No cash yet for Sentech

Johannesburg, 11 Apr 2007

Government signal provider Sentech has warned that unless government allocates funding for the group's countrywide wireless broadband network, it is in danger of losing out on opportunities within the market.

Meanwhile, it is understood several local financial institutions are courting the company, expressing an interest in partnering with Sentech on various projects. However, the company's current status forbids it from obtaining funds from sources other than the National Treasury.

This recently prompted Sentech CEO Sebiletso Mokone-Matabane to appeal to Parliament for the Sentech board to be governed by the Section 2 rules of the Public Finance Management Act, rather than the current Section 3(b) rules. This would give Sentech the flexibility to source finance to keep up with its commercial competition.

Spokesman Pranill Ramchander says the request was made directly as a result of government's protracted investigation into Sentech's competitive position in the commercial arena.

As yet, there is no clarity from government about whether Sentech will receive the R1 billion it needs to proceed with its network project.

However, government has mandated a broadband network to bridge the digital divide in underserviced areas, as well as to meet its broadband needs.

"We've had no feedback and there seems to be no progress at this stage. I don't know what is holding up the process," says Ramchander.

He is confident that if Parliament granted Sentech permission to source funding elsewhere, it could secure the money immediately from private sector partners. It seems likely Parliament could address the request even before government makes a funding decision, Ramchander adds.

"The waiting period is frustrating, and we would like to move fast into priority and rural areas, where we essentially have to be," he says.

However, the delay has not necessitated a change in Sentech's overall strategy or revision of timelines, Ramchander states.

Government earlier this year denied it is deliberately withholding funding from Sentech, and said a decision was expected at the end of February. No subsequent deadlines for a decision have been given.

Department of Communications director-general Lyndall Shope-Mafole previously said government has to follow due process for the allocation and is wrapping up a study of the scope of the project.