Broadband Infraco on Tuesday reportedly told parliament that it has sufficient capital to continue operating until the end of August only. The admission has cast further doubt on the state-owned company’s future.
Last month, TechCentral reported that no mention was made of Broadband Infraco in either the budgets of the departments of telecommunications & postal services or that of public enterprises presented to parliament.
The company had previously reported into public enterprises, but was shifted to telecoms after the 2014 general election.
Infraco spokesman Sammy Mafu told TechCentral at the time that he was not aware of any impending sale of the business to a third party, though speculation has continued to rage in the industry that a sale could be on the cards, possibly to Telkom, which has been put in charge of government’s rural broadband project.
Telecoms department director-general Rosey Sekese is quoted by Business Day on Wednesday as saying that it was an “omission” that Infraco was left out of government’s South Africa Connect broadband project.
Telecoms minister Siyabonga Cwele earlier this year named Telkom as the lead agency for the initiative, although one of Broadband Infraco mandates is rolling out broadband, especially in underserviced areas. Infraco had been hoping for a big slice of the South Africa Connect work.
Democratic Alliance MP Cameron MacKenzie has now called on Cwele to provide clarity on Infraco’s future, including how it will be funded from September onward.
“It is imperative that the entity has clarity on its funding in order to protect its assets, provide assurance to its customers, and secure its place as a pivotal player in the roll-out of broadband connectivity nationwide.”
MacKenzie says deputy telecoms minister Hlengiwe Mkhize did not provide specific answers in parliament on Tuesday about whether Infraco will be sold or merged with another entity. “With assets valued at approximately R2bn and a national fibre-optic network covering more than 17 000km, the company remains a critically important component of the government’s South Africa Connect programme,” he says.
Infraco’s customers including the State IT Agency and Cell C, which require certainty on Infraco’s “continued financial solvency”.
MacKenzie says the entity’s operations were hampered by its licence conditions that prevented it from being competitive in the market.
“Broadband Infraco should not be left to wither and die because of continued cabinet dithering on its future. It must immediately offer it for sale to the private sector so it can continue operations.” — © 2015 NewsCentral Media
