SA's ambitious plan to roll out broadband for all by 2020 could require an investment of as much as R90 billion by the state and the private sector, communications minister Dina Pule said yesterday.
Pule was speaking at the African Networking Academy Safari, at the Cape Peninsula University of Technology. The minister noted that the target could only be met in partnership with the private sector, which has already spent millions in rolling out infrastructure.
In August last year, former communications minister Roy Padayachie signed an ICT Industry Competitiveness and Job Creation Compact that committed to 100% broadband penetration by 2020. The target was criticised by analysts as being unattainable.
Private companies such as Vodacom, MTN, Cell C, Telkom, Altech, and Sahara inked the contract, as did public entities like the South African Post Office, SA Broadcasting Corporation, National Electronic Media Institute of SA, and the Universal Service and Access Agency of SA.
Earlier this year, Pule reiterated the commitment and said rolling out broadband infrastructure would need significant investment, but this would aid economic activity and create jobs. “Broadband alone should deliver 160 000 jobs by 2020.”
Hefty price
Last month, African ministers committed to rolling out broadband infrastructure to 80% of the people by 2020, during the inaugural ICT Indaba. In SA, the target is to deploy 100% broadband infrastructure by 2020.
Rolling out a broadband network to all South Africans could cost as much as R90 billion, based on estimates, Pule said. She said it would require a partnership between government and the private sector to extend fixed and wireless networks.
“No state can afford the financial commitments required to deliver on these targets working on their own. We can meet these challenges through progressive partnerships.”
Billions committed
SA's telecoms sector has already committed billions to improving access to broadband.
Earlier this year, Telkom said it would spend between R18 billion and R21 billion in the next three years as it upgrades its network to become IP-based. The operator has seen fixed-line penetration falling in recent years to less than four million currently, but the department views it as key to rolling out telecommunications infrastructure to aid the 100% target.
Vodacom, SA's largest mobile operator, spent R8.7 billion on its network in the year to March in a bid to boost capacity and support revenue growth, and aims to spend at similar levels in the year ahead. The bulk of its investment, at R7 billion, went into its local operations.
MTN, Africa's largest network, will invest a total of R24.4 billion this year, with R4.6 billion earmarked for its local operations.
Last September, MTN SA MD Karel Pienaar said the entire sector would have to spend about R100 billion in the next eight years to get broadband to everyone. MTN alone had spent about R16 billion in the last two-and-a-half years on upgrading its network, he added.
Pienaar noted that there are only a handful of players with the sort of cash flows that would make such an investment possible. Starting a network from scratch would require at least R30 billion, he added.
Vital partnerships
Pule said it was only through meaningful partnerships between the state, private sector, academia, civil society and the youth that poverty, unemployment, underdevelopment and the social exclusion of communities, especially the people who live in rural areas and those who are entrepreneurs or run small and medium businesses, can be abolished.
It is hardly surprising that business, especially those in ICT, understand the value of forming progressive partnerships, said Pule. She added that, in exploring the limits of the spirit of collaboration, the twin challenges of the high cost to communicate and cyber security should be relentlessly tackled.
“Price or the affordability of communication services is deepening and entrenching the digital divide. But this has to change and the good news is that we all have a significant role to play... Working together, we can all make our continent and the world great.”