Faulty fund connection

2014-09-07 15:00

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Mystery surrounds the Universal Service and Access Fund, into which holders of electronic communications licences are obliged to pay 0.2% of their yearly turn­over derived from licensed revenue.

The fund is administered by the Universal Service and Access Agency of SA (Usaasa), which falls under the department of telecommunications and postal services. It is meant to provide access to something as basic as a ­telephone to people in remote areas.

But over the years, there has been a wide gap between what industry pays the Independent Communications ­Authority of SA (Icasa) and the amounts received by the fund.

For example, Vodacom’s South African arm alone paid in roughly R59.4?million – 0.2% of its turnover for the year to March 2007 minus a few deductions – six years ago.

City Press calculations show that Cell C’s contributions – based on its reported revenue – for the same year would have been about R15?million. Revenue from MTN’s South African arm was, until 2011, lumped in with other countries in southern and east Africa, but spokes­person Bridget Bhengu said the division contributed 0.2% of its annual turnover to the fund.

But Usaasa’s annual report for 2012 shows the fund received just R32.7?million in transfers and subsidies.

The gap between the fund and amounts paid by mobile operators has been widening ever since, peaking at about R62.5?million before the fund’s ­receipts suddenly overtook operators’ contributions in 2012.

“These payments are made to Icasa, which then provides us with a compliance certificate,” said Vodacom spokesperson Richard Boorman.

“My understanding is Icasa then transfers the money through to the ­National Treasury. As a regulated payment set out in law [similar to tax payments], we don’t receive detailed information about how the money is used.”

Dominic Cull, founder of communications consultancy Ellipsis Regulatory Solutions, said he understood Icasa was only permitted to hold on to revenue from licensees for a month before paying it over to Treasury, where it is it supposed to be set aside for the Universal Service and Access Fund’s exclusive use.

“From what I understand, it is also not clear what funds are in the [Universal Service and Access Fund],” he said.

Neither Icasa nor Treasury are ­answering questions about the money. Icasa spokesperson Paseka Maleka did not respond to questions, and Treasury’s communications unit was still passing the buck four weeks after the questions were first fielded.

Cell C communications head Karin Fourie said the company had no idea how its contributions to the fund were utilised, and that it had never received a proper accounting of the funds. “Proper disclosure would be much appreciated in terms of the Electronic Communications Act and Public ­Finance Management Act,” she said.


The agency said this week it had suspended a staff member for corruption and maladministration after she had used its board’s personal information to make personal travel arrangements and hotel reservations.

She had also booked a vehicle using the information of a different government agency – resulting in criminal charges being brought against her – and had used chairperson Pumla Radebe’s electronic signature to get a loan for a vehicle.

Spokesperson Khulekani Ntshangase said the agency was cooperating with the Public Protector in investigating another staff member, who is suspected of being an illegal Namibian immigrant possessing a fake matric certificate and was therefore employed without supplying the proper qualifications.

“The agency’s efforts [to get] the staff member to provide her proof of her citizenship and qualifications have been in vain for a number of months,” he said.

In June last year, the agency said it had suspended two staff members in response to an open letter from United Democratic Movement leader Bantu Holomisa alleging corruption and maladministration at the parastatal. It later emerged that one of the staff members, Mmatlou Morudu, blew the whistle to Holomisa.

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