September 5, 2017 / 10:15 AM / 3 months ago

South African cabinet to review plan to merge state-owned telecom firms

CAPE TOWN, Sept 5 (Reuters) - A plan to merge two of South Africa’s state-owned telecom firms into a single broadband network company will be reviewed by the cabinet in December, a senior government official told lawmakers on Tuesday.

The government hopes to combine the fibre network and high-speed bandwidth capacity of Broadband Infraco with Sentech’s satellite capability, boosting connections to remote areas as it aims to lift mobile broadband coverage to 80 percent of the population by 2019.

“We don’t want a top-heavy company, but a company that has sharp capacity to aggregate what exists in South Africa so we don’t duplicate,” said Robert Nkuna, director-general at the Department of Telecommunications and Postal Services.

Nkuna told a parliamentary committee the law would need to be amended to allow for the establishment of a National Broadband Network Co (NBN) by around 2020.

The firm will be able to strike access agreements with state-owned firms, such as power utility Eskom, and eventually private sector firms, said Nkuna.

“We don’t see the NBN as a monopoly,” he added.

Responding to a question, Nkuna said the department was not in favour of selling off Sentech, which carries more than 90 percent of South Africa’s radio and television signal, to the private sector to help fund the new company.

Major telecoms firms in South Africa include the continent’s top mobile phone operator MTN, Vodacom and unlisted Cell C. The five main firms in the wireless broadband market account for more than 70 percent of the market.

According to a World Bank report released last year, South Africans paid around $14.10 for one gigabyte of data, the fourth highest out of 17 African countries, compared to lowest-rated Cameroon, where the same bundle cost around $2.10. (Reporting by Wendell Roelf; Editing by James Macharia and Mark Potter)

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