Neotel disillusions Mlambo-Ngcuka

Cape Town, 23 Mar 2007

The deputy president is disappointed the second national operator, Neotel, has not yet made an impact on the telecommunications sector.

Speaking during a Parliamentary press briefing yesterday on the presentation of the first annual report on government's Accelerated Shared Growth Initiative for SA (Asgisa), Phumzile Mlambo-Ngcuka made special reference to the high cost of telephony.

Asgisa is a government programme, headed by the deputy president, aimed at boosting the economy by getting it to grow faster than the current rate of 6% a year. It also wants to increase employment, particularly among the young, and to achieve this through interventions in three sectors: biofuels, tourism and business process outsourcing (BPO).

Government previously bemoaned the high cost of telephony. President Thabo Mbeki has made frequent reference to it in his state of the nation addresses during the past four years.

"We have understood the cost of telephony is high in this country and we want it to come down. We have recognised the success of the BPO industry is directly related to this. I am disappointed the second national operator has not made any impact here yet," Mlambo-Ngcuka said.

Neotel was awarded the second national operator licence towards the end of 2005, and it has yet to offer either corporate or retail services.

As far as government's plans to introduce a new broadband state-owned enterprise, Infraco, Mlambo-Ngcuka said it was all "systems go".

"We have had to fine-tune the Infraco business plan and I don't want to say too much about it yet, as I don't want to steal the minister's [Alec Erwin's] thunder," she said.

During the briefing, officials from the deputy president's office said the three sectors were chosen for the interventions because of their ability to rapidly increase employment.

"The BPO industry was already increasing employment before government became involved and it looks as though it will continue," Mlambo-Ngcuka said.

Luke Mills, executive director of Calling the Cape, says the BPO industry in the Western Cape doubled the number of jobs it created to 25 000 over the past three years.

"We will release more information on our survey of the Western Cape BPO industry next month," he says.