Though he’s been widely praised for firing two of his ministers this week, President Jacob Zuma’s cabinet reshuffle has ruffled the technology industry. There are fears that redeploying communications minister Roy Padayachie will delay crucial projects.
Padayachie, in the job for only a year, was about to make several key decisions that were to have a dramatic impact on SA’s broadcasting and telecommunications industries for many years to come.
The first of these relates to the long-delayed migration from analogue to digital terrestrial television. Migration, a complex project, is set to shake up the broadcasting industry, introducing multichannel free-to-air offerings and potentially paving the way for new competitors in the industry.
More importantly, it will move broadcasters out of a big chunk of spectrum below 900MHz that could finally pave the way for next-generation wireless broadband services to be offered in areas that until now have not been economically viable for operators. How that spectrum is licensed has huge economic implications.
Padayachie was also said to be lobbying his cabinet colleagues to support KT Corp’s bid to buy 20% of Telkom. KT, formerly Korea Telecom, is one of the world’s leading providers of fibre-to-the-home broadband and the deal, if it happens, will result in the further partial privatisation of Telkom. It would undoubtedly be beneficial to the fixed-line operator as it struggles to redefine itself in a much more competitive industry.
The minister was also pushing a plan to make it easier for private operators to deploy infrastructure. And, of course, there’s the big local-loop unbundling intervention, giving Telkom’s rivals access to its last mile of copper-cable infrastructure, which Padayachie was pushing hard for.
The minister is well respected among industry players for being pragmatic and consultative and generally trusting of the free market, so his redeployment is a blow to the sector. That Zuma also moved Padayachie’s deputy, Obed Bapela, out of the department is an additional worry. As one analyst put it, the department has been “decapitated ” at a crucial juncture.
The question has to be asked as to whether the Zuma administration understands the crucial role that technology can play in economic development and job creation. Various studies around the world have shown there is a direct correlation between broadband penetration and economic growth.
Attention will show shift to Padayachie’s successor, Dina Pule, who, despite being deputy to the former communications minister, the free-spending Siphiwe Nyanda (who was sacked by Zuma last year), is something of an unknown quantity. Granted, she was never going to have the chance to shine under a strong-willed minister like Nyanda.
But she must prove she can move fast on the big issues confronting the sector. The industry can’t afford months of delays while she familiarises herself with all the changes that have happened in the past year.
Pule ’s new deputy, Stella Ndabeni, an ANC MP, appears to have no experience in telecoms. The only constant in the department, then, is Rosey Sekese, the director-general, but she’s been in the post formally for only a few months.
The best approach Pule can take is to continue to remove the roadblocks in the way of the private sector, making it easier to invest by cutting red tape and crafting policies that encourage liberalisation and competition.
After all, it’s the private sector, and not government and state-owned enterprises, that will build next-generation broadband networks, drive innovation and ultimately deliver jobs.
Let’s hope she sees things that way.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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