By 2020, about 13 125km of fibre-optic cable would have been refurbished and strengthened, said public enterprises minister Malusi Gigaba, during his budget vote speech.
He explained that this is to ensure carrier-grade status and that the broadband network would have been expanded to include metros and underserviced areas.
“The investment programmes of our SOCs [state-owned companies] are dramatically transforming the South African economic landscape. Our vision envisages a relationship between our SOCs and their customers that drives investment and enhances our national competitiveness, particularly in sectors identified as important in our industrial policy and the New Growth Path.”
Remedial action
Gigaba said, over the last year, the department had focused on bringing stability to the management of SOC Broadband Infraco.
It generated a net loss of R207 million in 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.
“Key appointments, including that of CEO, have been made, the audit of problem areas has been finalised and remedial actions taken,” added Gigaba. The department last month announced that Puleng Sejanamane will take over as CEO.
Government tenants
“As a carrier of carriers, Infraco will work aggressively to promote competition in the services sector by making critical infrastructure available to electronic communication services licensees.”
The minister also said that as a wholesaler of ICT infrastructure, Infraco is well positioned to house and administer the scarce radio frequency spectrum currently under discussion.
“For interventions such as Infraco to succeed, it is necessary that government and its agencies be enlisted as major tenants on its network in order to enable the roll-out of the e-governance strategy and extend broadband infrastructure to under-serviced areas.”
The DPE and Broadband Infraco are now working on a detailed funding plan which aims to address the current cash position of the company.
The minister also said the West Africa Cable System's (WACS) international connectivity became operational on 11 May 2012, increasing bandwidth capacity, providing for improved integration of the 10 African countries that are customers of WACS, and enabling the further reduction of the cost to communicate.
In February, Infraco said it will spend more than R1 billion on several projects to increase connectivity.
Minimising losses
Speaking to ITWeb last month, Sejanamane said the company had turned the corner with regards to governance issues.
“We are focusing on optimising our network and meeting our customers' requirements and delivering on our mandate, which is to expand access to and availability of broadband. That's really the focus here.”
She added that the losses will be minimised. “We're a schedule two company, which means we are expected to generate a profit. We can't keep drawing from government funding all the time. The financial losses will be reduced. I consider the company to be a start-up and with every start-up there are teething issues.”
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