Public sector CIOs should not sign any long-term connectivity agreements, as Infraco, government's new broadband supplier, would be the cheapest, says Department of Public Enterprises director-general Portia Molefe.
Molefe spoke yesterday during a lunchtime presentation at the GovTech 2007 conference, in Cape Town.
"I want to point out to all those government CIOs present, that the PFMA [Public Finance Management Act] obliges a department's accountability officer, namely the director-general, to choose the cheapest option - and Infraco will be the cheapest," she said.
Infraco CEO Dave Smith accompanied Molefe and both gave a brief rundown on Infraco. They had just attended the Parliamentary hearings that involved a detailed discussion of how Infraco should be licensed.
"I am confident Infraco will be licensed soon and I am very encouraged that there was agreement [in Parliament] that it would just require a small alteration to the Electronic Communications Act," she said.
Next logical step
An industry observer, who asked to remain anonymous, said government was within its rights to pitch its own services and products to state-entities. However, it could have long-term consequences for the private sector, he noted.
"Government spending makes up about 50% of the country's total ICT spend. This means they are shrinking the pie for the private sector and the smaller companies will be the first to lose out."
The observer stated that, with the creation of Infraco, the next logical step would be for the State IT Agency to start developing its own backhaul capacity. This would take market share away from Telkom and anyone else who wants to operate in this space.
"The fact is that the private sector will be left with a very limited space to do business," he said.
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