Budget: State-owned ICT companies by 2020

The Department of Telecommunications and Postal Services (DTPS) plans to establish a state IT company and a state ICT infrastructure company by 2020, although the exact functions of these new companies remain a mystery.

The telecoms ministry confirmed the news in the Estimates of National Expenditure (ENE) document, handed out to coincide with finance minister Malusi Gigaba’s National Budget Speech.

According to the DTPS, establishing these two new entities will involve merging different functions of the State IT Agency, Sentech and Broadband Infraco.

ITWeb first reported on the news of two state-owned ICT companies last year, noting the department had developed a consolidated SOC rationalisation process of key state-owned companies to form a state IT and ICT infrastructure company.

The ENE document says: “The department has submitted proposals for the establishment of these companies to Cabinet for approval and plans to draft their proposed mandates in 2017/18. Draft legislation will be developed for these companies in 2018/19 for submission to Parliament in 2019/20.

“To fund these activities, allocations to the ICT Enterprise Development and Public Entities Oversight programme are expected to amount to R797.4 million over the medium-term.”

Over the medium-term, the department pointed out it also plans to continue with the phased implementation of the 2016 White Paper on National Integrated ICT Policy, which will entail changes to existing legislation and the development of new legislation.

The White Paper was finalised and published in September 2016, and is supposed to replace the separate white papers on telecommunication (1996) and postal services (1998).

According to the department, it has identified that the Electronic Communications Act and the State Information Technology Agency Act require revision, and ICT commission and tribunal, and ICT state infrastructure bills need to be developed to make provisions for the department’s long-term strategic intent.

“To give effect to these activities, spending in the policy, research and capacity development programme is expected to amount to R271.2 million over the medium-term, increasing at an average annual rate of 4%.”

By Simnikiwe Mzekandaba for ITWeb 

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