R3 billion blown on state calls


Government departments have been warned not to renew any telephone contracts until next year, as chief procurement officer Kenneth Brown tries to slash the government’s R3.2-billion annual communication bill.


Brown believes the R3.2-billion spent by national and provincial departments every year on mobile, fixed line and PBX (private branch exchange [the private telephone network used within an institution]) communication is excessive.

Fixed line and PBX communication accounts for R2.2-billion and mobile (cellphone voice and data subscriptions) R806-million.

In the 2012/2013 financial year, the government spent R773-million on cellphones and data.

To cut costs, Brown will reduce fragmented procurement, duplications and different pricing.

Before Brown’s initiative, over 723 departments and state-owned entities were contracting communications services, resulting in duplicate tender processes, contracts, administration and management.

Documents seen by Sowetan show that Brown told directors-general and boards of state-owned entities not to renew “any fixed line and/or PBX contracts between May 19 2016 and the end of March next year”.

“Where fixed line and PBX contracts expire before 31 March 2017, these contracts should be extended on a month-to-month basis until 31 March 2017, or until further notice from the relevant provincial Treasury or the national Treasury,” Brown ordered.

Contracts expiring after March next year must be honoured until completion or further notice by the national Treasury.

State departments and entities that have already issued tenders for fixed line and PBX services must consult their provincial treasuries and the national Treasury before concluding tender processes and awarding contracts, Brown said.

Two months ago, the national Treasury shortlisted Telkom, Vodacom, MTN and Metro Lifestyle Centre for the multimillion-rand contract to provide communication services to the government until 2020.

But Dr Christoph Stork, senior research fellow at Cape Town-based Research ICT Africa, suggested the government should consider over-the-top (OTT) services such as Skype, which provides video chat and voice calls, or develop its own applications (Apps).

He said a government-only OTT service was possible and that many people in SA were already using OTT services.

“The sooner the government joins the bandwagon, the sooner it will benefit in terms of cost saving.”

He said it would take up to three months to develop a government-only OTT service.

According to Stork, moving towards OTT services would also improve service delivery but would need an improved wireless service.

He said OTT services do not require any new infrastructure.


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