Sentech minds its knitting
SENTECH probably withdrew its bid for a pay-TV licence to let it concentrate on building a wireless broadband network for rural areas and on migrating its national broadcasting networks from analogue to digital technology in time for the 2010 World Cup.
The state-owned signal carrier has not clarified why it scrapped plans to enter the pay-TV arena, but CEO Sebiletso Mokone-Matabane said it was focusing on the broadband network and digital migration.
Sentech was “very busy” with those two projects, and did not want to compromise the services it already offered its clients, she said.
Those two tasks already pose major challenges, since Sentech has retrenched numerous staff to slash its costs and saw many experienced technicians quit for more stable employment. Mokone-Matabane acknowledged the skills shortage, but said it was on target to convert television broadcasting to digital systems by November next year.
In the past financial year, Sentech’s revenue rose from R665m to R723m, but it suffered a net loss of R21,5m. That was an improvement on the loss of R76m a year ago. “We have had a remarkable year compared to previous years,” said chief financial officer Siddique Cassim.
The government has finally granted the cash-strapped company R500m to begin rolling out a national wireless network, although R4,4bn is needed to do the job properly. Sentech has been waiting for the cash since early this year, when its broadband plan was denied any money in the budget, but Finance Minister Trevor Manuel indicated it might be able to tap into a R3bn contingency fund.
Cassim said the government would need to provide R3,2bn to build the network over the next 10 to 15 years, before it gradually became self-financing. It will chiefly take basic telephony and internet access to hospitals, schools and rural communities that are not commercially viable for private sector players to tackle.
One problem for Sentech is that the new state-owned company, Broadband Infraco, is now competing for cash to extend another national telecoms network based on facilities owned by Transtel and Eskom. That means Sentech is unlikely to be granted cash for its own broadband plans every year.
Asked whether it would not make more sense for the government to fold the wireless and fibre optic networks into one entity, rather than have two bodies fighting for the same cash, Mokone-Matabane said there had not been any serious discussion about that.
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