Broadband costs have to go down – Minister

The Department of Communications is still aiming to achieve 100% broadband penetration by 2020, a promise initially made by former minister of communications Radhakrishna “Roy” Padayachie, and affirmed on Tuesday by Dina Pule, who has been in the role since October 25 2011.

With multiple new undersea cables coming online in the next year and a half, more people will have access to broadband and hopefully at lower prices, which are still regarded as among the highest in the world. Where the Seacom cable increased the country’s undersea capacity when it was launched in 2009, the West Africa Cable System, the Africa Coast to Europe cable and the South Atlantic Express cable combined will boost broadband capacity by a further 360%.

Pule told Moneyweb in an interview that more needs to be done to decrease broadband prices.

“There are a number of ways we can decrease the cost further. We’ve brainstormed about it in the department just this past week. It (the prices) has to be brought down further,” Pule said.

The deputy-director general of the department, Themba Phiri, said it is requesting Icasa to come up with a programme to be presented to Parliament from its completed study on the cost to communicate.

“Interconnectivity fees have to go down even further and we are also looking at landline and bundled services costs. All of these need to be brought down and we want the operators to commit to doing this,” he said.

The department is currently busy with a broadband mapping study to identify the existing broadband infrastructure and services gaps.

“For us to get 100% penetration of broadband we will have to work with the private sector. We are using the ICT Forum to engage with the industry, but it will take a substantial investment running into billions of rands to achieve this goal. We need to do a proper impact study and also need to find out how much the private sector is willing to bring to the table in terms of investment,” Pule said.

Phiri said figures of around R75bn have been mentioned, but that the department wants to finish its own impact study first before requests for funding are made to Treasury.

According to an OECD study released in December last year, South Africa’s broadband subscription penetration is currently only around 1.6 subscriptions per 100 inhabitants.

Pule quoted research by the International Telecommunications Union that for every 10% increase in broadband penetration, a 1.3% increase is achieved in the gross domestic product. The aim is to create 160 000 jobs just through broadband by 2020.

With regards to South Africa’s migration from analogue broadcasting to digital terrestrial television (DTT), Pule announced that the public launch will definitely not take place in April of this year anymore, as promised by former minister Padayachie, but will be postponed to the third quarter of 2012.

She said that the department has finalised the amendments to the 2008 Broadcasting Digital Migration Policy and that it will be gazetted later this month. The policy will then fast-track the finalisation of the DTT regulations by Icasa.

“We have also finalised the Set-Top-Box Manufacturing Strategy and the Scheme of Ownership Support Rollout Framework and these are scheduled to be presented to Cabinet next month,” she said.

The finalisation of the national DTT Standard for South Africa by the South African Bureau of Standards is at an advanced stage, the minister said.

“Once the standards are finalised, hopefully by March 2012, we will be able to look at issuing the tender for the manufacturing and distribution of the set-top boxes.”

The cut-off date for migration was set as December 2013, which meant that as from January 2014 the only means to broadcast programmes on terrestrial frequencies would be digital.

Pule said that this cut-off date will also be affected.

“We will try our best, because when we engage with the manufacturers we realised they will need some time to manufacture all the boxes, so the date may be affected. However, we are going to try together with the industry to make sure that even if the date is affected that it doesn’t go way beyond the expected date.”

Over R1bn has been set aside by Treasury for the migration to digital television and is split between the commercial enterprise Sentech (R622m), the Universal Service and Access Agency of SA (Usaasa) (R220m) and the SABC (R158m). Usaasa has recently been plagued by financial maladministration, so much so, that five senior managers were suspended and the board’s term of office had been terminated.

Source: Moneyweb