The state has reallocated funding for a national broadband project to other priorities over the medium-term, pending the development of a national broadband policy framework, which is targeted for next March.
Government currently has several infrastructure projects on the go, as it seeks to ramp up service delivery and aid a slowing economy in a bid to create jobs, in line with the National Development Plan (NDP).
While R36 billion-worth of "mega" projects are under consideration in the telecommunications sector, a national broadband infrastructure project is not included in a detailed list provided by National Treasury to coincide with the release of the national budget.
Finance minister Pravin Gordhan, addressing Parliament this afternoon, said consolidated government expenditure is budgeted to increase by 8.1% a year, from R1.1 trillion in 2012/13 to R1.3 trillion in 2015/16. Expenditure on transport, energy and communications will amount to R89 billion next year.
The value of major infrastructure projects in progress or under consideration in the public sector totals R3.6 trillion over the next few years, of which about 40% are in implementation. For the remainder of projects, concept proposals have to be assessed for alignment with the priorities set out in the NDP, followed by rigorous feasibility evaluations, states treasury's Budget Review.
"The trade-offs between technical viability, affordability, level of demand and financial feasibility need to be assessed to ensure a selection of projects and sequencing of implementation that best meets the growth and development objectives of the country."
The projects listed under the telecommunications sector include SA's migration to digital television, for which a total amount of R2.7 billion has been allocated to Sentech. The other project listed is the Square Kilometre Array, which is listed at a cost of R16 billion, which will be spent through the National Research Foundation.
Private spending
The review notes that the private sector has made substantial investments in broadband connectivity, concentrated in mobile networks and fibre-optic cable infrastructure. Average Internet connection speeds increased 32%, to 2.1Mbps between October 2011 and October 2012, it adds.
"The increase in broadband capacity means that user charges have fallen somewhat, but remain high by global standards."
Gordhan notes that, in the lead-up to the budget, treasury engaged with several business leaders on the investment and development challenges SA faces. Among the plans shared, signalling growing confidence in the business outlook, are two telecommunications investments amounting to R14 billion this year.
Public-sector investments by Broadband Infraco and Sentech are currently focused on service provision in rural areas and institutions such as schools, libraries and clinics. Cape Town, eThekwini and Johannesburg have also been investing in their own urban networks.
Over the medium-term expenditure period, additional funding for enhanced broadband connectivity will be allocated once a policy framework is agreed, note treasury documents. Treasury adds that the national broadband policy is currently being revised.
The Department of Communications had been expected to spend R535 million on access and backhaul broadband infrastructure in all of SA's nine provinces to supply infrastructure to rural and under-serviced areas.
According to the Budget Review, "information and communications infrastructure is a critical enabler of economic activity in today's world". The 2011 Census results show that 64.8% of households do not have access to the Internet, and that the bulk of those with access rely on cellphones.
"Access to the Internet is still hampered by relatively high costs and undersupply of broadband infrastructure across the country," says the review.
Communications aims to support national broadband objectives through the development of a broadband master plan, which will include the review of the broadband policy, and the development of a broadband strategy, implementation plan and business case with a funding model, states the Estimates of National Expenditure document.
"The broadband master plan will ensure that the roles and responsibilities of key stakeholders in the sector are clearly defined."
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