South Africa Allocates $180 Million for High-Speed Internet Push

  • Government wants entire country to be covered in four years
  • State-controlled Telkom set to lead network expansion effort

The South African government allocated 2.5 billion rand ($180 million) for a push to roll out broadband networks across the country over the next three years, a potential boon to telecommunications carriers such as Telkom SA SOC Ltd.

The first phase of the project will provide eight sites with high-speed web access, Telecommunications Minister Siyabonga Cwele said in an interview on Tuesday. The government wants the entire country to have access to high-speed internet within the next four years.

“There is still a shortfall in our funding, but we hope to start rolling out broadband as soon as possible,” Cwele said. “We are sure additional money will come in as we start building.”

State-controlled Telkom is set to lead the push, though Cwele said the government wants carriers to collaborate on the infrastructure roll-out. Telkom’s competitors include MTN Group Ltd. and Vodacom Group Ltd., a unit of Vodafone Group Plc.

Still, hurdles remain, prompting the government to delay a formal announcement of the project’s lead service provider, originally slated for this month. There’s also a disagreement between the government and the country’s regulator over whether spectrum should be auctioned off. The two are set to appear in court next week as they seek a decision on the matter, Cwele said.

The government prefers an open-access spectrum model that includes mobile carriers sharing infrastructure, similar to how the industry operates in Mexico, Cwele said.

“We need to start sharing and not have this monopoly way of thinking,” Cwele said. “Companies need to start focusing on competing in terms of services, rather than infrastructure.”

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