Broadband Infraco appears to be in limbo. After national treasury made no mention of the state-owned telecommunications company in its latest budget vote allocations, an Infraco spokesman has downplayed industry talk that it will soon be put up for sale.
“Broadband Infraco is not aware of any impending sale of itself to any third party,” spokesman Sammy Mafu told TechCentral on Monday.
Last week, Democratic Alliance MP Marian Shinn noted that no reference was made to Infraco in the budget votes of the department of telecoms & postal services and the department of public enterprises. The company had previously reported into public enterprises, but was shifted to the telecoms department last year following a presidential proclamation.
Further questions have been raised about Broadband Infraco’s future after President Jacob Zuma last month told parliament that Telkom had been designated as the “lead agency” for the roll-out of broadband in underserviced areas. Infraco had been lobbying to be this agency.
Shinn said in a statement issued on Sunday that the absence of any mention of Infraco in the budget votes will “further fuel speculation” that it is to be sold. “If public speculation proves to be true, the sale could be to JSE-listed Telkom,” she said. “Government has been vocal about selling noncore assets to raise funds and Broadband Infraco’s omission … could be the signal that its sale is imminent.”
In a statement on Monday on government’s decision to appoint Telkom as the “lead agency” to roll-out broadband in underserviced parts of South Africa, telecoms minister Siyabonga Cwele made no mention of Broadband Infraco.
“The partnership between government and Telkom will facilitate coordination and efficient use of resources by all parties in order to expedite the achievement of South Africa Connect objectives while leveraging on existing broadband infrastructure to minimise the cost of network expansion.”
Mafu said Broadband Infraco’s position “remains unchanged”.
“We are an ICT infrastructure company whose mandate is spelt out in terms of the Broadband Infraco Act. The latter states that the company must expand the availability and affordability of access to electronic communications, including but not limited to underdeveloped and underserviced areas…
“We continue to report to our shareholders, the department of telecoms & postal services, as well as the Industrial Development Corp, focused on meeting various customer obligations at maximum operational ability,” Mafu said.
“The 2015 budgetary allocation is not the first nor the second year that the company has not had an allocation of funds — the last shareholder injection ended in 2011. There is therefore nothing untoward in this specific instance regardless of past funding submissions.
“It is also important to note that the company was only transferred to the department of telecoms & postal services through a proclamation in September 2014 after the current funding cycle was concluded.”
Broadband Infraco’s infrastructure, which came from other parts of government, was originally meant to be handed over to second national operator Neotel at its formation in order to spur its growth and facilitate competition.
But former public enterprises minister Alec Erwin elected to establish Infraco using this infrastructure and to set it up in competition with Telkom, which at the time still enjoyed a powerful monopoly in the sector. — © 2015 NewsCentral Media
