USA Corporate Plan and Budget for the Period 2006-2007 Presentation to the Portfolio Committee on Communications 7 March 2006

Vision To be the leading organization in the strive to promote universal service and universal access to Information and Communication Technology in South Africa

Mission The mission of the Universal Service Agency is to efficiently and effectively: Encourage, facilitate and offer guidance in respect of any scheme to provide universal access or universal service; Foster the adoption and use of new methods of attaining universal access and universal service; Stimulate public awareness of the benefits of ICT services; Conduct research and surveys into and keep abreast of developments in the Republic and elsewhere on ICT; and Provide the Minister and ICASA with recommendations in relation to policy on any matter relating to universal access and/or universal service.

Introduction Our Presentation Deals with the following: Strategic Objectives. The Focus Areas of the Agency in 2006 -2007 The USA and USF Budgets for 2006 - 2007 The Challenges and Opportunities

Strategic Objectives Strengthening the strategic and operational capacity of the Agency to manage the USF. Application of USF for payment of subsidies. Conducting research and advising the Minister on Universal Service and Access to ICT. Promotion of Universal Service and Access. Building ICT capacity in the under serviced areas.

Overview of Past 3 Years Over the past 3 Years the Agency has deployed 135 Telecentres and 224 e-school Cyberlabs.

Focus Areas: 2006- 2007 Deploy ICT access facilities in under-serviced areas Building capacity in under-serviced areas for the optimal utilisation of ICT Promoting the principle of universal service and access to all stakeholders in the ICT industry Research to advise the Minister on universal service and access Subsidies for USALS Transitional Arrangements for Electronic Communication Act

Deploy ICT Access Facilities Multi-purpose Community Centre Telecentres (MPCC) Community Telecentre E-School Cyberlabs ICT Telecontainers (Telecentres and Cyberlabs) Community Digital Hubs Multimedia Upgrade FY2005/6 (Actual) FY2006/7 (Estimate) FY2007/8 FY2008/9 MPCC 20 32 25 Community Telecentre 36 35 45 E-School Cyberlabs 146 208 376 Community Digital Hubs 3 Multimedia Upgrade n/a 33 63 73

Subsidisation of Telecommunications Licensees A subsidy paid directly to USALs for the establishment of telecommunications infrastructure payable in instalments of R5million over a three year period, totaling R15m. FY2005/6 (Actual) FY2006/7 (Estimate) FY2007/8 FY2008/9 USAL 7 21 20

CAPACITY BUILDING E-readiness Training Programme Community e-Readiness Teachers and students e-Readiness ICT Learnerships for Technical Support Collaboration with public and private sector stakeholders deploy ICT technical graduates in the rural telecentres and e-school cyberlabs Developing Community websites in the under serviced areas. Providing email addresses to high school students and teachers in the rural nodes.

Promote Universal Service and Access The Agency participates directly in the promotion of ICT by subsidising launches, conferences, media activities and publications to stimulate public awareness of the benefits of ICT services.

Research and Monitoring Previous Year’s Research: Research to determine categories of the needy and on ICT penetration and utilisation was conducted during the 2005/6 financial year. Alternative ICT Technologies: Research on alternative available ICT technologies to achieve the goal of universal service and access is ongoing in order to find and evaluate technologies that will be instrumental in attaining this end. Broadcasting Service and Access: Research on the definition of universal service and access in terms of the broadcasting environment will be instrumental in implementing the Electronic Communication legislation in the Agency once the bill has been promulgated. Monitoring and Evaluating: Monitoring and evaluating the subsidisation activities of the Agency is an ongoing project.

Alignment with National Government Programme of Action National Government Focus Areas USA Programmes 1. Increasing Competitiveness in the South African Economy E-school cyberlabs ICTs to contribute to achieving the objectives of increasing the number of maths and science graduates in schools. Research on and Promotion of: Universal Service and Access to ICT’s in SA 2. Achieving higher level of investment in the south African economy Under Serviced Area Licensees subsidization Telecommunications Licensees subsidization for connectivity 3. Broadening participation of historically disadvantaged people in the second economy Community Digital Hubs To support Cooperatives. What challenges do they have and how can ICT assist in overcoming them. To support Youth Services through e-Cadres and community E-Readiness Programme 4. Capacity of the state to deliver on its mandates Project Consolidate MPCC Telecentres to introduce modern ICT ‘s in the development nodes

Required Budget for USF Category FY2006/7 R'000 FY2007/8 FY2008/9 New projects 41,565 124,007 197,932 Maintenance 31,068 40,525 66,539 Subsidise USALs 95,625 71,750 Total 168,258 236,282 336,221

Appropriated USF Budget Category FY2006/7 R'000 FY2007/8 FY2008/9 Appropriated Budget 31,164 32,722 34,581

Financial Resources FY2002/3 R’000 FY2003/4 FY2004/5 FY2005/6 FY2006/7 Appropriated budget in terms of MTEF 23,679 24,745 26,230 29,247 31,164 Expenditure 2,346 29,800 57,873 92,493 169,214 Accumulated surplus 86,449 88,328 61,268 1,156 ?

Budget USA FY 2005/6 (Actual) R’000 FY2006/7 (Budget) FY2007/8 FY2008/9 Universal Service Agency Operating Budget 17,379 19,166 20,078 21,174 Universal Service Agency Capital Budget 121 934 1,027 1,130 Total Appropriated Budget for USA 17,500 20,100 21,105 22,304 Percentage Increase 10% 15% 5% 6% Universal Service Fund 92,493 169,214 236,287 336,226 60% 83% 40% 42%

Universal Service Agency The budget does not meet all the Agency’s operational requirements, thus presenting a number of financial challenges: The Agency’s assets have reached the end of their economic life. The IT systems of the Agency are inadequate for supporting operations. Accommodation does not complement its operations, because the location is not sufficiently accessible to stakeholders. The Electronic Communication Legislation will require business processes reengineering of the Agency. Approximately 80% of the Agency employees’ contracts will expire at the end of November 2006.   FY2003/4 (Audited) R’000 FY2004/5 (Audited) FY2005/6 (Estimated) USA Expenditure 14,211 15,884 17,500 USF Expenditure 29,800 57,873 92,493 Efficiency 32% 22% 16%

USA Organisational Structure

Thank You http://www.usa.org.za/ sgulube@usa.org.za 011-877-6600 Website Address: http://www.usa.org.za/ E-mail: sgulube@usa.org.za Phone: 011-877-6600