While the implementation of national broadband initiative SA Connect is still up in the air, government has thrown its weight behind the project, increasing funding by an extra R500 million.
Delivering Budget 2016, the country's most anticipated budget speech, finance minister Pravin Gordhan stated, over the medium-term expenditure framework (MTEF) period, R1.6 billion is allocated to the SA Connect broadband programme.
This means the budget to deliver widespread broadband access in SA jumps from last year's R1.1 billion, to R1.6 billion over the next three years.
Ovum analyst Richard Hurst says although the budget increase is great news, the country will need to ensure it is able to gain the maximum benefit from the investment.
"I think that any increase will be welcomed and will make some strides in being able to complete the project goals. However, we need to understand that much of the ICT equipment will be priced or sold in dollars, and the increase in budget may simply be sufficient to cushion the blows dealt by the declining rand/dollar exchange rate," he explains.
Money matters
SA Connect, announced in 2013, aims to deliver 100% broadband connectivity for all schools, health and government facilities by 2020.
The Department of Telecommunications and Postal Services (DTPS), which is overseeing SA Connect, predicts 3 158 government institutions and 4 442 schools will have broadband connectivity over the medium-term.
Although it has been over two years since the policy was published, there hasn't been enough communication on the implementation of the project.
According to Marian Shinn, Democratic Alliance MP and shadow minister for telecommunications and postal services, the extra R500 million is not enough to meet the objectives set out for the period. "The money budgeted for SA Connect is grossly inadequate. R1.6 billion over the MTEF (2016/2019) period is little over R500 million a year."
Shinn adds: "While the DTPS asked for R1.4 billion for SA Connect in the MTEF from 2015/2018, it was only allocated R739 million by National Treasury. I assume the first R200 million that was earmarked for fiscal 2015/16 has been unspent and rolled over into this new MTEF."
It is unclear how the department spent this money, Shinn says. "The DTPS has refused my requests via parliamentary questions to reveal these, and said it will not release the work plan as this is a dynamic document and subject to frequent change in a rapidly changing ICT environment."
ICT research and consulting firm BMI-TechKnowledge says more funds will be needed for SA Connect, especially given the scale of the project.
"As expected, the new funds allocated to SA Connect are very small in comparison with the true scale of investment required to meet the ambitious national broadband policy goals. However, the comments about SOEs [state-owned enterprises] better leveraging private sector capital are really welcome as the funding requirements of SA Connect can only be met with the active participation of the private sector.
"We believe it is urgent that government, stakeholders and the private sector meet in a SA Connect 'Codesa-style engagement' to work out a more pragmatic approach to the current trajectory of SA Connect. Failure to do so, in our opinion, will only result in the country and its citizens suffering entirely avoidable socio-impact consequences as we fall even further behind our peers in broadband connectivity."
Partner up
The DTPS has remained mum on the lead agent that will be in charge of the implementation of phase one; however, speculation is rife that government has appointed Telkom.
According to various reports, Telkom is close to reaching an agreement with government to start a R750 million first phase of broadband rollout.
The department has refuted such claims, and says it is following due process to facilitate the rollout of broadband for phase one of SA Connect.
Industry players previously stated the successful implementation of an ambitious project like SA Connect will require the formation of private-public partnerships (PPPs).
"Telkom cannot be the only player as this is a mammoth project. Lots of other players, especially in the private sector, need to be involved," said IDC senior research manager for telecoms and media in Africa, George Kalebaila.
In his budget speech, Gordhan noted the available opportunities for the telecoms sector to form joint public and private investment and facilities management.
"Our working partnership with business leaders and social stakeholders, under president Zuma's initiative, is about implementing these and other aspects of the National Development Plan," said Gordhan.
Following the finance minister's speech, Cell C issued a statement noting the appeal for closer PPPs to help deliver on infrastructure echoes its calls for more collaboration in terms of infrastructure deployment and sharing.
"Harnessing the collective experience and insight from both government and private entities will accelerate delivery."
The statement adds: "The substantial increase of budget for SA Connect is a positive sign of government's commitment to connecting more citizens, especially those in under-serviced areas. Cell C looks forward to partnering with government in ensuring the goals of Vision 2020 are achieved."
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