Infraco ready for Neotel

Johannesburg, 28 Mar 2007

The Department of Public Enterprises (DPE) has completed preparations for Infraco's "tier one/superhighway" launch, it says.

However, there is still a lack of clarity as to Infraco's role in the local ICT landscape, as well as its organisational structure and licensing framework.

DPE's chief director of communications Vimla Maistry says the completion of the preparations means Infraco will be able to provide wholesale long-distance connectivity to Neotel as and when requested by the second national operator.

In February, public enterprises minister Alec Erwin said Infraco would "provide long-distance connectivity on a cost basis to the market, through an initial arrangement with Neotel, based on the telecommunications infrastructure originally built by Eskom and Transnet".

The DPE is satisfied with the progress it has made, despite having missed the March deadline for the initial launch of Infraco, announced by Erwin. "We have moved swiftly since 2005 and are satisfied with the progress we have made thus far," Maistry says.

She adds the DPE has continued with intensive and thorough consultation with other government departments, including the Department of Communications, in its bid to establish Infraco.

In a speech last week, deputy president Phumzile Mlambo-Ncquka said the Infraco business plan had been fine-tuned, but declined to give details.

Any progress?

Finance minister Trevor Manuel stated in his budget speech last month that Infraco would, upon approval of its business plan, be allocated funding from a R3 billion pot.

There are, however, a number of issues that need to be finalised and clarified while the DPE makes preparations to enable Infraco to provide services to Neotel. These include briefing Parliament on the structure of the company and the role it will play in the local ICT sector, as well as finalising its licensing framework.

In February, communications department director-general Lyndall Shope-Mafole said special arrangements would be made with the Independent Communications Authority of SA to ensure Infraco could provide services while its licence is pending. She said state law advisors were reviewing the ministerial directive that will set the stage for the licensing process to take place.

Department spokesman Albi Modise was this morning unable to confirm whether licensing progress has been made, or if the ICT sector should look forward to a policy directive soon.

At this stage, it is unknown whether Infraco will supply Neotel exclusively and for what period.

This has raised concerns that Infraco's role could disadvantage Neotel. "If and when Infraco sells national bandwidth to other tier one ISPs, such as Internet Solutions (IS), it would force Neotel to compete with it for the same customer," says MyADSL founder Rudolph Muller.

The same situation plagues Telkom and IS, for example, where the wholesale provider also sells directly to customers, undercutting the ISP, he says.