Infraco to be licensed in third quarter

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 15 May 2008

Broadband Infraco is likely to only receive its licence to operate in the third quarter of the year, sources say.

This is according to sources within the Department of Public Enterprises (DPE), speaking yesterday after the budget vote speech by public enterprises minister Alec Erwin.

During a news conference before the start of the speech, Erwin would only say his department was working with its opposite at the Department of Communications to resolve the issue.

The Electronic Communications Amendment Act requires Broadband Infraco to present its business plan to communications minister Ivy Matsepe-Casaburri for approval so that she can then issue the regulator, ICASA, with a directive to issue a licence.

However, the sources say, the longer-than-expected time taken to issue the licence should not impact the roll-out of Broadband Infraco's terrestrial and undersea networks, but it does mean the state-owned enterprise would not be able to sell capacity directly to its customers.

Broadband Infraco currently operates under an arrangement with second national operator Neotel, whereby the latter has an exclusive four-year marketing contract.

DPE director-general Portia Molefe says the plan was always that Broadband Infraco would operate as a wholesaler of bandwidth and never approach end-users directly.

"We are confident that all the issues will be resolved and Infraco will work as we originally planned," she adds.

During the debate on the budget speech, ANC MP Christopher Wang said Broadband Infraco was in the national strategic interest, but that he worried about the tight deadlines the rolling out of the network would entail.

"We have to ensure the network is ready for the 2010 Soccer World Cup," he said.

Erwin did not mention Broadband Infraco at all during his speech and focused on a proposed law that would be a corporate governance equivalent of the Public Finance and Administration Act.

This law would delineate the lines of accountability between the management and boards of state-owned enterprises, the responsible ministries and the parliamentary oversight committees. It would also prescribe what information such companies would be able to make available in public forums, without compromising their commercial secrets.

"Part of our problem with working out if Broadband Infraco was not only necessary, but a viable proposition, is obtaining the feasibility study, which the DPE has told us is a commercial secret. Maybe this law will help resolve such issues," one MP said later.