Infraco to launch soon

ADSL South Africa (Broadband South Africa), 14 February 2007

State-owned broadband entity Infraco will launch next month. Minister of Public Enterprises, Alec Erwin, has in the mean time clarified a lot of issues pertaining to Infraco.

Erwin made it clear that Infraco “is not a telecommunications company.” Infraco will strictly be a supplier of ‘broadband capacity between cities and between SA and the rest of the world’ (Erwin clears air on state-owned Infraco, Joffe, 13 February 2007). This in effect leaves not much room for ‘confusion and concern in the market about the advent of another state owned enterprise in the telecoms sector’ (Erwin clears air on state-owned Infraco, Joffe, 13 February 2007).

It’s also clear that:

• Infraco will supply broadband capacity on fibre optic cabling.

• Sentech  will focus on the delivery of services via wireless systems (non-fibre   cable systems).

• Sentech will prioritise education and health centres.

• Government will invest R1.4 billion in Infraco over the next 3 years.

• Infraco (or the original fibre optic cabling that belonged to Eskom  and Transnet) will not be sold to Neotel  (SNO) as originally anticipated.

• Infraco’s activities will complement Sentech’s activities.

Why not stick to the original plan?

Well, according to government one of the reasons for not sticking to the original plan is because they want direct control over the costing and pricing of Infraco’s network.

According to Erwin ‘it would create a reference price that would help bring down broadband costs’ (Erwin clears air on state-owned Infraco, Joffe, 13 February 2007). While this might seem as a noble idea it leaves a lot of room for abuse as well.

Consider the following: Government is sitting on a large chunk of Telkom and has up to date beyond reasonable doubt proved by their actions, that they can’t get Telkom to deliver better service at more reasonable prices. Based on this one can’t help to second guess government’s noble intentions since government will indirectly control at least part of Neotel (SNO).

In other words, chances are good that government will once again make an awful lot of noise in regard to lowering the cost of telecoms in South Africa, while no real action is taken to back it all up.

It’s our sincere hope that history will prove us wrong in this regard since the contrary will mean that the average South African has once again been taken for a ride.

ADSL South Africa (Broadband South Africa) welcomes any development that might help to provide broadband access to more South Africans and lead to more decent pricing in the process.