[ Home ] [ Speeches & statements ]

20 November 2007

One of the most important infrastructure systems in a modern economy is that of telecommunications and more particularly the broadband capacity of that system. Broadband is the capacity to move very large amounts of information very quickly. This essentially requires a range of information and communication technologies. Fiber optic cables are particularly important as a means of transmitting information and these cable systems form the basic spine of broadband.

This broadband capacity is so strategic to our economy that the State is intervening through the formation of Broadband Infraco. The intervention seeks to address the high cost of broadband in South Africa, by making infrastructure in the national backbone and international connectivity available at cost related prices.

The high cost of broadband in this country, and the limited access of this technology to all South Africans, hampers our country's participation in the global economy. Telecommunications and internet connection charges have been identified as key barriers to doing business in South Africa, and attracting more investment into the country.

If nothing is done about this, our country will get left behind, and we may miss out on key investment opportunities which could further accelerate economic growth, and create more employment opportunities for our people. There has been criticism, perhaps due to lack of understanding that government wants to nationalise the telecommunications industry. This could not be further from the truth.

Government's intention is not to operate Infraco on a long-term basis. Once we are satisfied that long-distance tariffs have normalised at internationally competitive levels government will be able to reconsider the precise role it should play in the industry. What we are addressing an obvious market failure, a task which we cannot guarantee can be undertaken by the private sector alone.

Broadband Infraco will provide telecommunications network infrastructure across South Africa, and other organs of State such as Sentech and the Universal Services and Access Agency of South Africa (Usaasa) will tap into this infrastructure to provide services to all areas, including the rural parts of the country, as per their mandate. Throughout the Parliamentary bill process, the Department has assured all stakeholders of its commitment to assist these entities through Infraco.

The imminent 2010 Federation International Football Association (Fifa) World Cup is among several key national projects which require large amounts of broadband capacity, and it is incumbent upon the State to act speedily to ensure that this is available, so that the growth and development of our country is not compromised.

Bridging the gap between the first and second economy remains on the top of our agenda, and in this regard, telecommunications will play a key role.

Issued by: Department of Public Enterprises
20 November 2007
Source: Department of Public Enterprises (http://www.dpe.gov.za)