SENTECH: WEIGHING UP ITS OPTIONS
Sentech, which manages SA’s largest terrestrial radio and television transmitter network, was granted a licence two years ago to build a "multimedia" (Internet access) network to compete with Telkom. Because of a lack of funding, though, the network has only very limited coverage.
The company says there is demand for the service, especially given the recent introduction of new products, but that most of the demand is coming from areas where it has no network coverage.
Sentech chief operating officer Gladwin Marumo says the company will now put three options to government:
* That a new company be created with third-party shareholders, who will provide funding in return for their equity. Sentech would retain a majority stake in the new firm;
* That government directly finance the development of the MyWireless network; or
* That a public-private partnership be created, as defined in the Public Finance Management Act.
"The minister of communications and her colleagues in the treasury, the department of trade & industry and the department of public enterprises will have to exercise their minds," Marumo says. "All we are doing is giving them options. It’s really out of Sentech’s hands now."
Marumo says Sentech needs R1bn to extend MyWireless network coverage to 80% of the population.
But government could find this spending hard to justify, especially given estimates by Sentech that it will need between R2bn and R4bn from government if it is to replace SA’s ageing analogue broadcast network with modern digital terrestrial television and digital audio broadcasting transmitters.
© Financial Mail, 2005
Reproduced with the permission of the Financial Mail
Subscribe: http://subscribe.financialmail.co.za/
Loading ...