South African fixed-line incumbent Telkom is in partnership talks with state-owned fibre provider Broadband Infraco, which is tasked with deploying infrastructure in underserved areas.The move comes amid impending broadband target deadlines as well as a challenging economic climate.
South African fixed-line incumbent Telkom (JSE:TKG) is in partnership talks with state-owned fibre provider Broadband Infraco, which is tasked with deploying infrastructure in underserved areas.
Siyabonga Cwele, minister of telecoms and postal services, was cited telling Business Day that such a move would be part of an “urgent” government rationalisation process.
The cash-strapped unit could become part of Telkom or its recently created infrastructure business, Openserve, or partner in a joint venture.
Broadband Infraco has reportedly been pitched to private companies, which are interested but reluctant to pay market value, hoping for continued government subsidies.
A Telkom spokesperson was quoted saying the company was open to value adding collaborations.
Broadband Infraco has 14,000km of fibre, while Telkom has 147,000km, more than ten times as much. In 2015, it reportedly asked the government for R1bn (US$64.5m) in further funding.
The government’s South Africa Connect plan, announced in 2013, aims to connect 50% of the population to broadband at 5 Mbps by 2016; 90% of the population at 5 Mbps and 50% at 100 Mbps by 2020; and 100% at 10 Mbps and 80% at 100 Mbps by 2030.