Sentech revises network business plan

Johannesburg, 16 Aug 2007

The protracted wait for government funding is not yet over for Sentech, and its plans to launch a countrywide broadband wireless network are still on ice.

The state signal distributor is revising its business model for the network project, and expects this to be completed within this week, says spokesman Pranill Ramchander.

The revised business plan will be handed to the Department of Communications and National Treasury, which will make the final decision on the funding allocation. Sentech requested between R600 million and R1 billion for the project, but has yet to see any money.

Communications minister Ivy Matsepe-Casaburri announced the project in May last year, with the aim of, among others, bringing broadband services to underserviced areas.

However, the project stalled when government undertook a lengthy investigation into Sentech's market position, ostensibly to ensure the state-owned company does not compete with private sector players with the network deployment.

Sentech then pinned its hopes on Matsepe-Casaburri's budget speech in May this year, but its hopes were again dashed as the minister did not give the project a mention.

Refocusing scope

Meanwhile, government's investigation, concluded in the middle of the year, called for Sentech to narrow the focus of the wireless network project, ensuring it only covers remote and unconnected areas.

The fund allocation was then presented to National Treasury for a final decision.

Ramchander said this morning that change of focus has called for Sentech to resubmit a revised business plan. However, he says the changes are not drastic and both treasury and the communications department are familiar with earlier versions of the business plan.

He does not expect the process to take much longer, but is loathe to commit to a specific timeline.

"I'm sure that once they've had time to look at [the revised business plan], they will fast-track the process."

The countless delays in funding approval prompted Sentech to express frustration with the situation. CEO Sebiletso Mokone-Matabane in May appealed to Parliament for Sentech's 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.

A decision on this is still outstanding, says Ramchander, but Sentech is hopeful that Parliament will approve the proposal. He earlier explained that Sentech has been losing out on lucrative opportunities to co-operate with the private sector due to the current law.