Sentech has to wait for funding

By Damaria Senne, ITWeb senior journalist

Johannesburg, 22 Feb 2007

Wireless broadband network provision to underserviced areas has hit further delays, as government mulls Sentech's potential competitive position in the private sector.

Despite increased allocations of funds for certain of its projects, Sentech is still uncertain when it will receive cash to deliver on its government mandate to build a countrywide wireless broadband network.

However, Department of Communications director-general Lyndall Shope-Mafole and Sentech spokesman Pranill Ramchander are both confident Sentech will receive the required funding, believed to be R1 billion.

In yesterday's national budget, Sentech was allocated R120 million for the 2007/8 period for its digitisation project and R21 million for its participation in the East African Submarine Cable System - now called the Nepad Broadband Infrastructure Network. The digitisation project has also been allocated a further R150 million for 2008/9 and R75 million for 2009/10.

The allocations for 2007/8 and 2008/9, for the digitisation process, are above what was initially projected, says Ramchander.

"This indicates [government's] commitment to the process," he says.

However, there was no mention of the R1 billion funding Sentech says it requires to establish a wireless broadband infrastructure, as mandated by government.

Shope-Mafole says the challenge in finalising the network funding lies in the potential for unfair competition, as a result of Sentech providing services to individuals in metro areas.

Ring-fence funding

"We don't want Sentech to use taxpayers' money to compete with other broadband providers in providing services to individuals [within the private sector]."

She says the Department of Communications and National Treasury have had lengthy discussions on the matter, consulting with other stakeholders to find a way to ring-fence the funding and ensure there is no unfair competition. While the consultation continues, a lot of work that relates to the planning of the wireless broadband network is taking place, she adds.

"Delays are delays, but they will get the money."

In his budget speech, finance minister Trevor Manuel said Sentech's business investment would be funded from a R3 billion contingency fund. This is also expected to provide funding for Infraco, and land claims related to the Alexkor diamond mine.

Specific funding would depend on approval of business plans and the resolution of regulatory matters where applicable, Manuel said.

Ramchander points to a briefing of the Portfolio Committee on Communications by communications minister Ivy Matsepe-Casaburri, earlier this month, in which she said Sentech was a strategic government asset in the provision of access to wireless broadband connectivity, essential for government service delivery.

Matsepe-Casaburi also expressed confidence in Sentech's ability to deliver on its mandate, particularly on its guarantees to deliver broadband facilities to ensure a successful 2010 Soccer World Cup, Ramchander says.