Cheaper broadband on the way

24 October 2007

The information communication technology (ICT) sector is an important contributor to the growth and development of South Africa’s economy, but high broadband costs and limited internet access have hampered the country’s participation in the global economy, says Public Enterprises Minister Alec Erwin.

Addressing local businesspeople at the Ugu District Municipality in KwaZulu-Natal on Tuesday, Erwin said the ICT sector was also an important part of the Accelerated and Shared Growth Initiative for South Africa (Asgi-SA) due to its potential for creating jobs.

Erwin said that a study undertaken by the government in 2005 found that South Africa lagged behind its international counterparts in areas of information and telecommunications service penetration, as well at the rate at which new technologies were adopted.

Erwin added that broadband penetration in the country was also lower and cost significantly more in relation to international benchmarks, and that the problem had to be addressed.

“If nothing is done about this, our country will get left behind, and we may miss out on key investment opportunities which could further accelerate economic growth,” he said.

Broadband Infraco Bill
Erwin told delegates he was pleased that the National Assembly had passed the Infraco Broadband Bill, which creates a new company out of telecommunication infrastructure previously owned by Transnet and Eskom, and allows the government to leverage communications infrastructure for economic growth.

“Broadband Infraco is an intervention that aims to address the cost of broadband by making infrastructure in the national backbone and international connectivity available at cost,” he said. “Ubiquitous, affordable broadband access should no longer be seen as the privilege of a few, but a basic right for all South Africans.”

He said such an investment was unlikely to have been made by the private sector and, as such, it was up to the state to “address a glaring market failure” and bring broadband to the country’s under-developed and under-serviced areas.

Erwin pointed out that areas such as the Ugu district, which have low ICT penetration, have the most potential to benefit from the establishment of an entity such as Infraco.

The Ugu district is situated 20km south of Durban. It stretches from Scottburgh in the north to Port Edward in the south and 150km inland.

ICT would provide for immense possibilities for education, training, skills development, job-creation, basic service delivery, and broad-based black economic empowerment (BEE), especially among youngsters in the region, the minister said.

He added that development of the ICT sector in the Ugu district would impact positively on the agriculture and tourism sector, which are currently the key industries for growth and development in the region.

“This is why we have decided that parts of the undersea cable will be constructed on this coast, in this area which was declared a presidential poverty nodal point in 2001, and requires assistance to accelerate skills development, job creation, and broader participation by all its inhabitants in accelerating economic growth and development.

“To retain skilled labour in the region, and limiting the migration of its educated workforce to the bigger cities by developing the ICT sector, is crucial as it will contribute to its economic development.”

Source: BuaNews