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Fresh attacks on Mboweni’s ICT economic blueprint

Read time 4min 50sec
Finance minister Tito Mboweni.
Finance minister Tito Mboweni.

Finance minister Tito Mboweni’s economic blueprint to reignite SA’s competitiveness has once again come under fire from the local ICT industry.

This time, the criticism comes from lobby group, the Progressive Blacks in ICT (PBICT), which is charging that the document is out of touch with the realities being faced by small, medium and micro enterprises (SMMEs) in their quest to access high-demand spectrum.

Last month, Mboweni called on members of the public to comment on a published paper, titled “Economic transformation, inclusive growth and competitiveness: Towards an economic strategy for South Africa”.

In the paper, National Treasury published proposals to boost the South African economy by an additional 2.3 percentage points above forecast over the next decade and create at least one million jobs.

The ICT sector is among the industries the National Treasury believes has the ability to fire up the economy.

WOAN contradictions

On the thorny issue of spectrum, the paper seemingly contradicts the Department of Communications and Digital Technologies’ recently released policy and policy direction for the licensing of high-demand spectrum, paving the way for wholesale open access network (WOAN) licensing.

In the policy document, communications minister Stella Ndabeni-Abrahams directs that a portion of unallocated high-demand spectrum must first be assigned to a network category of licensees, known as WOAN, and the remainder must then be assigned to other eligible licensees.

On the other hand, Treasury said spectrum should be allocated through an auction, with provisions for effective rivals, conditions for universal service and access, and a small set-aside for a WOAN.

The PBICT says the article and plan issued by National Treasury is out of touch with the reality faced by SMMEs today.

“In our opinion, the plan contradicts the very essence of what stakeholders such as ourselves and the minister of communications and digital technologies have been working towards,” says Leon Rolls, president of the PBICT, which represents over 2 000 members in SA.

The PBICT is not the first in the ICT industry to slam the Treasury document. Telkom group CEO Sipho Maseko recently wrote an opinion piece in the Sunday Times, blasting National Treasury’s view of the country’s telecommunications and ICT sectors as “incoherent, ill-thought-out and ultimately chaotic”.

According to reports, the document has also put Mboweni on a collision course with Cabinet colleagues, ruling party members and trade unions because of some conflicting interests.

Taking sides

On the spectrum allocation, the PBICT says it supports minister of communications and digital technologies Ndabeni-Abrahams.

“As representatives of different SMMEs and entrepreneurship organisations, our position is clear – access and ownership of WOAN is critical to an inclusive economy in this fourth industrial world,” says Rolls.

“We want to see the scale tilt correctly to fairly include black people, women, youth and people with disabilities. We activate the call on all those in the telecoms industry of our ICT sector to join us in ensuring we are drivers and not passengers of the WOAN and ultimately IOT [Internet of things].

“We further call on the all government departments and the nation at large to join us in calling for the WOAN being given an allocation of spectrum that will give it 60% of the market share.”

According to Rolls, the mobile network operators were given free spectrum to ensure all South Africans are connected at affordable rates but this did not happen.

“It is time for us to give this opportunity to youth, women and black SMMEs to build community-based networks under one umbrella – the WOAN. We believe this is the only way to drop the cost of data whilst stimulating the economy and giving access to the trillions of rands of new revenue generated through the value-add services of just being connected.”

Industry 4.0 snub

He adds it is saddening to see there is little mention of the fourth industrial revolution in the economic blueprint.

“We also do not see how Treasury is planning to deal with the transversal tenders that are the biggest gatekeepers of opportunities for SMMEs and create monopolies, namely MSCOA, Oracle, Vodacom, Microsoft, etc.

“The private sector refuses to get on the transformation agenda, even those large corporates that deal with government. We propose an introduction of new policies that force the private sector to adhere to the minimum spend on black SMMEs. We further propose an increase from minimum 30% to 60% on black SMME spend across all sectors.”

Rolls also urges Treasury to establish a digital fund that must be set aside for supporting the development, production and commercialisation of technology.

He notes this fund must be serviced by allocating R1 of every R100 spent on technology to the digital fund, as well as a percent of revenues generated by telcos.

The long tender processes and the current bid adjudication processes must be reviewed as they are open to colluding and corruption, Rolls adds.

“We propose having a dedicated bid office in every department to process bids as they close. WOAN offers massive connectivity opportunity, which if used correctly can completely change access to services and communication within the country and must be seen as a developmental tool that is critical to achieving our vision within the National Development Plan,” he concludes.

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