Millions Unspent in Drive to Bring Poor Online in South Africa


More than R250m that companies have poured into a fund designed to give everyone access to telephony services is gathering dust at the treasury -- while 20,000 schools still lack internet access.

Cash collected from Telkom, cellular operators and other telecoms operators has been sloshing around since 1999, and now a newly overhauled universal services agency is demanding it back. "We need to spend that money now and we want it," said Cassandra Gabriel, chairman of the Universal Service and Access Agency of SA.

The operators pay 0.2% of their annual revenue to the universal services fund, but only a fraction was being reinvested to grow the industry, she said. The agency has received just R195m of R456m collected for the fund so far, leaving R261m in limbo. This year the levy raised R151m, but just R31m was given to the agency to take voice and data services to poor or remote communities.

Now the agency has submitted an R800m wish list, but has been told to expect just R32m of the R180m that the industry will contribute next year. "It's a crying shame that this money gets collected from our industry for the sake of the poor and it's not coming back from the treasury. It's an unfair tax on the industry," Gabriel said.

The agency had asked the Communications Minister and the industry regulator to intervene, and was willing "to placard outside the treasury" if the cash was not forthcoming, she said.

"When they are convinced we can give them a proper plan we will access it, but it's not happening fast enough," she said. Her new management team was determined to do its job, and the government "must fire us" if it objected to them for being outspoken.

The treasury's communications director, Thoraya Pandy, said the levy would be reinvested in the sector, but only when the agency could demonstrate a sound business plan and the ability to execute it. In the past it had struggled to spend its cash or present proper plans. The treasury was willing to allocate the funds if the agency could show that it would use them wisely, Pandy said.

Gabriel and the new CEO, James Theledi, said the agency had to shoulder some blame for its history, with a lack of leadership and an exodus of senior managers. Before a recent overhaul it had no clear budgets and had handled projects on an ad hoc basis.

"We haven't made a huge impact on the digital divide," Theledi said. "Almost 21,000 schools don't have connectivity. We need to change the way the fund has been managed and work with the industry to reach every South African with telephony and connectivity."

The fund can cull up to 1% of operators' annual revenues, which would give it R800m a year with which to increase voice and data services in poor and underserved areas and roll out services to schools and community centres.

Theledi acknowledged that the agency's record was poor. Of SA's 27000 schools, only 7000 had internet access. The agency had funded computer labs for only 234 schools, and just 90 of those had internet access. It wants to open 200 new computer labs a year and take internet access to 3000 schools a year.

Its 154 community telecentres have been equally unsuccessful. Some have no staff with the skill to run them, or the equipment has been stolen.

Business Day