On Zuma, broadband and policy failure

South Africans should welcome the fact that Jacob Zuma has not committed to spending more than he has on a state-led broadband project. Government should not be leading such a project. By Duncan McLeod.

Duncan-McLeod-180-profilePresident Jacob Zuma has drawn criticism for his failure to deal meaningfully with broadband roll-out in his 2016 state of the nation address delivered in parliament on Thursday evening.

Throughout his more than hour-long speech, the president mentioned the word “broadband” only twice, and then only in passing.

The most substantive thing he said was: “Government will fast-track the implementation of the first phase of broadband roll-out to connect more than 5 000 government facilities in eight district municipalities over a three-year period.”

He then added: “Funding to the tune of R740m over a three-year period has been allocated in this regard.”

Analysts immediately pointed out that R740m was nowhere nearly enough to meet the ambitious targets of South Africa’s broadband plan, SA Connect, which could cost tens or even hundreds of billions of rand to implement fully.

Democratic Alliance MP Marian Shinn immediately tweeted: “No hint of more money for SA Connect. Same budget of R740m as last year. ANC fails the national demand for high-speed broadband.”

But I don’t think it’s a bad thing that government isn’t committing tens of billions of rand in taxpayers’ money to build a state-led telecommunications network similar to Australia’s hopelessly over-ambitious and highly controversial National Broadband Network.

For one thing, we’re not Australia — we simply cannot afford it. South Africa does not have the money.

Secondly, government is trying to fix a problem that would be more efficiently solved by the private sector — provided the right policy and regulatory environment was created with the right amount of carrot and stick to get operators to focus on underserviced areas as much as they do on South Africa’s urban centres.

There are a number of ways of doing this. One of the best I’ve come across is the German model, where, in exchange for receiving access to radio frequency spectrum for 4G broadband, mobile operators first had to build high-quality coverage in the rural and underserviced parts of that country. Only then could they use the spectrum in the cities.

This had the effect of lighting a fire under the operators to build their rural coverage as rapidly as possible so they could start dealing with pent-up demand in the cities. There’s no reason to believe it wouldn’t work here, provided the rural coverage commitments are sensible, not onerous, and communications regulator Icasa is sufficiently resourced to police it.

President Jacob Zuma

President Jacob Zuma

But doing this requires the creation of a policy framework on spectrum allocation. Despite promising such a policy paper for years, the department of communications — now the department of telecoms & postal services — has failed to come up with one.

It’s difficult to understand what’s taking so long. Certainly, management instability in both the department and the ministry can’t help. But there appears to be little political will to develop the policy. One has to ask, why? This stuff is not rocket science. And the department can appoint expert advisers to help it make the right decisions quickly.

Plenty of studies, from organisations such as the World Bank, have shown that allocating new spectrum — especially the “digital dividend” that gets freed up when terrestrial television broadcasters move to digital signals — has a direct impact on economic growth.

While government toys with the (unaffordable) idea of building its own national network — by paying Telkom to construct it — in order to address what it believes is the market’s failure to roll out affordable broadband to everyone, it has unequivocally failed in its duty to create a favourable policy environment to encourage investment by the private sector.

South Africa can’t afford rich-country experiments in broadband. There are plenty of case studies from the rest of the world about what works and what doesn’t. Let’s get the basics right first and see where that takes us.

  • Duncan McLeod is editor of TechCentral. Find him on Twitter

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  • Greg Mahlknecht

    Broadband Infraco failed, so you know what would be a GREAT idea? Repeat that model, but be even more ambitious this time. And to add a bit more of a challenge, let’s put all our eggs in one basket appoint a company with a terrible track record doing the job!

    Seriously. These clowns have to go.

  • William Stucke

    I like your approach, Duncan. It’s good that Government is NOT spending lots of (our) money on this.
    And of course you’re perfectly correct about Government’s failure to draft a coherent spectrum assignment (not allocation, BTW) policy for as long as we can remember. Indeed, I’d go one better. The DoC has actively obstructed the process of assigning high demand spectrum for the last decade.
    See Alison Gillwald’s paper or my presentations for proof and details.

  • Ofentse Letsholo

    I just read about Australia’s NBN which at first was estimated to cost A$43 billion(R493 bill) but later revised down the cost in its business plan to A$37.4 billion(R429 bill). Yeah we cannot afford that indeed, we still have a long way. I do agree with you on that German method of getting private sectors giving proper quality infrastructure before being given spectrum but knowing companies like MTN especially they would charge consumers insane money for that saying “we also paid for the infrastructure to give you this type of quality”.

    Internet for all will not be reached by 2020 maybe by 2034, this is SA and we know how it operates. The struggle for spectrum still continues which big players are crying about.

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