Clarity imminent on R1bn broadband project

Johannesburg, 21 Jul 2006

State signals provider Sentech expects to get clarity from government next week on its proposed R1 billion wireless broadband network project.

Portfolio manager of PR and external communications, Dr Pranill Ramchander, says the company approached government a few months ago to fund the project, which will extend its MyWireless service across the country.

Sentech provides urban nodes in Johannesburg, Cape Town, Durban and Nelspruit with connectivity.

The project will involve building about 1 000 more base stations, concentrating on underserviced areas that would, for example, not have fixed-line provision, says Ramchander. This would form part of the Department of Communications' mandate to provide cheaper broadband access in rural areas.

As a result, Sentech will provide services in areas that are not commercially viable, hence its decision to approach government for funding. The meeting with government is expected to provide clarity on funding and timeframes, as no concrete information has been provided to Sentech as yet.

In October 2005, Sentech was expecting to be able to offer lower broadband costs as other operators get access to an arena previously dominated by Telkom, which would see prices becoming more competitive, said portfolio manager for broadband wireless Winston Smith at the time.

"One of the results of this would be decreased broadband costs," Smith stated. "Sentech would then be able to pass on those benefits to its customers including SMEs, using a MyWireless product."

Plan of action

Government's latest programme of action cites the implementation of Sentech's wireless broadband network as a priority. It says the roll-out plan is being finalised and notes a timeframe for completion of this plan as March 2007.

Users of the network, once available, will not be subsidised. However, Ramchander says it would look at pricing structures to make access more affordable. It is also likely Sentech will provide access via community centres, similar to government's multi-purpose community centres.

Last year, World Wide Worx stated broadband users in SA would almost double this year. The 2005 figure of 147 000 users was expected to reach 277 000 users this year. However, it said: "The barriers to consumer entry also mean that broadband will not grow SA's Internet user base dramatically in the short- to medium-term."

If 2006 growth rates continue through to 2008, broadband users will only represent 14% of the Internet market, it said. "The Goldstuck report: Internet Access in SA 2004", released towards the end of 2003, predicted Internet access was due to soar in 2004, thanks partially to Sentech's wireless broadband. In 2003, there were 3.28 million Internet users.

Internet World Stats says at the end of March this year, there were 3.6 million users out of an estimated population of 48.9 million, which is an Internet penetration of 7.4%.