Hi-tech headaches
Slow moves hold back 4IR in high-speed field
The government continues to throw money at long drawn-out technology and communications projects holding back the economic benefits of the fourth industrial revolution.
Finance minister Enoch Godongwana and his team at the National Treasury have allocated an additional R3bn for the department of communications & digital technologies — led by Khumbudzo Ntshavheni — to implement the SA Connect broadband project.
The project aims to connect 5.8-million sites to high-speed internet by 2025/2026 and was first approved in 2013. Its main purpose is the development of networking infrastructure in remote areas.
Rural areas have low network coverage levels as telecommunications operators have avoided investing there because of the expense. Providers would rather invest in towns and cities with big populations who are major consumers of communications services.
To resolve the disparity, the government plans to use public sector resources to close connectivity gaps. By connecting government entities through the State Information Technology Agency and Broadband Infraco, it could build rural networks.
However, as with many well-intentioned government plans, execution has been limited. Budget constraints and other issues have delayed the programme.
Split into two phases, the scope of the first segment was greatly reduced, cutting the goal of connecting 6,135 government facilities down to 970.
Rural connectivity is also hampered by load-shedding, says Paul Colmer, an executive committee member of the Wireless Access Providers Association, which has about 250 members. He says power cuts affect rural areas more than cities and metros.
“In the outlying and semi-rural areas, you will find that individual [network] towers are getting their access from other towers. It’s sort of relayed or daisychained.” He says if one tower goes down, it creates a knock-on effect with the others. “Even if they have power, there’s no connectivity coming to them.”
Another headache for Ntshavheni’s department is moving the country from analogue to digital television, a process referred to as digital migration.
In 2022, the government set aside about R1bn to cover the final phase of South Africa’s migration to digital television, which then slowed down the rollout of new spectrum to telecoms operators.
Alongside the spectrum allocation, the migration was expected to be complete in the 2021/2022 financial year, but that has been delayed by legal action from e.tv’s parent company, eMedia Holdings.
In his budget speech on Wednesday, Godongwana said: “In digital telecommunications, we will soon switch off the analogue signal and finalise the migration to digital signal. This will unlock the benefits of the spectrum auction and unleash renewed investment in the sector. We are introducing new regulations to enable the accelerated rollout of telecommunications infrastructure.”
The auction did go through last year, putting R14bn into state coffers.
However, delays on digital migration mean some of the spectrum awarded to telecoms companies can’t be used because it is still occupied by television broadcasters.
Regulator Icasa aims to have an additional auction this year that will likely bring some good news for the sector.
Perhaps the biggest headache for Ntshavheni is the failed turnaround of the South African Post Office (Sapo), which plans to retrench 6,000 people.
The Budget Review says Sapo “plays a crucial role in the economy of South Africa, especially among the poorest of the poor”, adding that “there is a need for recapitalisation of Sapo, and the minister of finance, in consultation with the minister of communications & digital technologies, should finalise the recapitalisation strategy and present this in the 2023 national budget”.
Until this is finalised, R2.4bn will be allocated for Sapo.
The Treasury notes that the entity was allocated a cumulative amount of more than R7.3bn between 2016/2017 and 2018/2019.
“Despite these equity injections, Sapo has not emerged from its present financial weakness,” it says.