Former Telkom CEO’s warning about 10GB free data

The Sunday Times reports that former Telkom CEO Sipho Maseko has warned against removing the spectrum licences of network providers that don’t comply with government’s free data plans.

Maseko argued that this strategy could have significant investment implications on the sector.

“We are in such desperate need of growth in this country that we should be thinking very clearly from a policy perspective so that investors know what they’re committing themselves to,” said Maseko.

“Before you know it, you may end up wiping out a lot of value embedded in these companies because they’re publicly traded.”

“There are billions and billions in market cap where investors are invested in these companies with the hope that they will be deploying fibre or wireless and they’ll be growing,” he added.

Maseko said that state-funded organisations like the State Information Technology Agency, Sentech, and Broadband Infraco “should have connected all the schools, public hospitals and so on as intended when they were conceptualised.”

Khumbudzo Ntshavheni
Khumbudzo Ntshavheni, Minister of Communications and Digital Technologies

Maseko’s comments follow communications minister Khumbudzo Ntshavheni announcing at the State of the Nation debate that government plans to give every household access to 10GB of data per month.

She also said there would be major changes to network operators’ licensing conditions.

Those who fail to meet their social responsibility obligations would risk losing their precious radio frequency spectrum licences — raw wireless network capacity. Currently, operators pay a nominal fine for avoiding these obligations.

“Data has become a new utility like water and electricity that our home needs,” Nthsavheni said.

“At some point, South Africa will say… despite whether you are rich or poor, whether you are employed or unemployed, [every household will] have access to 10GB per month without failure because that’s what this government will deliver.”

“In the past, we have seen the telecommunications operators ignoring social obligations and opting to pay negligible penalties instead of connecting our people,” she continued.

“This time around [industry regulator Icasa] will include the fulfilment of service obligations as part of the licensing conditions without an option of a penalty.”

Ntshavheni also discussed the need for network providers to connect all public schools, clinics, hospitals, and traditional authorities at no charge.

“The extension of broadband to traditional authorities is part of government’s commitment to strengthen the role of traditional leaders as service delivery centres of government,” Ntshavheni stated.

As part of this connectivity drive, government is moving forward with SA Connect — a project focused on rolling out free Wi-Fi and providing broadband subsidies across the country.

The second phase rollout of SA Connect was approved in late January, and the Department of Communications and Digital Technologies is working with the National Treasury regarding funding.

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Former Telkom CEO’s warning about 10GB free data