|Africa and the Middle East I 2003
|Mainstreaming SMMEs: Technology as a Tool for Community Development
|Independent Communications Authority of South Africa
Mandla Langa, Chairperson, Independent Communications Authority of South Africa (ICASA), was born in Durban, 1950, and grew up in KwaMashu township. He studied for a BA at the University of Fort Hare. Following activism in the black consciousness movement and subsequent arrest in 1976, he went into exile in Botswana. He has lived in Botswana, Lesotho, Maputo, Angola, where he did MK military training, Zambia, Budapest and London. In 1980 he won the Drum story contest for ‘The Dead Men Who Lost Their Bones’ and in 1991 he was awarded the Arts Council of Great Britain Bursary for creative writing, the first for a South African. He held various ANC posts abroad, such as Cultural Representative in the UK and Western Europe. Langa was a weekly columnist of the Sunday Independent and was the convenor of the Task Group on Government Communications, which was set up by Thabo Mbeki, which resulted in the Government Information and Communication Systems. Three of his works have been published: Tenderness of Blood (Zimbabwe Publishing House, 1987), A Rainbow on a Paper Sky (Kliptown Books, London, 1989), The Naked Song and Other Stories (David Philip Publishers (DPP), Cape Town, 1997). The Memory of Stones, (DPP) is his latest novel. His musical opera, Milestones featured at the Standard Bank Festival in Grahamstown in June 1999. He has been the editor-at-large of Leadership Magazine and the Programme Director for television at the SABC. Langa was appointed by the President, as the first Chairperson of the Independent Communications Authority of South Africa (ICASA). Mandla Langa sits on the boards of the Business and Arts South Africa (BASA), the Foundation for Global Dialogue (FGD), Institute for the Advancement of Journalism (IAJ) and the Rhodes University School for Economic Journalism. He is a trustee of the Nation’s Trust and the South African Screenwriters’ Laboratory (SCRAWL) and serves as the director to Contemporary African Music and Arts (CAMA).
South Africa is developing licensing models to encourage the participation of Small, Micro and Medium enterprises (SMMEs) and Black Economic Empowerment (BEE) Groups in the telecommunications sector. The models, a departure from traditional ways of encouraging telecoms investment and growth, bring real challenges. To stimulate community development, historically marginalised parts of society are being encouraged to participate in the telecoms sector. Regulatory processes are being used to encourage SMMEs to bid for licences to operate telecoms services in under-served regions.
The community in South Africa is a core value and a basic institution of our culture and societies. As such, it makes sense that since 1994 one of the objectives of the South African government, as demonstrated through policy and legislation, has been the promotion of community involvement in the mainstream economy through small business development and the encouragement of entrepreneurial activity. In the communications sector, in specific, while traditionally the approach has been to facilitate development through large corporations and established licencees, recently efforts have been made to use communities themselves to ‘bridge the digital divide’. However, while these efforts are made and telecommunications technologies are developed and touted as ideal solutions for rural or under-developed communities, many of these communities face major socio-economic challenges. These challenges include high unemployment, poverty, physical isolation and poor health. Then, in addition to all this, we throw in the challenges of technology! We talk confidently in our boardrooms, courts, and in the halls of Parliament, about how telecommunications technologies can have a positive and definitive impact on the well being of communities in areas such as education, health, economic development and even governance. ‘E-business’, ‘tele-medicine’ and ‘tele-education’ become buzzwords. We easily imagine the great impact that multimedia applications, videoconferencing, broadband access and even a simple phone line can have on communities. But before such visions can be realised, several hurdles have to be overcome. In South Africa we are attempting to deal with those challenges through the encouragement of the participation of Small, Micro and Medium Enterprises (SMMEs) in the communications sector. “The starting point for the process of small business development has been to create an enabling environment bearing in mind that the SMMEs that are being targeted represent communities which have no telecoms infrastructure, and often lack adequate knowledge, training and funding to take advantage of the technological opportunities that are being created for them.” Major policies designed for the mainstream economy often inadvertently overlook the interests of smaller, less developed communities. Noting this, a number of focused SMME development projects have been initiated since the installation of the democratically elected government in April 1994. Underdeveloped and undeveloped SMMEs were recognised to be a window of opportunity to address the challenges of job creation, economic growth and equity. The starting point for the process of small business development has been to create an enabling environment bearing in mind that the SMMEs that are being targeted represent communities which have no telecoms infrastructure, and often lack adequate knowledge, “South Africa has dealt with this by enacting legislation that is SMME friendly, promoting universal service and access policies, and creating space in the policy and legislative framework for communities – for example, in community radio, telecentres and multi-purpose community centres, under-serviced area licences …” training and funding to take advantage of the technological opportunities that are being created for them by well intentioned policy-makers. South Africa has dealt with this by enacting legislation that is SMME friendly, promoting universal service and access policies, and creating space in the policy and legislative framework for communities – for example, in community radio, telecentres and multi-purpose community centres, under-serviced area licences and even in processes that are generally reserved for the mainstream such as Second National Operator. The Second National Operator We have tried to inject broad-based Black Economic Empowerment (BEE) participation in the licensing of the Second National Operator (SNO) for fixed-line service. This was done through an innovative, split licensing process – broken up into three parts. One part dealt with the strategic equity partner (what was envisaged was a partner with the financial and strategic muscle of the British Telecoms, France Telecoms and AT&T’s of the sector); one part was set aside for the state-owned entities (Eskom and Transnet traditionally involved in the transport and electricity sectors, but identified due to the obvious synergies between the sectors); and the last set aside was for a BEE Group. This model is a new one and has encouraged SMMEs and in particular Black South Africans to think about opportunities in the sector. The regulator received seven quality bids from BEE consortia, which provides proof that the interest is there, the skills are there, but what is lacking are the opportunities for meaningful participation in the sector. Under-Serviced Area Licences Another process that South Africa is about to embark upon, in April this year, is the granting of Under-Serviced Area Licences (USALs). These licencees will provide service in underserved areas, historically marginalised with respect to the provision of fixed-line telecoms service, with a tele-density of less than 5 per cent. SMMEs will be given licences so that they can develop innovative products and processes that will in turn increase economic growth, create high-quality jobs and support sustainable development to the benefit of communities across South Africa. While the business case in these areas has yet to be proven, it will nonetheless be enhanced by the fact that these USAL licencees will, unlike any other licencees in the South African sector, be able to provide services using any technology – there are no restrictions on the USAL’s technological choice. This will be an interesting space to watch to determine what the impact of technology on development can be. USALs will have the option of looking at setting up and maintaining voice and data access through, fixed, fixed-mobile, Voice over IP, broadband and any new technologies not yet off of the drawing board. While this sounds great on paper, and makes for very innovative and progressive legislation, the challenge lies in the implementation of the policies and legislation encouraging such licences. USALs will undoubtedly be faced with several challenges. Not only will they have to get past the first challenge which is winning the licences (which implies that they have gained enough knowledge of the sector to analyse both the market and the technical requirements so they can prepare a good bid, backed with solid business and technical plans), but they will then have to either roll out a network, or find another innovative means of bringing access to their communities. They will have to enter into a market dominated by Telkom SA and three mobile operators, secure adequate funding to develop networks to serve their communities, gain sufficient knowledge to enter into facilities leasing agreements with the existing operators, negotiate favourable interconnection termination rates with them, and set up involved billing systems; a tall order to say the least. The opportunity that they are being offered will come at a substantial cost – both in human and financial resources. They will have to master the regulator, who although it will be behind them, has the responsibility of serving customers and other investors as well. It is not a small task. The USAL opportunity is a great opportunity for SMMEs and as a regulator in the sector, ICASA will try to create a framework to ensure that the benefits accrued from the licences for the SMMEs and the communities that they will service, will outweigh the costs. Noting that market forces alone will not be able to supply the infrastructure required to deploy broadband, or even basic voice, to all rural and remote parts of the country, USALs will have a supportive regulator behind them, but from there on, they are on their own and there lies the challenge. “While the business case in these areas has yet to be proven, it will nonetheless be enhanced by the fact that these USAL licencees will, unlike any other licencees in the South African sector, be able to provide services using any technology – there are no restrictions on the USAL’s technological choice.” If it works, we will have created a model of empowerment from within. It will mean that we have successfully tackled the challenges of technology and the associated challenges of funding, language, education and training. This plan has the potential to become a model for the use of telecommunications applications to encourage community development and SMME growth. If so, it will be a bright light in the South African telecoms sector which does not yet truly know the benefits of competition and is characterised by a de facto monopoly in the fixed-line business and cautious investors. Most importantly, if it works the USAL model may take talk of access to broadband out of academia and into communities. “Through SMME involvement in the roll out of telecoms infrastructure, it is hoped that some of the challenges faced in the past by communities with regard to the applicability and availability of technologies, will be addressed.” Conclusions It goes without saying that communications is a critical tool to encourage socio-economic development. Its success however, will depend upon whether technology is imposed on communities, as has been the case with many unsuccessful telecentres, or whether it is encouraged from within the community to address the community’s needs. Through SMME involvement in the roll out of telecoms infrastructure, it is hoped that some of the challenges faced in the past by communities with regard to the applicability and availability of technologies, will be addressed. We have a few attempts at trying to address rollout in rural and under-serviced areas behind us – so we are not walking into this blindly. However, South Africa has only recently embarked on the national policy of managed liberalisation. South Africa is still at the early stages of experimenting with ways of using SMMEs in the ICT sector to encourage the development of its own communities. Due to the positive impact these initiatives will have on encouraging investment, job-creation and improving access to education and healthcare, ultimately, if we succeed, the impact will be not only on the communities, but also on the economy as a whole.