Government should carry out an extensive market assessment before undertaking a broadband intervention. This is the key lesson given by the International Telecommunication Union (ITU) to the South African government.
On Tuesday, the ITU released its latest report on global ICT regulatory developments, titled Trends in Telecommunication Reform 2016. It says before rolling out a project like the Johannesburg Broadband Network (JBN), government should ensure there is clear market failure that justifies the broadband intervention.
According to the ITU report, "a number of alternative fibre networks are already available in Johannesburg, which has called into question the need for the project".
"Contractual obligations upon the public and private sectors should be clear at the outset to ensure there is no dispute if either party defaults or reneges on the contractual agreement," says the ITU.
Initiated in 2006, the JBN is the City of Johannesburg's (COJ's) fibre network to address digital exclusion issues and improve digital connectivity among the city's citizens and businesses.
The project was designed to integrate the city's telecoms platforms, lower operational costs, increase access, reduce costs of communications for residents, and allow access to areas that were previously not connected, because they had no fibre network.
In 2010, Ericsson SA won the contract to build and operate the fibre network, but it was later transferred to CitiConnect Communications.
The original contract came into dispute after CitiConnect Communications was found to have created intermediary companies to sell spare capacity on the COJ's network, as well as that it laid fibre for a second network in the city's trenches.
Last year, the COJ took control of the R3.4 billion fibre network, after the council approved the creation of a municipal-owned entity to run it.
However, the JBN project has come under scrutiny, raising questions about the COJ's ability to compete with commercial services to generate profitable returns.
The ITU's report is "an overview of ICT policy and regulatory trends, and brings together insights of global experts to help regulators".
It also analyses the challenges and opportunities facing today's ICT regulators as services proliferate, platforms converge, and network operators ready their infrastructure for the next round of data-intensive technologies.
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