USAASA admits broadband, digital migration challenges

Lumko Mtimde, CEO of USAASA.
Lumko Mtimde, CEO of USAASA.

Although the Universal Service and Access Agency of SA (USAASA) received unqualified audit opinion reports from the auditor-general, the state-owned entity has acknowledged it is facing some challenges to roll out broadband and the digital migration project.

This week, USAASA, through chairperson Mawethu Cawe and CEO Lumko Mtimde, presented to the Parliamentary Committee on Telecommunications and Postal Services, the USAASA and Universal Service and Access Fund (USAF) 2016/2017 annual reports.

Over the years, USAASA, which was set up as government's way of bridging the digital divide, has had to fend off allegations of serious maladministration, unlawful conduct and unlawful expenditure.

Universal access

Government established USAASA under the Electronic Communications Act to promote the goals of universal access and universal service in the under-serviced areas of SA.

The agency is also in charge of overseeing SA's multibillion-rand digital TV set-top box (STB) rollout, a project which has also been shrouded in controversy.

Meanwhile, USAF is used as a strategic investment facility to fund the expansion of broadband infrastructure and services in underserved areas and the provisioning of universal access to digital broadcasting by subsidising the acquisition of STBs by poor TV-owning households earning a total income of below R3 200 a month.

USAASA and USAF both received unqualified audit opinion reports from the auditor-general for the year under review.

In a statement, USAASA says it has had many challenges in the year under review with its project delays, management changes and other matters.

However, it points out the appointments of Mtimde and CFO Mahomed Chowan brought about stability and a compliance culture.

"In the year under review, USAF performance has regrettably declined from 67% in 2015-2016 to 33%," says Mtimde. "This is due to a number of factors, including the annual performance plan not adhering to the SMART principles and the broadcasting digital migration (BDM) project delays and suspension of production.

"As a result of the regrettable performance, as set out at year-end, there remains committed and outstanding activities regarding broadband connectivity, necessitating a roll-over funding request of R15.3 million for connectivity and also R528 million for the BDM."

The agency notes this resulted in the successful implementation of USAASA's broadband rollout project for free WiFi in the OR Tambo District Municipality in the Eastern Cape, which was launched by deputy president Cyril Ramaphosa on 7 July.

"USAASA's performance report indicates improvements from the previous financial year, and USAF performance report indicates an unSMART annual performance plan," says Mtimde.

"This has led to regression in respect of performance, and consequence management has been noted as USAASA actions against those involved in non-compliance challenges."

"We look forward to seeing the results of the implemented solutions put in place to enhance the performance of the agency based on the steps taken by the board and management of USAASA to improve internal processes which will ensure better service delivery," Cawe notes.

According to Cawe, it is worth noting that during the 2015-2016 financial year, the procurement processes for the digital terrestrial television and direct-to-home set-top boxes and antennas occurred by the end of the second quarter.

Addressing hiccups

"Challenges aside, the implementation of the BDM programme is in progress. The board is addressing the hiccups as it carries out its fiduciary and oversight responsibilities of this mammoth project. The BDM programme is one of the major contributing factors towards the poor performance outcomes of USAF as the programme is besotted with legal challenges and policy uncertainties."

He adds that the project, even with outer-year funding allocations, remains grossly underfunded. Funding for the project was originally envisaged at 70%, exclusive of antennae and installation, with the remaining 30% expected to come from beneficiaries.

Cawe points out that with the economic downturn and the increased number of indigent households across the country, Cabinet, on the back of public consultation by USAASA, resolved to increase the beneficiation to 100%.

"That meant there was a 30%+ deficit in the funding of the project at the outset. Should the situation remain unresolved, this funding challenge will have a negative impact in the rollout and completion of the BDM project."

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