Johannesburg, 22 Feb 2012
State connectivity provider Broadband Infraco will spend more than R1 billion on several projects to increase connectivity.
According to National Treasury's Budget Review, which accompanies finance minister Pravin Gordhan's 2012 budget speech, the state entity will spend on the West African Cable System (WACS), increased service provision in rural areas, and making sure there is enough connectivity for projects such as the Square Kilometre Array, the South African Large Telescope and the South African National Research Network.
The Department of Public Enterprises aims to make sure that WACS is ready for service in the third quarter of 2012 by monitoring Broadband Infraco's participation in the cable consortium every quarter.
The department's estimates of expenditure indicates it has funded Infraco to the tune of R377 million in 2008/9, R209 million in 2009/10, and R138.6 million in 2010/11.
The funding went into establishing the company and for capital and operational costs. However, Infraco is expected to be self-funding, although it anticipates making a loss for the next four years.
Infraco generated a net loss of R207 million for the 2010/11 financial year, compared with the R28 million loss in the previous year. It also generated less revenue than expected, at R297 million, compared with its R412 million budget.
It was established when the department purchased full service networks from Eskom and Transnet in the 2006/7 financial year. It is intended to be a state-led intervention to introduce competition in the telecommunications market and increase access to broadband, especially in under-serviced areas.
The number of broadband access points in major cities and under-serviced areas will improve from five in the last financial year to 18 in 2014/15, as Infraco rolls out national long distance infrastructure.
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