Why public SA government-owned broadband is a bad idea

Right2Know launched two research reports on 23 June, which show the relative high cost to communicate for low-income households in South Africa and present alternatives to privatised telecommunications.

It’s no secret that telecommunications, and specifically broadband in South Africa, is slower and more expensive than it is in other countries.

However, the alternatives presented in Right2Know’s research for large-scale networks require government involvement, and that is a risky proposition.

The South African government has an atrocious track record when it comes to broadband projects, and relying on it to provide broadband services for the country will not end well.

Right2Know’s “Alternatives to Privatised Telecommunication” reports use examples from Sweden, Venezuela, and Uruguay to illustrate how nationalised infrastructure could be used to drive down costs and connect under-serviced areas.

Not mentioned is that many of the initiatives described in the report have already been attempted in South Africa, with little to no success.

Failed government telecoms projects

Sentech MyWireless is one example of a noble attempt by the government to bring competition to South Africa’s broadband space during a time when Telkom’s 512kbps ADSL service with 3GB cap was as good as we got.

Launched in 2004, and lauded as a “strategic national asset” by former Minister of Communications Ivy Matsepe-Casaburri, Sentech was to be the core of a national wireless broadband network.

On 30 November 2009, Sentech MyWireless was shut down.

Similarly, local governments in South Africa have built metropolitan fibre networks, but these have failed as a mechanism to reduce costs and prevent the duplication of infrastructure.

The government has also split its national backhaul infrastructure which was given to Neotel to use into the state-owned company Broadband Infraco.

Another initiative launched by industry regulator Icasa called Under-services area licenses was also not effective in bringing affordable broadband to South Africans.

The infographic below compares the government’s telecommunications initiatives to those from for-profit companies, including parastatal Telkom.

Public vs Private telecoms services in South Africa
Public vs Private telecoms services in South Africa

If it’s one thing the South African government has demonstrated time and again, it’s that when it comes to telecommunications it is incapable of putting up and running effective networks.

Furthermore, by trusting the government with the nation’s telecommunications infrastructure you would effectively create a monopoly that not only sets policy and guides regulation, but also runs the companies that provide services.

Considering how South Africans have languished under Telkom’s uncontested monopoly until mobile operators and other fibre infrastructure players brought some much-needed competition, a government-dominated sector is a bad idea.

What South Africa needs is an unfettered, highly competitive private telecommunications market with effective regulation.

This can drive connectivity to under-serviced areas without bringing down the quality of services elsewhere in the country, and ultimately drive down prices.

Community-driven broadband services

Communities around the country have already started taking their broadband futures into their own hands.

For example, neighbourhoods like Parktown, Parkview, and Constantia have already got fibre infrastructure providers to bid on rolling out services to their suburbs.

While these initiatives seem to be mostly contained in wealthy areas, they are not limited to more well-off South Africans. Neither are they limited to only for-profit initiatives.

The Soweto Wireless User Group recently launched a Wi-Fi network that offers free Internet access to Soweto residents.

Project Isizwe, a non-profit headed up by Alan Knott-Craig Jr., has been employed by local governments to roll out free Wi-Fi networks in cities around South Africa.

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Why public SA government-owned broadband is a bad idea