Broadband Infraco’s price-cut plans
The high cost of broadband in South Africa has long been highlighted as a handbrake on the local economy. According to the Department of Public Enterprises (DPE) ‘broadband is viewed as a key driver of economic growth and wealth generation and it is therefore essential for SA to gain access to universally available, reliable and affordable broadband’.
Government’s solution to the broadband conundrum is a state owned entity, Broadband Infraco, which will provide affordable long-haul bandwidth on a wholesale basis. According to the DPE, Infraco has the mandate to both supply capacity and bring down the cost of broadband.
“Infraco will provide and own the long-distance Full Service Network (FSN) deployed by Eskom and Transnet. Infraco is now a stand-alone entity reporting to the Department of Public Enterprises.”
Broadband Infraco is a state owned enterprise with the Department of Public Enterprises (74%) and the Industrial Development Corporation of South Africa Limited (26%) as shareholders. According to the parastatal it’s primary focus will be on the wholesale, large corporate and enterprise markets. The company made it clear that it will not be an access provider in the retail space.
“Broadband Infraco will provide wholesale long distance access services to third party electronic communications services (ECS) and electronic communications network services (ECNS) providers in South Africa,” Infraco said.
Broadband Infraco added that they will have a strong focus on providing wholesale backhaul connectivity to former under-serviced area licensees (USALs). This, Broadband Infraco said, will help empower historically disadvantaged individuals (HDI).
Broadband Infraco will focus its operations on two key areas: owning & operating a national long distance fibre optic network and participating in an international connectivity initiative. This network will then be used to provide telecoms licensees with “significantly lower but financially sustainable prices”.
“The Broadband Infraco pricing strategy will deliver wholesale ECS on a cost plus basis to the market, with sufficient profit margin for Broadband Infraco to be financially sustainable and self funding for network expansion purposes in the future,” Infraco said.
The company has already invested significantly in new infrastructure, but is planning more projects, including extensive network expansion to deliver backhaul capacity to underserved areas.
Broadband Infraco price cuts – give your views
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