Supplementary Budget 2020

Nene allocates R1.1bn for SA broadband

Broadband internet. (Duncan Alfreds, Fin24)
Broadband internet. (Duncan Alfreds, Fin24)

Cape Town - Finance Minister Nhlanhla Nene has allocated R1.1bn to the expansion of broadband connectivity in his inaugural budget speech on Wednesday.

Nene allocated the amount for "broadband connectivity in government institutions and schools", but analysts are sceptical because of the lack of details regarding the implementation of the proposal.

"It's a good thing to do, and I really need to have it in context: Which government institutions and which schools and over what period of time?" Adrian Schofield - from the Board of the Institute of IT Professionals - told Fin24.

The broadband roll-out in South Africa is part of critical government policy as the country eyes 100% connectivity by 2020.

However, during his chaotic State of the Nation address, President Jacob Zuma spent less than a minute explaining how government was going to go about rolling out broadband, especially in rural areas which often don't even have access to 3G connectivity.

Universal broadband

According to the former department of communications' presentation to the Portfolio Committee on Communications, in 2013, 33.3% of the South African population had internet access.

However, the department (now renamed the Department of Telecommunications and Postal Services) submitted ambitious targets of 50% access at 5mbps by 2016, 90% by 2020, and 100% at 10mbps by 2030.

It is unclear how far the amount of R1.1bn will go in driving the country toward to goal of universal broadband.

"This is an allocation specifically earmarked for a specific technology within the overall budget and it's a very small percentage against a very key component," Mark Walker, IDC Middle East, Africa & Turkey associate vice president for Sub-Saharan Africa told Fin24.

Mobile broadband will likely drive connectivity for South Africans. (Duncan Alfreds, Fin24)

In Gauteng the massive 900km Johannesburg Broadband Network project is budgeted at R3.4bn and Walker expressed his surprise at the R1.1bn allocated by Nene.

"It's surprising that only this much has been allocated and it's being shared between government and schools."

The South Africa Connect: Creating Opportunities, Ensuring Inclusion South Africa's Broadband Policy hints that government will partner with private sector investors to roll out broadband services in SA.

Broadband deadline

"Funding requirements for the effective roll-out of broadband are beyond the capacity of either the government or the private sector alone," says the document.

In particular, the policy highlights Telkom's closed network as not being conducive to competition in the broadband space.

"In the fixed market Telkom is the sole provider of ADSL lines, though again there is some resale by ISPs. Whilst prices have come down, they remain high by global standards.

"As a result South Africa only has 800 000 ADSL subscribers; a very low number for a lower middle-income country. Despite the fact that limited penetration of fixed-line copper networks constrains the availability of ADSL in all parts of the country, over 1.2 million ADSL lines lie fallow."

Schofield said that the government would probably miss the broadband deadline as envisioned in policy, and also questioned the impact of the allocation.

"This is activity that should have been completed long ago and I have no idea off the top of my head how far R1.1bn will go in achieving the objective which is that every government office of any sort at any level should be connected to broadband."

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