South Africa’s Universal Service Fund (1994 - 2014)

This chapter deals with the establishment of South Africa’s universal service fund, the country’s second major international best practice intervention aimed at providing universal access and service. The institutional arrangements governing the Fund, how contributions were levied, collected and disbursed, were problematic from the outset, and subject to a variety of vicissitudes, which form the subject of this chapter. There was poor specification, monitoring and collection of funds on part of the regulator, limited allocation to the Agency charged with expenditure from the Fund, and the very limited supply-side mandate of the Fund. This was exacerbated by ineffective and wasteful expenditure from the Fund, whose beneficiaries were largely a string of telecentre projects of dubious effectiveness and lacking in sustainably, along with funding for Internet access at schools and colleges. The intended primary beneficiaries of the Fund, needy persons, received almost nothing; nor did licensees receive any support for extension of the network. Ultimately, the Fund can be considered an expensive failure with extremely limited impact on universal access and service