Soweto residents are not happy with the City of Johannesburg’s (COJ’s) plans to sell its R1.2 billion broadband network project to the private sector.
This after COJ’s Metropolitan Trading Company (MTC), which manages the municipality’s broadband network, wrapped up its last public meeting with residents and potential customers in Soweto on Saturday, 17 August 2019.
In a statement, COJ says MTC officials took it on the chin when residents threw verbal punches at the end of an hour-long presentation by, among others, the chief technology officer Itumeleng Mofikoe.
The aim of the Johannesburg Broadband Network Project is to provide access to broadband services that will improve the city’s service delivery, realise ICT cost-related savings for the city, and grant communities and businesses across Johannesburg more affordable access to the Internet.
COJ notes that about 40 residents and business owners who listened to the hour-long presentation detailing MTC’s plans of re-engineering itself out a cash crunch by selling off its broadband network, worth R1.2 billion to the private sector, expressed disappointed that they were being consulted after the fact.
“You can’t come and tell us at the end of the open tender that you want our inputs. We also wanted to be a part of the bidders for the network. How long must we sit back and watch as the big four telecoms companies dominate the market?” asked one resident.
Another said: “You are coming to us after the fact. You are essentially privatising a state asset. You should have called the right audience, which is business people, and shared details of the tender before the closing date.”
According to COJ, the MTC broadband network tender opened on May 22 and closed on 22 July 2019.
“Why didn’t MTC contact ICASA [Independent Communications Authority of SA] to get black players in the telecoms space? This is a waste of time as the new entrants you’re seeking can’t operate without a licence. The MTC open tender is rolling back Internet access to the masses, which is a universal right,” said another resident.
Mfikoe encouraged residents and business people not to hold back their punches. He said once a service level agreement has been concluded with the successful bidder, follow-up meetings with all stakeholders will be held so that the mechanics of the reseller programme can be explained.
He said far from disadvantaging residents, the sale won’t change the status quo because the successful bidder will have to abide to the terms and conditions of the city to ensure access for residents.
Mfikoe added that this will stimulate socio-economic activity by increasing SMME participation through a broader catalogue of ICT products and services it will offer for resell.
COJ says the sale of the city’s broadband network will unlock and support smart city initiatives that seek to improve service delivery and the experiences of residents in the City of Johannesburg.
The city previously indicated that it was looking to rehabilitate its troubled entity, the MTC, in a bid to expand broadband roll-out and boost Joburg's smart city status.
Among the problems MTC has faced, the city recently instituted an independent forensic investigation into the city's prior decision to buy a 900km fibre broadband network for R1.2 billion. The purchase was done through MTC.
COJ executive mayor Herman Mashaba confirmed a thorough investigation will take place as a result of the “astronomical costs” incurred by the city after taking over the project.
He noted that to date, MTC has not had a viable business plan nor the capacity required to run a broadband operation of that size.
On commencing operations on 30 September 2015, MTC ended the 2015/16 financial year with a net loss of R54 million.
In 2017, Mashaba said costs of broadband network project had ballooned by at least R400 million.
According to the mayor, the investigating team's report also implicates two members of national government – a minister and a deputy minister – as benefiting from the previous administration's decision to purchase the fibre network – to the tune of almost R200 million.
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