The roll-out of a fibre optic network by the City of Cape Town could contribute a cumulative amount of at least R211 billion to the gross domestic product (GDP) over its 20-year life cycle.
This is according to the draft results of an economic impact assessment commissioned by the city as part of its business case for the fibre network.
The city plans to lay fibre around its municipal environs to connect its buildings, such as libraries and clinics, and then allow the private sector to use the spare capacity to resell commercial services.
Speaking at the third annual BMI-TechKnowledge Digital Cities Forum, in Midrand, this morning, Cape Town CIO Nirvesh Sooful said the impact study was conducted by the same economic consultants who performed assessments on the Cape Town International Convention Centre and 2010 Soccer World Cup stadium.
The study, the draft results of which were disclosed publicly for the first time at the forum, focused on GDP growth and job creation.
Conservative model
The study found the total contribution of the network to GDP in the 2007/8 financial year would be R225 million. This would rise to R483 million in 2008/9 and R736 million in 2009/10, Sooful told delegates.
By 2012, when the roll-out was to be completed, the cumulative contribution to GDP would amount to R5.7 billion, rising to R211 billion by 2026/27 - the end of the network's life cycle.
Sooful said this estimate emerged from the most conservative model in the study, of which a final version would be ready in about two weeks.
He said the economic impact study indicated the network would create 14 000 direct and indirect jobs by 2010, and about 250 000 by 2027.
"The City of Cape Town is embarking on this broadband initiative for its own needs," he said. "We need this to run the business of the City of Cape Town, so we are going to do it anyway." On that basis alone, the project was viable, with a seven-year payback.
"But the key part of it is if that spare capacity is made available on an open access model, there is a massive impact on the economy of Cape Town."
The city had issued a request for interest, and in the next few weeks would issue a request for proposals for the roll-out of the fibre optic network.
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