Joburg’s R500m broadband plan

7 March 2007

Johannesburg has invited companies to bid for a R500-million public-private project to build its own broadband network, joining a growing list of South African cities that are going it alone to provide their residents with cheaper voice and data services.

Other South African municipalities that are exploring their own broadband options, rather than relying on state company Telkom, include Cape Town, Tshwane (Pretoria) and eThekwini (Durban).

Last week, the city issued a request for information from interested companies that own or have access to a value-added network service licence to tender for the Joburg Broadband Network project.

The project is aimed at bringing down telecommunications costs in the city, as well as improving service delivery in areas ranging from traffic control to library services.

The Johannesburg metro municipality already owns telecoms infrastructure and has a private telephone network licence. The city plans to offer internet bandwidth at a lower cost to its departments, businesses and schools, and to cater for an expected increase in demand for bandwidth during the 2010 Fifa World Cup.

Speaking to Business Report, Douglas Cohen, a consultant in the city’s department of economic development, said Johannesburg would invest about R100-million in the project, with the private sector asked to finance the remaining R400-million.

The city expects the private partners to make money from the project through selling its spare capacity to businesses and consumers, and possibly also charging the municipality to use the network.

“They are getting access to start a new network. They could become a wholesaler of lower-cost telephony and data and they will have the city as an anchor client,” Cohen said.

According to Business Day, Cohen expects the country’s large telecoms and IT companies to bid for the project, as well as smaller IT firms, possibly in partnership with foreign investors.

Because of the size of the municipal area, Cohen said the contract might have to be divided between more than one bidder, and a variety of technologies are likely to be needed for different areas.

As such, Johannesburg City Power is backing the project, as it is likely to include internet connectivity over powerlines, which they have been experimenting with.

“The purpose of the broadband project is primarily to build a strong information technology infrastructure for the city and to bring information and communications technology closer to citizens at a cost-effective price,” Jabulani Zimu from the office of the city’s chief information officer told Business Report.

The city expects to appoint the successful bidder for the project before the end of 2007.

SouthAfrica.info reporter

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