Telkom and Broadband Infraco are reportedly in talks over “possible collaboration” as government moves to minimise duplication between state-owned enterprises.
Telecommunications & postal services minister Siyabonga Cwele said in an interview with Business Day that the two companies are in discussion about how they could co-operate on infrastructure projects.
The rationalisation process was “urgent” for Infraco, Cwele is reported to have said.
Broadband Infraco, which was the brainchild of former public enterprises minister Alec Erwin, has struggled for years to turn a profit.
The company was established to create a national telecoms backbone to compete with Telkom, which had a monopoly at the time.
News of the talks with Telkom comes after Infraco last year appealed to government for a bailout to continue its operations. In September 2015, it said it required an urgent cash injection of R243m, and asked for a further R932m in funding until 2019.
Government holds a direct 74% stake in Infraco; it has a direct 40% stake in Telkom, which is listed on the JSE.
Meanwhile, Cwele reportedly said in parliament on Tuesday that government intended adopting a “use it or lose it” principle in its policy on radio frequency spectrum, which it has promised to publish by the end of March.
According to Business Day, Cwele told parliament’s portfolio committee on telecoms & postal services that there was a need to review the structure of the market to determine whether infrastructure should be shared through a “common carrier” network and whether it should allow duplication of infrastructure. — (c) 2016 NewsCentral Media
