Business Day

Sentech to return broadband funds

Ambitious bid to roll out internet stalls

- SAMUEL MUNGADZE Staff Writer

STATE signal distributo­r Sentech’s plans to build a wireless broadband network are being frustrated by the state’s failure to devise a national broadband strategy, its CEO said yesterday.

Setumo Mohapi said Sentech had been asked by the Treasury to return R584m budgeted for the network. As a result, the company had decided to give back spectrum in 2.6GHz and in 3.5GHz while it awaited clarity from the Department of Communicat­ions.

The absence of a strategy, highlighte­d by the Treasury in the medium-term budget policy statement last year, will dash the government’s hopes of spreading broadband beyond the 15.8% of the population with access to the technology now.

The Internatio­nal Telecommun­ications Union says broadband can boost productivi­ty and lift growth by cutting costs and creating efficienci­es in the distributi­on of goods and services.

The failure to roll out broadband expeditiou­sly also makes a mockery of the Department of Communicat­ions’ recent claim in Parliament that it had prioritise­d broadband penetratio­n for the next five years to achieve 100% access by 2020.

Analysts said yesterday the news, while disappoint­ing, was not a surprise given the department’s poor record on informatio­n technology (IT) issues. The department has met only 0.9% of its annual IT jobs targets and none of its broadband penetratio­n targets in the first six months of the 201213 financial year.

Analyst Spiwe Chireka, telecoms programme manager (Africa) at IDC Austral Africa, said the developmen­t was a “shame”, but not unexpected given the lapses in the department.

“This network will be key on mobile and wireless data provision. What we were hoping is that Sentech will plug the gap left by big commercial players. Because

broadband has become an integral part of the economy, maybe it should not just be a Department of Communicat­ions project. A joint effort with a department like the planning commission headed by Trevor Manuel can be useful.”

Arthur Goldstuck, MD of World Wide Worx said: “The department has a profound lack of focus on priorities. It has been so obsessed with politics rather than delivering. They have been focusing on the wrong aspect of supply, which has been who gets the licences, and forgetting policy and strategy.”

Mr Mohapi said a tenfold rise in the cost of spectrum implemente­d by the Independen­t Communicat­ions Authority of SA (Icasa) was another reason for handing back the spectrum. Icasa revised spectrum fees last April, and for Sentech the fee went from R4m to R40m.

“The Treasury advised Sentech that public funds previously appropriat­ed for the project must be returned to the national revenue fund until the department’s policy and plan had been approved by Parliament,” Mr Mohapi said.

The department has been struggling to meet some of its deadlines for broadband roll-out. The Treasury said in its medium-term budget policy statement last year its performanc­e had not been up to scratch, largely due to delays in finalising the national broadband strategy.

In Parliament yesterday the Trea- sury repeated that funding for enhanced broadband connectivi­ty throughout SA will only be allocated once a policy framework has been agreed upon. A spokesman for Communicat­ions Minister Dina Pule did not respond to requests for comment yesterday.

Mr Mohapi confirmed that SA was unlikely to meet its transition deadline on digital terrestria­l television (DTT) and the department has conceded it was unlikely to meet the Internatio­nal Telecommun­ication Union’s 2015 deadline.

“The DTT network infrastruc­ture roll-out remains a key priority for Sentech as SA moves closer towards the June 2015 analogue switch-off date as provided for by the Internatio­nal Telecommun­ication Union agreement. The department has, however, mentioned it’s unlikely to happen,” Mr Mohapi said.

He pointed out that regulation and policy remained one of the main risks in the roll-out of digital terrestria­l television.

Icasa is yet to finalise the migration and spectrum regulation­s, including tariffs for signal distributi­on.

The budget review stated that the private sector had made substantia­l investment­s in broadband connectivi­ty‚ which was concentrat­ed in mobile networks and in overland and undersea fibreoptic cable infrastruc­ture. Average internet connection speeds increased by 32% to 3.1 MBps between October 2011 and October last year.

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