Sentech's role grows

Sentech is again being tasked with bridging the digital divide, and this time is expected to roll out broadband infrastructure to the rural areas. However, funding for this initiative is yet to be made available.

The company has been waiting for several years for the R3.5 billion it needs to establish a national broadband project, the wholesale National Wireless Broadband Network (NWBN).

Communications minister Siphiwe Nyanda has said Sentech is to move from providing retail services, which has been a failure, to becoming the key provider of infrastructure for telecommunications in rural areas.

This includes building infrastructure to provide services to Dinaledi schools and Thusong centres. However, these projects have still to get off the ground, and R500 million has been earmarked, but not spent for the Dinaledi plan.

The state-owned enterprise's new role is clarified in the Public Service Broadcasting Bill, which is open for comments until 7 December. The Bill says Sentech must “contribute to information society by rolling out broadband infrastructure to the rural communities”.

In addition, the signal-distributor must ensure universal access to broadcasting services by rolling out the transmitter network, with a specific focus on rural areas. The company is also tasked with maintaining and ensuring availability of a robust transmission network infrastructure.

The fund is to be set up under the Public Service Broadcasting Bill and will source money from Parliament, taxpayers and contributions from business. However, Sentech can only use money from the fund for broadcasting purposes.

Tiyani Rikhotso, spokesman for the ministry, was not available this morning to indicate where Sentech will get funding from, nor where the R3.5 billion it needs for the NWBN is.

In the enterprise's annual report, for the year to March, chairman Colin Hickling says Sentech is committed to realising government's aim of developing rural areas and making wireless broadband infrastructure available on behalf of the state.

He says the primary objective of this is to bridge the “digital divide, enabling development in the ICT sector and reducing the cost of communication”. Hickling says Sentech is committed to meeting this mandate “as additional funding becomes available”.

However, the state-owned entity is running at a loss. In its 2009 annual report, it says it turned over R766.7 million in the year to March, an improvement on the R724 million it received in revenue the year before. The bulk of the company's revenue, at 54%, is earned from services it provides to the South African Broadcasting Corporation.

However, the company widened its loss to R20.9 million, from R7.3 million in the previous year. Sentech says operations to be discontinued account for the major part of the operating loss, which will stem the bleeding in the following year. “We further had an impairment of R46 million for assets impaired related to the discontinued operations. These expenses are non-recurring.”

Sentech was also not available to comment this morning.