Dear government, some clarity please

Operators and investors want certainty in the environments in which they operate. Government’s decision to split the department of communications, without providing clarity behind the move, is not providing this. By Denis Smit.

Denis-Smit-180On 25 May, President Jacob Zuma announced the cabinet for his second term. In a surprise movement, the announcement included significant changes in the role of the department of communications and the creation of a new ministry of telecommunications and postal services.

This has resulted in enormous confusion, and now trepidation exists in the South African ICT sector in the wake of these changes. But government can mitigate these concerns if it clarifies each department’s role and explains its reasons for splitting, rather than further consolidating, the communications portfolio.

Under the new dispensation, the department of communications will now have the SABC, GCIS (Government Communication and Information System) and Brand South Africa reporting into it, while the new department of telecommunications and postal services — headed by former state security minister, Siyabonga Cwele — will be responsible for telecoms and the Post Office.

One of the key concerns is that the new departments introduce the potential for conflicting mandates. Further, the departments have to interact with one another, which creates an intergovernmental liaison challenge and may affect the speed of decision making within them, while also making it more complicated for entities wanting to work with government, which will now need to navigate the complexities of two departments instead of one.

Though regulator Icasa was originally meant to fall under the department of communications, it looks likely that it will report to telecoms and postal services instead. This remains speculation only as no official communication has been made. While the proposed move is a sensible one given Icasa’s mandate, the uncertainty around regulatory agency does little to inspire confidence for existing industry players or would-be investors.

While it was hoped Zuma’s state-of-the-nation address three weeks after the initial announcement would provide clarity on the new departments, it failed to do so. But it is anticipated that government will shortly provide more clarity on the different mandates.

It’s not just the uncertainty that unnerves the sector, but the potential legal implications of the split. As it stands, for example, the Electronic Communications Act states that Icasa must make representations to the minister of communications, but it’s unclear which minister that now refers to or whether it refers to both.

Concerns around issues of coordination are justified. The communications ministry did not operate in isolation, but had ties to the department of public enterprises with Broadband Infraco, the State IT Agency, the department of public service and administration and even roads agency Sanral.

At the same time, public schools and clinics are run through the individual provinces, each of which has its own sets of legislation that must be complied with. Industry worries that the added confusion that splitting the communications portfolio has introduced may result in greater delays to essential infrastructure and service projects.

There is also an enormous administrative cost to consider when making changes to the regulatory environment. The question industry is asking is whether government has fully considered and understood the role of the communications department and the impact splitting it might have?

Particularly worrisome for some are those issues that haven’t been addressed, or even mentioned, like the move to digital terrestrial television, which is already many years behind schedule. Which department will lead this critical initiative? Lack of progress here will have long-term implications in freeing up vitally needed “digital dividend” spectrum, which will be especially useful in providing broadband in rural areas.

Operators and investors want regulatory certainty in the environments in which they operate; government’s latest move and its lack of clarity around the reasons for it offer entirely the opposite.

President Jacob Zuma's decision to split the department of communications has led to enormous uncertainty in the ICT sector

President Jacob Zuma’s decision to split the department of communications has led to enormous uncertainty in the ICT sector

Moreover, under the previous communications minister, government initiated a yearlong ICT green- and whitepaper review process to look at role of individual agencies and the structure of the sector. This review process didn’t anticipate or account for two communications ministries but in fact advanced the concept of an ICT ecosystem with greater, not lesser, convergence. What will happen to this process?

That’s not to say the government is necessarily mistaken in splitting the communications portfolio. It may well have excellent and pragmatic reasons for doing so, but without elucidating its motivation and explaining what it hopes to achieve with the move, industry uncertainty and trepidation is unavoidable.

Splitting the ministries makes it more difficult for industry but certainly not impossible. It is anticipated that as greater clarity emerges, industry will adapt quickly to the split and it will recommence business as usual.

Only government can alleviate the sector’s doubts – it should do so sooner rather than later.

  • Denis Smit is MD at BMI-TechKnowledge, a specialist ICT research and consultancy firm

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