Payoffs from huge investment required may be slow in coming, but the benefits are undoubtedly worth it
06 July 2021 - 19:22
byCharley Lewis
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The ICT sector is not an overall employment creator on its own, barring a few niche areas. Rather, it acts to displace jobs, shifting the profile of employment away from low-skilled, information-sparse jobs that are susceptible to automation and artificial intelligence (AI), towards high-skilled work, requiring digital skills.
Moreover, the turnaround time between investment and payback in ICT typically is a medium-term cycle, with lags between interventions and outcomes in the order of 12–24 months. So, while urgent action is required, the payoffs may be slower in coming. Nevertheless, intensifying the role of ICT in the economy does increase competitiveness and promote economic growth, leading to employment creation across a wide range of economic sectors where it is deployed or underpins business processes. Numerous studies have shown that the rollout of ICT and broadband infrastructure and services has a substantial positive impact on economic growth and employment.
Policy interventions for ICT need to focus on strengthening and enabling its role in SA’s economy, and across broader society, to promote economic growth, job creation, and livelihood support, as well as social development and service delivery, including via e-government, online education, e-health, and cultural enrichment.
Further, addressing the divide between the country’s digitally connected minority and the disconnected majority — a digital donga harshly exposed by Covid-19 — is key for inclusive post-pandemic recovery.
Several suggested interventions for the ICT sector now follow. A number of these may already be the object of implementation; others may be in the pipeline. They nevertheless remain key to a revitalised ICT sector. For this purpose, let us only focus on the short-term interventions.
Ensure access to spectrum. Lack of access to high-demand spectrum is one of the main bottlenecks for development. It is imperative that the current litigation impasse holding back the Independent Communications Authority of SA’s (Icasa) spectrum auction be resolved as a matter of urgency. The assignment of temporary Covid-19 spectrum in the same prime bands has already made an impact on current licensee service offerings and profitability. Permanent spectrum assignment via the auction will provide greater market certainty, enable permanent infrastructure planning and rollout, and facilitate the provision of services — including 5G offerings — that will support economic growth and provide services for citizens. A successful spectrum auction will also raise revenue for the fiscus (provided that the trap of focusing on profit maximisation is avoided).
Future IMT/5G/Wi-Fi spectrum planning, allocation and assignment. Beyond the planned auction, and ahead of the 2023 World Radio Conference, demand for additional spectrum, particularly for International Mobile Telecommunications (IMT)) services — in low, medium and high bands, as well as for Wi-Fi — is expected to continue to intensify. Once again, the impact of making such spectrum available is likely to be substantial and lasting on economic growth, job creation and service delivery. Icasa’s spectrum auction therefore needs to be followed by a road map and allocating additional bands for ICT services, including the 2,300MHz and 6GHz bands.
Rapid deployment. Licensees and stakeholders continually raise problems with securing wayleaves for the deployment of ICT infrastructure as a bottleneck to the rollout of infrastructure. The current process is fragmented, costly, and causes major delays. A clear set of policies, guidelines and regulations to facilitate the expeditious deployment of both fixed and wireless networks and related infrastructure is long overdue — it was first set out in legislation as a requirement some 17 years ago. What is urgently required is a single, online, nationwide one-stop procedure and interface, with a single set of requirements, standardised pricing and an expedited process.
Open-access regulation. The ability for competing providers to share infrastructure — such as ducts and poles, trenches and towers — is critical in speeding up network rollout and reducing the cost of deployment, particularly when it comes to under-serviced or remote areas. The regulatory framework governing the leasing by one operator of facilities owned by another has proven ineffectual and hence is underutilised. Additional regulatory intervention designed to strengthen the facilities leasing regime, and to incentivise both passive and active infrastructure sharing between licensees, would have a substantial impact on infrastructure deployment.
Market diversification. Icasa and the Competition Commission have shown the ICT market to be highly concentrated, with dominance enjoyed by a few big providers in various market segments. This is detrimental on several counts: pricing and affordability of services, customer focus and responsiveness, dynamism and innovation. It is therefore important that steps be taken to encourage new entrants, existing and new services. And the forthcoming licensing of the Wholesale Open Access Network provider, now that it has been adopted as a policy objective, needs to be structured and supported to ensure a workable business case and to make an impact on ICT service delivery.
Address the digital divide. As previously noted, SA’s digital divide has a substantially negative impact on the lives and livelihoods of its citizens, particularly those in poor and rural areas and those historically disadvantaged. Any strategy intended to promote economic growth and create jobs needs to consider these disparities and redress them. There are several measures that should be supported in this regard. These include investment in labour-intensive infrastructure rollout, such as fibre trenching and tower construction, in support of a revised and revitalised SA Connect initiative; the awarding of licences for community networks and TV White Space providers; incentives (including financial rewards) to promote ICT platforms for social service delivery, such as the payment of social grants; further interventions to lower the cost of data, the provision of subsidised lifeline access and data for the recipients of social grants; and the reduction of excise duties on entry-level PCs,laptops,tablets and smartphones.
Promote regulatory dialogue. Many of the regulatory authorities in SA deal with issues and interventions that affect ICT service providers, users and consumers either directly or indirectly. Besides Icasa, these include the Competition Commission, the Information Regulator, the Consumer Commission, the .ZA Domain Name Authority, the Film & Publications Board, and the Financial Sector Conduct Authority. It is therefore be important to establish a regular forum for these regulators, which will serve as a unified platform to discuss common issues, develop common or joint approaches to the various challenges they face, and to identify and implement appropriate solutions.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
SA’s ICT sector urgently needs a backbone
Payoffs from huge investment required may be slow in coming, but the benefits are undoubtedly worth it
The ICT sector is not an overall employment creator on its own, barring a few niche areas. Rather, it acts to displace jobs, shifting the profile of employment away from low-skilled, information-sparse jobs that are susceptible to automation and artificial intelligence (AI), towards high-skilled work, requiring digital skills.
Moreover, the turnaround time between investment and payback in ICT typically is a medium-term cycle, with lags between interventions and outcomes in the order of 12–24 months. So, while urgent action is required, the payoffs may be slower in coming. Nevertheless, intensifying the role of ICT in the economy does increase competitiveness and promote economic growth, leading to employment creation across a wide range of economic sectors where it is deployed or underpins business processes. Numerous studies have shown that the rollout of ICT and broadband infrastructure and services has a substantial positive impact on economic growth and employment.
Policy interventions for ICT need to focus on strengthening and enabling its role in SA’s economy, and across broader society, to promote economic growth, job creation, and livelihood support, as well as social development and service delivery, including via e-government, online education, e-health, and cultural enrichment.
Further, addressing the divide between the country’s digitally connected minority and the disconnected majority — a digital donga harshly exposed by Covid-19 — is key for inclusive post-pandemic recovery.
Several suggested interventions for the ICT sector now follow. A number of these may already be the object of implementation; others may be in the pipeline. They nevertheless remain key to a revitalised ICT sector. For this purpose, let us only focus on the short-term interventions.
• Dr Lewis is a councillor at Icasa
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