Cwele: Broadband more important than revenue

2016-05-11 14:24 - Duncan Alfreds, Fin24
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Minister Siyabonga Cwele addresses the media on broadband policy. (Duncan Alfreds, Fin24)

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Cape Town – Government has expressed its desire to forsake revenue over broadband access as it races to meet its self-imposed goal of universal internet by 2020.

Mobile operators are awaiting policy direction on the availability of 800MHz spectrum, which is key for the deployment of high speed 4G networks.

“There has been a lot of debate on whether we should auction this spectrum: The key principle is that as government, we are not looking to making a kill out of this natural resource,” telecommunications and postal services minister Siyabonga Cwele told the media following his department’s budget vote on Tuesday.

“We are really looking at making sure that it supports that sharing - we are not looking to raise money through it,” he added.

Internationally, countries auction spectrum to generate revenue from mobile operators who then recoup costs from subscribers.

Local mobile data prices have come under the spotlight because of the high cost to communicate.

In SA, mobile users spend about 24.7% of income on mobile services, above the International Telecommunications Union guideline of 5%, Research ICT Africa has found.

Compensation

READ: Cwele: SOE cost-cutting plan underway

Top mobile operators Vodacom and MTN have an 80% market share in SA but charge more for access relative to their competitors.

Research ICT Africa found that Vodacom charges R122 for an OECD basket of calls and SMSes, MTN charges R76, and Telkom Mobile charges R53.

In 2015, Vodacom invested R13.3bn and MTN invested R10.9bn into their South African network operations.

READ: Here’s why SA data prices won’t come down soon

Cwele said that despite insisting on sharing, the government believed that mobile operators should receive compensation for investments into next generation networks.

“We are also saying that those who invest in those common or shared networks: They must be adequately compensated for their investment.”

Some of the strategies may include tax incentives for delivery in rural areas as well as changes to the Universal Access Fund.

“We are changing the format of that fund so that the money we are collecting should really be invested in the infrastructure rather than just being put in the National Revenue Fund,” Cwele said, adding that his department has been in discussions with National Treasury on the proposal.

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