icasa budget briefing to portfolio committee on communications presented by mandla langa...

ICASA Budget Briefing to Portfolio Committee on

CommunicationsPresented By

Mandla Langa (Chairperson)

Gerhard Petrick (Councillor and Acting CEO)

Nadia Bulbulia

Julia Hope

Mamodupi Mohlala

Lumko Mtimde

Mbulelo Ncetezo

Ryan Hart (Financial Manager)

OVERVIEW

• Introduction

• Review and Outlook – Law, Communications, Consumer

Protection and Council Support

– Telecommunications

– Broadcasting

– Engineeering and Technology

• Budget

• Conclusion

LAW• ICASA operates in highly litigious environment and is constantly

faced with litigation in that, as an adjudicatory and decision making body, its decisions and rulings are challenged in court by operators.

• In the 2003/4 year ICASA faced 10 litigation matters.• Majority of cases are instituted in the High Court and the

Supreme Court of Appeal, external legal Counsel (attorneys and advocates) is required.

• The Legal Department budget of R3,000,000.00 in 2003/2004 for external legal fees.

• The lack of budget results in decisions having to be made not to oppose matters in court and to abide by court decisions.

• Increased funding would enable Legal to defend the decisions of ICASA more effectively.

Law, Communications, Consumer Protection and Council Support

Communications• Media liaison. • Stakeholder liaison – a stakeholders meeting is

held annually• The Communications Department exhibited at

several events• Staff functions are coordinated for specific

events.


Consumer Protection• The Department intensified its outreach programmes • Held road shows in three provinces, namely Eastern Cape, Northern

Cape and Mpumalanga. These provinces were chosen as a result of the analysis of complaints received. Visited towns, including Libode, Port St Johns, Qumbu Tsolo, Umtata, Qunu, Springbok, Upington, Kakamas, Mothibistad, Kuruman, Postmansburg, and Barkley West were visited and a positive response was received.

• Addresses are given at Schools, public functions, clinics and municipal events and radio programmes are conducted for public education.

• Promotional material is procured for these events. • Educational officers conducted public awareness programmes. • The Department has translated all material into all official

languages. • A pamphlet – a guide to telecommunications has been produced

and being distributed.


Consumer Protection (continued)• A Memorandum of Understanding has been

signed with telecoms operators on dealing with consumer complaints

• Establish S17 committee of Council to deal with issues affecting people with disabilities in order to keep abreast of the needs and problems encountered by people with disabilities

• Similar stakeholder committees and consumer groups would be established given increased funding.



Council Support• Supported ICASA processes • Numerous hearings held in

2003/2004 coordinated by this unit

• Books, publications and membership to professional organizations for ICASA are coordinated by this unit.

• Increased funding would facilitate more intensive workshops for staff and Council to keep them updated with legal and technological developments.

International Relations• ICASA supports and subscribes to TRASA, ITU, ATU, RIARC,

SABA and participates in International ministerial meetings.• ICASA hosts TRASA Workshops and contributes a great deal

to TRASA activities. • ICASA was appointed to Chair RIARC at the last AGM. • With more involvement in International events, ICASA

would be able to conduct studies and attend training to strengthen its regulatory capabilities in line with international standards.

• Translations and interpretation costs are incurred with hosting delegations and translation of documents. ICASA further hosts visits from other African States.


Key Outcomes for 2004/2005• Minimise risk of litigation• Procure a complaints management system• Continue outreach and road shows• Enforce MoU on complaints handling• More regular Stakeholder meetings• Implement local media monitoring• Investigate establishment of call centre

(which is intended to improve the image of ICASA and record and address all queries and conduct follow up exercises)



ICASA2003/2004 and 2004/2005Funding - Support Departments and Capital Expenditure

2003/04 2004/05Actual Budget VarianceR'000 R'000 R'000

Support DepartmentsCEO and Internal Audit 1,745 2,800 1,055CFO and Finance 5,746 7,461 1,715Information Technology 7,527 9,856 2,329Administration and Library 32,424 36,495 4,071Human Resources 4,200 6,388 2,188Legal, Council and Other 17,711 24,758 7,047

69,353 87,758 18,405

Capital Expenditure 7,221 20,078 12,857

Telecommunications

Policy Analysis• Finalised regulations i.r.o. COA/CAM for mobile

operators• Finalised regulations i.r.o. PSTN-to-PSTN interconnection• Reviewed Carrier Pre-selection regulations• Developed guidelines for Trial and Launch of New

Services• Developed guidelines for the legality of wireless local area

networks (WLANs)• Commenced with the development of Number Portability

regulations that will suit the needs of South African users

Telecommunications

Licensing, Enforcement and Number Administration• Carried out most of the processes towards the licensing of Under-

Serviced Area Licences.• Developed a comprehensive frame-work for the licensing and

regulation of VANS and PTNS.• Developed a Numbering Plan that will encourage competition within

the sector.• Began development of a Short Code Strategy for SA.• Started work on the amendment of Telkom’s licence in preparation for

competition. • Updating and finalising terms and conditions for the SNO licence

whilst amending the Telkom licence.• Developing a Central Numbering Database as required in terms of the

Act.

Telecommunications

Licensing, Enforcement and Number Administration (continued)• Undertook licence amendment process for Sentech. Application for

amendment was brought by Sentech. Public process undertaken in terms of the Act, amendments were finalised and effected subsequent to public process and amended licence was issued to Sentech.

• Undertook licence amendment process for WBS. Application for amendment was brought by WBS. Public process undertaken in terms of the Act, amendments were finalised and effected subsequent to public process and amended licence was issued to WBS.

• In the process of rectifying a breach committed by Swiftnet with regard to the minimum of 30% shareholding to be vested in the hands of historically disadvantaged individuals. Rectification of the breach involves the undertaking of a licence amendment process.

• Continuously in process of clamping down on illegal providers of telecommunication services.

• In the process of dealing with access to 1800MHz and 3G frequency spectrum bands by the Mobile Cellular Telecommunications Service licensees.

TelecommunicationsKey Objectives and expected outputs for 2004/2005

– Second phase of Under-serviced area licensing.– Finalisation and issue of the SNO licence.– Finalisation and issue of amended Telkom’s PSTS licence.– Development and subsequent management of central numbering

database.– Finalisation of the short code strategy.– Development of functional specification and order handling.– Development of Mobile Operators QoS Audit Performance

Indicator regulations.– Development of Telkom/SNO service target audit performance

indicator regulations.– Finalisation of number portability regulations.– Undertake a review of fixed line tariff regime.– Implement COA/CAM for mobile operators.– Implement COA/CAM for PSTS.– Undertake a formal market determination in the sector.

Telecommunications

NB: The above are the direct monetary benefits. It does not include indirect benefits such as organisational capacity building, advisory services and sector developmental benefits.

Outline the extent of DFID assistancePROJECT ESTIMATE

PSTN-to-PSTN interconnection R 800,000.00

Review of Carrier Pre-selection regulations R 275,000.00

Under-serviced Area licensing process R 495,000.00

Number Portability R 515,000.00

Numbering Plan R 255,000.00

Numbering Database R 616,000.00

Mobile COA/CAM R 230,000.00

TOTAL R 3,186,000.00

TelecommunicationsICASA2003/2004 and 2004/2005Funding - Telecomm Services Division


Telecomm Services

Salary and related costs 3,292 5,513 2,221 - General manager's office 619 698 79 - Policy department 1,141 2,387 1,246 - Licensing department 1,532 2,428 896

Project costs 2,472 6,752 4,280 - Policy department 1,207 2,047 840 - Licensing department 1,265 4,705 3,440

BroadcastingPolicy• The Review of Ownership and Control of Broadcasting Services and

Existing Commercial Sound Broadcasting Licences.• Position Paper on Local Television leading to the licensing of SABC 4

and SABC 5.• Discussion Paper on Subscription Broadcasting which will lead to

possible licensing of satellite subscription broadcasting services.• Amendment of South African Content Regulation to rectify certain

discrepancies between Position Paper on “South African Content on Television and Radio” and the Regulations as originally gazetted.

• Position Papers completed under year of review:– Sports Broadcasting Rights– Low Power Broadcasting

• Published Code of Conduct for Broadcasters and technical amendments to the South African Television Content Regulation of 2002.

BroadcastingFuture Policy Project 2004/5• In 2004/5 financial year the department will be focusing

on the following policy projects:– Review of Community Radio Policy.– Review of Signal Distribution.– Ten Year Review of Broadcasting Regulation in South Africa.– Review of advertising and sponsorship rules.– Programming requirements for the disabled and the elderly.

• ICASA throughout its Broadcasting Division monitored the 2004 Election successfully. The Authority monitored 44 502 items throughout the election period. The total data capture error ratio of 0,15% was achieve for the duration of the project.

BroadcastingLicensing• SABC Licence Renewal• ICASA renewed eighteen (18) sound broadcasting services

and three (3) television broadcasting services.• Commercial Sound Broadcasting Services Renewals• Six (6) commercial radio services were renewed which are

YFM, Jacaranda FM, Kaya FM, P4 Cape Town and Classic FM.

• Radio Oranje were granted amendments to their application.

• ICASA approved the Nail Transaction• ICASA completed the process of awarding 4 Year

Community Broadcasting Licences to all nine provinces in South Africa.

BroadcastingOutcomes 2004/5

• Licensing of Subscription Broadcasting Services

• Licensing of Community Services

• Licensing of Low Power Broadcasting

• Renewal of Orbicom Category 2 Signal Distribution

• Proposed amendments to IBA Act

BroadcastingICASA2003/2004 and 2004/2005Funding - Broadcast Services Division


Broadcast Services

Salary and related costs 5,565 8,938 3,373 - General manager's office 608 666 58 - Policy department 1,622 2,067 445 - Licensing department 3,335 6,205 2,870

Project costs 2,194 4,632 2,438 - Policy department 959 1,142 183 - Licensing department 1,235 3,490 2,255

7,759 13,570 5,811

Engineering & TechnologyFrequency Spectrum• Publication of Annual Terrestrial Broadcasting

Frequency Plan• Issue Frequency Spectrum licences to Radio

communications operators (4800 new) (total 89000)

• Review and Migration of SABRE 1 & 2 to new integrated SAFTA

• Participate, contributed to ITU conferences – WRC 2003– Include WRC final acts in SAFTA– RRC planning conference for Digital Broadcasting

• Process Equipment type approvals (±500)

Engineering & TechnologyRegions and Monitoring• Enforce compliance with the relative Act in terms

of spectrum usage and stamp out illegal spectrum usage

• Upgrade measuring equipment to trace and address interference – Install direction finding systems Johannesburg, Cape

Town and Durban– Install DF facilities in Specialised monitoring vehicles

• Contribute to initial RFI measurements in support of SKA bid

• Project Spectra: Implement spectrum management tools

Engineering & TechnologyKey outcomes for 2004/2005• Project Spectra: Improve the management, workflow and

radio frequency coordination and assignment processes• Contribute to further RFI measurements in support of SKA

bid• Enforce compliance with the relative Act in terms of

spectrum usage and stamp out illegal spectrum usage • Conduct 800 MHz Sharing Studies • Spectrum Planning and co-ordination

– Preparing for ITU RRC on Digital Broadcasting– TRASA spectrum planning; L-Band and Digital Broadcasting

• Spectrum Licensing• Monitoring and interference mitigation

Engineering & TechnologyICASA2003/2004 and 2004/2005Funding - Engineering and Technology Division


Engineering and Technology

Salary and related costs 23,927 26,025 2,098 - General manager's office 644 718 74 - Frequency spectrum 10,660 12,045 1,385 - Monitoring and Regions 12,623 13,262 639

Project costs 1,361 3,611 2,250 - Frequency spectrum 1,032 2,618 1,586 - Monitoring and Regions 329 993 664

25,288 29,636 4,348

Overview of Financial Results ICASA2003/2004Overview of financial results

2003/04R'000

Government grants received from DoC 138,350Less: Items reflected in the balance sheet - VAT funding (7,204) - Deferred income - long-term projects (2,748) - Deferred income - capital expenditure (4,444)

Revenue 123,954

Operational costs (112,272)Finance costs (4,677)

Net operating surplus 7,005

Reasons for Surplus

ICASA2003/2004Reason for the surplus

2003/04R'000

Operational Costs 112,272Less: Non-vatable expenditure - Salaries & related expenses (57,932) - Depreciation (4,622)

Vatable expenditure 49,718

VAT paid to suppliersbut not refunded by SARS (49,718 x 14%) 6,961

VAT Funding not ReceivedICASA2003/2004VAT funding not received

2003/04R'000

Total grants received 138,350Less: VAT funding (7,204)

131,146

Output VAT payable - Current year (131,146 x 14%) 18,360 - Prior year 1,303Less: VAT funding (7,204)

Outstanding VAT funding 12,459

Revenue Collection - NRFICASA2002/2003 and 2003/2004Revenue collection on behalf of National Revenue Fund

2002/03 2003/04Actual ActualR'000 R'000

National Revenue Fund

Balance outstanding at beginning of year 10,529 466,031Licence, application and annual fees raised 909,577 955,123 - Broadcasting 21,168 28,323 - Telecommunications 123,992 120,103 - Frequency Spectrum 741,936 806,009 - Interest Received 22,481 688

Total raised on behalf of NRF 920,106 1,421,154Paid to NRF (454,075) (1,380,416)

Outstanding revenue raised to be paid to NRF 466,031 40,738

Overall Lack of FundingICASA2003/2004Overall lack of funding

2003/04 2003/04 2003/04 2003/04Allocation Budget * Shortfall Shortfall

R'000 R'000 R'000 %

Operating Expenditure 67,868 86,593 (18,725) 22%Regulatory Projects 52,257 81,062 (28,805) 36%Capital Projects 11,021 19,505 (8,484) 43%

131,146 187,160 (56,014) 30%

* This budget is a bottom-up, zero and cost centre based budget, substantiated by a detailed strategy and business plan.

Continued Lack of FundingICASA2004/2005Continued lack of funding

2004/05 2004/05 2004/05 2004/05Allocation Budget * Shortfall Shortfall

R'000 R'000 R'000 %

Operating Expenditure 86,654 95,043 (8,389) 9%Regulatory Projects 47,878 85,386 (37,508) 44%Capital Projects 6,415 22,070 (15,655) 71%

140,947 202,499 (61,552) 30%

* This budget is a bottom-up, zero and cost centre based budget, substantiated by a detailed strategy and business plan.

Funding ModelAdequate funding is imperative for an effective and independent

regulatory agency, as it will:

• Allow ICASA to respond to the dynamic regulatory requirements for managed liberalisation;

• Enable ICASA to hire and retain the right people; and minimise risk of failure;

• Prevent regulatory capture and reliance on the industry for critical regulatory data that can influence the Regulator to make decisions reflecting industry interests, rather than decisions based on independent analysis and the public interest; and

• Eliminate obstructions that would prevent ICASA from rendering its decisions based on professional and technocratic expertise.

Funding ModelAdequate funding for our projects has the

following positive impact:

• Broadcasting and Telecommunication are highly sensitive to technological changes, adequate funding will ensure quick responses to new technological advances.

• Deliver on time.

• Ensure retention of good personnel.

• Hire the best skills.

ICASA Staff Turn-Over

ICASA Staff Turn-over 2003/2004

Staff turn-over 10.91 %

% of Resignations From Management Level

43.33%

Management staff turn-over 24.07%

icasa budget briefing to portfolio committee on communications presented by mandla langa...

Documents

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council supportlawicasa

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court decisions

legal department budget

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