South Africas International and National Competitiveness 3 4

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

How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA 1994 – 2015 Milestones [ Fixed Market] SOOG 1 one fixed line operator • Before 1994: only • Less than 4 million lines in operation Prote ct Consumers Promote • 4 mobile operators covering more than 99% of the population efficient use* SOOG 2 Promote of spectrum • Over 100 fixed line service providers consumer rights and • Fixed line use has stagnated numbering * Promote Ensure universal resourc N Competition service and es access Promote the * Remove * SOOG 3 Digital Agenda bottlenecks to • 2015: SOOG 4 * Facilitate nationwide broadband penetration by 2020 * Promote the development of public, community and commercial br oadcasting services in the Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector 2

How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA • South Africa has moved from 2 Mobile Network Operators (Telecommunications Act) 4 MNOs by 2012 1994 – 2014 Milestones [Mobile] SOOG 1 where the limit is governed by available spectrum • (ECA), 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 • • Universal Service: 2014? • 99% population Universal Service: coverage for mobile voice services 2 subscribers Estimated 60 million SOOG unique SIM 48 th in the world according to the WEF • 99% population coverage for mobile voice services Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access N • Demand for data exploding: Promote the * Remove * • 80% growth for Vodacom in 2014 SOOG 3 Digital Agenda bottlenecks to Establish competition * • Forecast mobile data growth at a compound annual innovative Facilitate nationapproaches to * Ensure rate of 53% by 2018 (Cisco). wide broadband technology usage • 48 in the world according to the WEF South African th • • • penetration by 2020 retail prices of * Support ICT services thefairly rapid uptake Termination • Down from rates: R 1. 25 in. SOOG 2009 to R 0. 20 in 2014 – 84% reduction reflect costs * 4 of the new ICT Promote the Down from R 1. 25 in 2009 to R 0. 20 in 2014 – 84% reduction technologies * Ensure Retail prices: development of effective Retail prices: • 2002: public, HDI/BEE community and • 2015: 2005: Approx. R 3. 20 participation in commercial the sector 2014: Approx. R 0. 60 (reduction of 81%) br oadcasting services in the • Termination rates: 3

How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA 1994 – 2014 Milestones [ Broadcasting ] 1994: SOOG 1 • one free to air broadcaster (SABC) • One subscription service (Mnet) • Limited commercial & radio stations SOOG 2 2015: N * Remove * bottlenecks to Establish competition * innovative Facilitate nationapproaches to * Ensure wide broadband technology usage South African penetration by retail prices of * Support 2020 ICT services thefairly rapid uptake reflect costs * of the new ICT Promote the technologies * Ensure development of effective HDI/BEE (Radio)public, licensees, there are 12 Broadcasting community and whilst participation in commercial the sector br oadcasting services in the SOOG 3 SOOG 4 • A total of 255 Broadcasting Sound Promote the Digital Agenda Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access Television licensees. 4

How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA International infrastructure SOOG 1 1994: 1 cable Telkom controlled 2015: 6 cables multiple owners SOOG 2 N SOOG 3 SOOG 4 Promote the Digital Agenda * Facilitate nationwide broadband penetration by 2020 * Promote the development of public, community and commercial br oadcasting services in the Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access * Remove * bottlenecks to Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector 5

How far have we come? Strategic Outcome Oriented Goals (SOOGs) of ICASA 2015 Local Infrastructure: 1 • National. SOOG connectivity: • • Telkom: 140, 000 km Neotel/BBInfraco: 10, 000 km SOOG 2 Fibreco: approx. 2, 000 km Vodacom/MTN/Neotel: N 5, 000 km • Local Access SOOG 3 Promote the Digital Agenda * Facilitate nationwide broadband penetration by 2020 Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access * Remove * bottlenecks to Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector • Fixed Line: approx. 4 million copper lines fixed wireless in major centres * • Mobile: SOOG 4 Promote the development of public, community and commercial br oadcasting services in the 6

International competitiveness Strategic Outcome Oriented Goals (SOOGs) of ICASA Where does South Africa stand: So SOOG 1 SOOG 2 Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access * Remove * bottlenecks to Establish N competition innovative Promote the approaches to * Ensure Digital Agenda technology usage South African * retail prices of * Support Facilitate nation. ICT services thefairly rapid uptake wide broadband reflect costs SOOG 4 of the new ICT penetration by ICTs are the driver of GDP in the future technologies * Ensure 2020 rd effective SA GDP ranking is 33 in the world * HDI/BEE Promoteand the enable This will fall if we are unable to leverage internet participation in deployment development of the sector public, community and c SOOG 3 and use 7

Internet competitiveness Strategic Outcome Oriented Goals (SOOGs) of ICASA • SA is ranked 58 th of 117 countries by OOKLA • SA has lowest top. SOOG city high 1 speed connection speed of BRICS nations • SA is ranked 73 rd according to WEF SOOG 2 N SOOG 3 SOOG 4 Promote the Digital Agenda * Facilitate nationwide broadband penetration by 2020 * Promote the development of public, community and commercial br oadcasting services in the Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access * Remove * bottlenecks to Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector 8

Contribution to employment Strategic Outcome Oriented Goals (SOOGs) of ICASA • Total of 32 445 employees (June 2014) 1994 – 2014 Milestones [Mobile] • SOOG 1 South Africa has moved from 2 Mobile Network Operators (Telecommunications 4 MNOs 2012 (ECA), whereis thefemale limit is governed by available spectrum • Act)36% ofbyworkforce • The mobile data market is a growing market, with growth rate reported at XXX % in 2014? • Universal Service: • SOOG 2 99% population coverage for mobile voice services N SOOG 3 • 48 th in the world according to the WEF • Termination rates: Promote the Digital Agenda * Facilitate nationwide broadband penetration by 2020 • Down from R 1. 25 in. SOOG 2009 to R 0. 20 4 in 2014 – 84% reduction* • Retail prices: • 2002: • 2015: Promote the development of public, community and commercial br oadcasting services in the Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access * Remove * bottlenecks to Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector 9

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

Constraints Strategic Outcome Oriented Goals (SOOGs) of ICASA • Human capital and innovation • Shortage. SOOG of engineers and skilled workers 1 Prote • Power supply ct Consumers Promote • Current mobile retail prices are dependent on current electricity prices and supply efficient use* SOOG 2 Promote from Eskom of spectrum consumer rights and • Forced use of generators will increase costs * N Promote the numbering Promote Ensure universal resourc Competition service and es access * Remove * • Spectrum delays in Digital Migration policy and Policy on High Demand spectrum Agenda SOOG 3 Digital bottlenecks to * Facilitate nationwide broadband penetration by 2020 Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector • Rights of Way – municipalities prevent licensees from deploying infrastructure * • Regulatory delays. SOOG – lack 4 of funding and adequate technical skills leads to long lead. Promote the development of public, community and commercial br oadcasting services in the times and reliance on consultants to conclude regulation-making 11

Opportunities Strategic Outcome Oriented Goals (SOOGs) of ICASA Network deployment: SOOG 1 • Rights of Way – constitutional court recently ruled in licensees’ favour on the right to access and deploy infrastructure Prote ct Consumers Promote Job creation: efficient use* 2 • Construction and. SOOG electro-technical skills in deployment of networks Promote of spectrum consumer rights • High demand for: and numbering * Promote • Technical skills for repair and maintenance of networks Ensure universal resourc N Competition service and • “low current” electrical as well Promote as spectrum management es accessengineers the * Remove * SOOG 3 Digital Agenda bottlenecks to Establish competition * innovative South Africa could drive regional internet penetration and global access to the internet with Facilitate nationapproaches to * Ensure partnerships with our neighbours: wide broadband technology usage South African penetration by retail prices of * Support • Cost-based access to under-sea 2020 cables ICT services fairly the rapid uptake • Cost-based SOOG access to 4 long-distance backhaul services reflect costs * of the new ICT Promote the development of public, community and commercial br oadcasting services in the technologies * Ensure effective HDI/BEE participation in the sector 12

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 SOOG • Broadband Internet 4 G 2 • Release of spectrum • Fast-track digital migration • Subsidise digital televisions • remove encryption SOOG 3 • Resolve funding challenges for: • ICASA • SABC • SAPO SOOG 4 N Promote the Digital Agenda * Facilitate nationwide broadband penetration by 2020 * Promote the development of public, community and commercial br oadcasting services in the Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access * Remove * bottlenecks to Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector 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 SOOG • Broadband Internet 4 G 2 • Release of spectrum • Fast-track digital migration • Subsidise digital televisions • remove encryption SOOG 3 • Resolve funding challenges for: • ICASA • SABC • SAPO SOOG 4 N Promote the Digital Agenda * Facilitate nationwide broadband penetration by 2020 * Promote the development of public, community and commercial br oadcasting services in the Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access * Remove * bottlenecks to Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector 14

Strategic Outcome Oriented Goals (SOOGs) of ICASA SOOG 1 SOOG 2 Prote ct Consumers Promote efficient use* Promote of spectrum consumer rights and numbering * Promote Ensure universal resourc Competition service and es access THANK YOU N SOOG 3 SOOG 4 Promote the Digital Agenda * Facilitate nationwide broadband penetration by 2020 * Promote the development of public, community and commercial br oadcasting services in the * Remove * bottlenecks to Establish competition innovative approaches to * Ensure technology usage South African retail prices of * Support ICT services thefairly rapid uptake reflect costs of the new ICT technologies * Ensure effective HDI/BEE participation in the sector 15