

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