Treasury earmarks R500m for Sentech

By Damaria Senne, ITWeb senior journalist

Johannesburg, 14 Sep 2007

National Treasury has earmarked R500 million for Sentech to develop its wireless broadband network infrastructure - about half the amount Sentech initially asked for.

However, the state-owned institution will have to continue its long wait for the funding to be transferred, as the business plan for the network has not yet been approved.

Earlier this week, finance minister Trevor Manuel - in an extraordinary move - proposed Parliament approve the allocation of additional amounts of money to the departments of public enterprises, communications, agriculture, sport and recreation, in respect of the 2007/08 financial year.

Manuel said R500 million is to be transferred to Sentech to contribute to the capital requirements associated with establishing a broadband wireless telecommunications network.

The Department of Communications says the funds will only be transferred to Sentech once the revised business plan for the wireless broadband network infrastructure has been approved. The project was scaled down from an initial business plan that required R1 billion.

Communications department spokesman Albi Modise says, while National Treasury has finally disclosed the amount that will be granted for the wireless broadband network, it does not mean the money will be immediately transferred.

"The big step here is that National Treasury has finally put an amount it is willing to provide on the table. But treasury still has to approve Sentech's business plan and present it to the minister for final approval," he explains.

Lengthy probe

Sentech spokesman Hulisani Rasivhaga says Sentech's business planning is done. "National Treasury based the funding on the detailed planning, which is still in progress."

Rasivhaga says Sentech it is in discussions with various stakeholders, such as the departments of communications, education and health to prioritise the initial roll-out of the network.

The R500 million allocation comes 16 months after communications minister Ivy Matsepe-Casaburri first mandated Sentech to establish a wireless broadband network to cover underserviced areas.

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.

Government finally called for Sentech to narrow the focus of the project, ensuring it only covers remote and unconnected areas. The signal distributor is to provide core access to wireless broadband connectivity for government service delivery, and prioritise education and health centres.