As early as February this year, media speculated that state-owned companies Broadband Infraco and Telkom could merge. While there has been no confirmation yet, it now seems highly likely that the two would combine forces.
According to a report by Business Day Live, state-owned fibre-optic infrastructure company Broadband Infraco would support the government’s move to merge the entities.
“Broadband Infraco’s corporate plan for 2016-21 and its integrated report for the 2014-15 financial year that have been tabled in Parliament, make it clear its executives believe it is preferable for the company to be acquired as a going concern to preserve its value and assets,” it states.
The combination of the two entities would strengthen South Africa’s broadband capabilities, as Telkom has more than 147 000km of fibre while Broadband Infraco has a landline infrastructure of 14 676km.
During last year’s SATNAC conference, hosted by Telkom, South Africa’s Department of Telecommunications and Postal Services minister Siyabonga Cwele said that SA needs to do a lot more if it wants to compete on a global scale.
“In global standings, we are not doing well, but we need to sort out all the issues of access, so that we can leap-frog into the Top 30 in the world. South Africa is currently in 76th position in terms of broadband and connectivity. It was for that reason the government brought back the State Information Technology Agency (Sita) and Broadband Infraco,” he said at the time.
Telkom itself has also been tight-lipped about it, as it only said in February that it could be open for collaboration with others.
“We are always looking for ways to best collaborate within the industry but importantly, any such collaboration would have to be in a manner that added value to the business,” said Telkom’s managing executive for group communications, Jacqui O’Sullivan.
As a state-owned fibre-optic infrastructure company, Broadband Infraco has had its fair share of troubles.
Late last year it asked the government for R1 billion so that it could continue its operations.
“We note that BBI has been undercapitalised. We note that BBI has sustained in its history persistent losses, and has an obsolete network infrastructure,” said Sibongile Makopi, the Department of Telecommunications’ deputy director-general for state owned companies.
[Image – CC by 2.0/Bob Goyetche]