Sentech Will Roll Out New Wireless Network
Sentech is reviving its telecommunications wireless business with the roll-out of a new network that will cost up to R2bn, with only 25% of that being funded by taxpayers. The state-owned signal distributor failed dismally in the broadband market with its MyWireless product, which cost millions of rands before it was cancelled.
Sentech chairman Quraysh Patel said last week that the company set aside R500m two years ago for a broadband wireless network, but it failed to take off initially because of a poor business plan.
The latest project is part of Sentech's new strategy that will see it exit struggling businesses such as Vivid, a satellite digital decoder that airs retail in-house radio stations and SABC stations in areas where there is no signal.
Sentech will focus on providing network connectivity, including broadcasting signals.
The new wireless network will be based on WiMAX technology, giving it wider coverage. The company already has the radio frequency spectrum needed for the technology. Patel said Sentech has the most "coveted licences" .
Sentech's plan is to partner with provincial governments and municipalities, which would buy capacity and sell to consumers. The income will cover the rest of the R2bn, Patel said. He said the network roll-out will depend on the needs of the provinces, but the primary focus will be on underserved areas.
Patel said the strategy is to reduce the cost of communications. "We want to bridge the digital divide. This requires low prices for consumers. The municipalities will have to guarantee certain price levels to consumers. I am confident that our plan will work. We are not going to retail, we are in the wholesale market targeting a specific market."
Patel took over at Sentech in April to turn around the ailing entity. The new board was forced to intervene in its day-to-day operations and Sentech's financial position has since stabilised, with cash resources of R232m for the six months to September. Patel expects the company to be profitable at the end of its financial year, in March.