Sentech to set record straight

By Damaria Senne, ITWeb senior journalist

Johannesburg, 22 Feb 2008

Sentech has vowed to set the record straight about its funding prospects, stating it is preparing a detailed response to media reports about a lack of confidence in its management team.

This is in response to an ITWeb article reporting that Sentech's annual budget allocation was slashed by 44% because of lack accountability by the state-owned entity.

The company will also clarify any confusion arising from references to Sentech in the budget vote for the Department of Communications, in which the phasing out of business products is stated as fact, Sentech says in a statement.

Key stakeholders, including government, will have to be consulted before the company can respond in detail, says Sentech. A consolidated and comprehensive response is being prepared for release within the next seven to 10 days.

"Suffice to say that the management team is deeply concerned about the impact of these statements on staff morale and customer confidence, and is determined to set the record straight," says Sentech CEO Sebiletso Mokone-Matabane.

The ITWeb article cites a National Treasury official, who cannot be named, stating his department is working closely with the Department of Communications (DOC) and Sentech to bring the state-owned entity back on track.

Unless confidence in the corporate governance, financial management and strategic focus can be restored, Sentech is unlikely to receive anything more than minimal funding, the official said.

Brighter picture

Mokone-Matabane says the long-term future of the company is a lot more positive than it appears in the public domain.

The 2008 national expenditure report, released by National Treasury this week, shows Sentech is expected to return to profitability in the 2009/10 financial year, through the discontinuation of unprofitable products under the multimedia and carrier of carriers licences.

This would see MyWireless, Biznet and the international telephony business being phased out. A new strategy will be developed for VSAT and continuing the roll-out of the 2010 World Cup infrastructure.

The report also shows that Sentech will receive R350 million in 2008/9 for its infrastructure projects. This is a drastic cut from the R625 million it received in 2007/8.

In the 2009/10 financial year, Sentech is to receive R250 million, while in 2010/11 the organisation has been allocated R150 million in funding.

The funding over the next three financial years has been allocated to broadcast digitisation (R450 million) and the 2010 FIFA World Cup (R300 million). Last week, Sentech received R500 million to be used to build a national wireless broadband network.