Govt stalls on broadband plans

Johannesburg, 12 Jan 2007

Details on what role SA's latest broadband entrant will fulfil will only be made known after Parliament has reconvened next month.

In addition, the Department of Communications (DOC) has revealed it has yet to finalise a five-year broadband strategy for the country.

The Department of Public Enterprises (DPE) originally intended to hold a public briefing at the end of November to clarify details around Infraco. This has since been postponed to this month. The DPE now says it can only make an announcement highlighting all the relevant details after briefing a Parliamentary committee.

Analysts and consumers alike expect 2007 to be the year that broadband makes a huge impact. Arthur Goldstuck, MD of ICT research firm World Wide Worx, says broadband will be an important trend this year.

Broadband is expected to show "massive" growth, albeit off a low base. By the end of 2008, Goldstuck expects that over a million people will be on broadband.

Confirming Infraco's existence last year, public enterprises minister Alec Erwin said it would reduce the cost of broadband from early 2007.

"The net expectation... is Infraco being able to reduce long-distance pricing to significantly lower levels compared to Telkom, within five years."

Slow start

DOC spokesperson Albie Modise confirms that government's five-year broadband strategy has yet to be finalised.

In a budget vote speech in May 2006, communications minister Ivy Matsepe-Casaburri announced the formation of the Broadband Advisory Council, chaired by Dr Victor Lawrance, from Ghana, and including Dr Henry Chasia, executive deputy chairman of the Nepad e-Africa Commission.

The council was expected to provide recommendations that would help the DOC formulate a five-year broadband strategy by the end of 2006.

Erwin's spokesperson Gaynor Kast says the DPE cannot provide details on Infraco until the Parliamentary Portfolio Committee has been briefed. Once this has taken place - some time in February - the department will "make an announcement highlighting all the relevant details".

Kast says that while various sensitive discussions are still under way, the department is "satisfied with the progress made to date" and "everything is on track as planned".

Erwin indicated last year the department would reveal how Infraco would fit in with other projects such as the Eassy cable, the Square Kilometre Array and SA's preparations for the 2010 World Cup.

Infraco's anticipated role was outlined by a DPE statement in response to R647 million in seed funding allocated under the medium-term budget policy statement.

The department said government's strategic intent with respect to Infraco is to "enable a rapid increase in broadband availability and thus decrease in the cost of broadband". This is expected to increase ICT penetration, enhance productivity, and introduce a competitive dynamic in the supply of broadband bandwidth.

These ambitions are in line with president Thabo Mbeki's oft-stated comments that government desires to bring down the cost of doing business in SA.

Key player

In October, Erwin said funding earmarked for Infraco would speed up Neotel's ability to introduce services, as well as broadening broadband penetration at an affordable price.

Neotel MD Ajay Pandey last year said Infraco, as an entity, does not yet exist, despite it being granted funding by the National Treasury. The Independent Communications Authority of SA confirms it has not applied for a licence, although it is not yet clear whether Infraco will require a licence.

A Neotel spokesman says the operator is reliant on Infraco. "Readiness of the Infraco network is an integral part of the launch of Neotel's services."

However, the second national operator adds: "A significant amount of work is already under way towards ensuring the readiness of this long-distance network."

Pandey previously indicated the company has agreements with the DPE to gain access to Eskom's intercity network at "commercial rates".