DA: Gov plan to create new broadband company is short-sighted

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Government’s plan to merge three existing state-owned enterprise (SOEs) to form one broadband firm is expensive and short-sighted.

This is according to DA Shadow Minister of Telecommunications and Postal Services, Mariann Shinn.

The Department of Telecommunications and Postal Services told Parliament’s Portfolio Committee on Telecommunications and Postal Services that it wants to merge Broadband Infraco and Sentech into the State Infrastructure Company to fast track the roll-out of internet to 90% of the South African population as part of its SA Connect project.

“It is clear that the focus of the department has shifted from meeting the urgent delivery deadlines of SA Connect in under-developed areas to building yet another state owned company from the existing fibre networks and infrastructure operated by state entities Broadband Infraco, Sentech, PRASA, Eskom, Sanral and Transnet,” said Shinn.

The formation of this new company will start with drafting legislation to merge Broadband Infraco and Sentech into the State Infrastructure Company. Both these entities will be expected to fund their merger and future operations from their balance sheets but neither currently receives government funding.

“BMI-TechKnowledge, which has extensively researched and costed SA Connect’s requirements estimates that the capital funding needed for the rollout at between R32.9 billion and R84.9 billion, depending on the technology used. Operational costs were calculated at between R54.8 million and R116.4 million,” Shinn added.

Shinn said if government was serious about rapidly rolling out broadband connectivity to the nation it would:

-Sell Sentech and Broadband Infraco’s network

-Fast-track the rapid deployment guidelines to reduce red tape between all sphered of government that currently hinders infrastructure build

-Pressure and resource Icasa adequately to drive infrastructure sharing regulations between network licence holders

-Incentivise the ICT sector to connect under-resourced areas

“As usual, the short-sighted ANC government’s control will not yield any tangible results anytime soon, instead it will remain a major deterrent to the expansion of broadband rollout to all South Africans and exacerbate the digital divide between poorer rural communities and the internet-empowered urban areas,” she concluded.