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Govt still skirting Telkom tender issue

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 02 Mar 2015
Telecoms and postal services minister Siyabonga Cwele says there has been a market failure in SA broadband rollout.
Telecoms and postal services minister Siyabonga Cwele says there has been a market failure in SA broadband rollout.

Throughout SA, broadband infrastructure is skewed towards the rich and the country has seen a market failure in the rollout of broadband, which is why government has taken a deliberate decision to intervene and appoint Telkom as the lead entity to spearhead the rollout of broadband.

This is according to Siyabonga Cwele, minister of the Department of Telecoms and Postal Services (DTPS), and comes after several failed attempts to get clarity around the state's sudden appointment of Telkom as the country's number one broadband party - a move announced during president Jacob Zuma's State of the Nation Address last month.

The announcement, lacking in detail, evoked controversy within the industry, as the appointment of the fixed-line incumbent as lead agency for broadband deployment at national, provincial and local levels was made in the absence of the obligatory tender process.

After numerous attempts by ITWeb, over a period of more than a week, to get answers as to government's rationale behind the tender-free appointment, Cwele this morning released a statement.

In the statement, the telecoms minister outlines government's reasons for selecting Telkom as SA's broadband agent - which DTPS previously said would lead to the creation of a new national broadband company - but omits to address the issue of tender, as well as the question as to what position this leaves the state's broadband entity, Broadband Infraco, in.

Choice candidate

Cwele explains government will pilot connecting government facilities in eight poor district municipalities to fast and reliable Internet, as part of the first phase of the implementation of SA Connect.

He says it is commonplace in SA that both public and private companies in SA duplicate infrastructure in the well-off communities, to the exclusion of the poor communities.

The decision to designate Telkom as lead broadband agency, says Cwele, was primarily taken because government wants to accelerate the rollout of broadband. "Telkom has the most extensive infrastructure in the country compared to other public and private sector players.

"Furthermore, the current infrastructure rollout by both public and private sector players is fragmented, leads to duplication of efforts and resources, and is not expanding connectivity to uneconomic and underserved rural areas and townships.

"It is therefore necessary for government to facilitate the extension of optic fibre infrastructure for the benefit of all South Africans and other industry players through the establishment of an integrated national broadband network."

Cwele says the designation of Telkom also moves SA towards the creation of an open access network. "This network will usher in an era of services-based competition instead of infrastructure-based competition. We anticipate that such a dispensation will lead to more effective competition between operators and, over time, lower prices for consumers."

Cwele does not mention whether any other options were considered or how much government will pay Telkom for the extensive rollout.

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