Johannesburg - South
Africa is considering a merger of
state-owned technology companies Broadband Infraco and Sentech to help to
accelerate the rollout of high-speed internet to the population within three
years, according to two people familiar with the matter.
The combined entity will be expected to extend broadband to
rural communities that don’t yet have access, said the people, who asked not to
be identified as the plans haven’t been publicly announced. Broadband Infraco
is the country’s second-largest fixed-line operator after Telkom SA SOC, while
Sentech has wireless broadband assets and operates signals for South Africa’s
broadcasting companies.
The government is “pursuing the rationalization of state
broadband assets to reduce the duplication of infrastructure and mandates of
state-owned companies,” Siyabulela Qoza, a spokesman for the Telecommunications
Ministry, said in emailed comments on Thursday. “It will help to fast track the
expansion of access to modern communications infrastructure and services to
more South Africans.”
“We are not in the position to provide information,” Sentech
spokeswoman Milisa Kentane said in an emailed response to questions. Broadband
Infraco didn’t respond to a request for comment.
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South Africa’s
telecommunications industry regulator announced the auction of new broadband
spectrum last year to address a shortage of high-speed internet in Africa’s most-industrialized economy, although the move
was later opposed by the Telecommunications Ministry and the two parties have
been unable to reach a compromise. Wireless carriers including Vodacom Group
Ltd. and MTN Group are seeking spectrum to boost revenue from internet and data
services as voice sales decline.
South Africa
is one of the world’s stragglers in internet access with just 2.63 fixed-line
broadband subscribers per 100 people in 2015 compared with 12.25 in Brazil and 30.66 in Japan, according to figures
compiled by the World Bank.
Talks between Telkom and the government about buying
Broadband Infraco fell apart last year when no agreement could be reached on
price. Vodacom, the leader in the South African mobile market, has also
expressed an interest in the company in its search for additional spectrum.
The Telecommunications Ministry must start the first phase
of its broadband program by August and begin spectrum licensing by
December, Finance Minister Malusi Gigaba said on Thursday when he announced
a 14-point plan to pull the economy out of a recession.
BLOOMBERG