In a surprising move, MWeb is lobbying government to give Telkom the more than R1bn in cash stashed away in the universal service fund so that it can plough that money into upgrading its network.

CEO Rudi Jansen is especially keen for the money to be used to upgrade the so-called last mile of copper cables that connect customers to Telkom’s network.

He says the network has fallen into disrepair and needs work if it’s to be used to deliver the next-generation of broadband applications over fixed lines.

Jansen says Telkom could do with a big cash injection to get its network into shape to cope with increased demand from broadband subscribers.

“With proper regulations and pricing in place there is no reason Telkom should not be given the money,” he says. Jansen says he is lobbying in political circles for the money to be given to Telkom.

The universal service fund, which is administered by the Universal Service & Access Agency of SA (Usaasa), is believed to have more than R1bn in its coffers, contributed by telecommunications operators over a period of years dating back to the 1990s.

The money is meant to be used to facilitate the roll-out of telecoms infrastructure in underserviced and rural parts of SA but has remained largely untapped for years.

However, Usaasa, which has come under fire for not doing more to spend the cash, has recently promised to start disbursing more of it.

Jansen says that the money should be used to help Telkom make good on its network capacity promises. “Who else will get the capacity to the public?” he asks.

MWeb will have a tough time convincing government and many of the companies, other than Telkom, that have contributed to the fund over the years that handing the money to the fixed-line operator is a good idea.

Already, the department of communications has earmarked about R400m of the fund for subsidisation of digital set-top boxes for broadcasting, provoking uproar from Telkom and other telecoms companies that have contributed to the fund.

They argue it should be ploughed back into telecoms, not spent on broadcasting. Broadcasters, they argue, haven’t contributed to the fund and so shouldn’t benefit from it.

Jansen says Telkom is a deserving cause, provided the money is used correctly and its network tightly regulated.

Telkom has just begun an upgrade of all its local exchanges that will eventually result in many of its customers migrating to 10Mbit/s connections.

But some customers have asked to have their line speeds reduced because the infrastructure can’t cope. In some instances, it made the lines slower than before the upgrade, Jansen says. — Candice Jones, TechCentral