Days before president Thabo Mbeki is expected to confirm the board of new broadband supplier Infraco, the Internet Service Providers' Association of SA (ISPA) has expressed its concern over the role it will play in local telecoms.

In a statement, the ISPA says that while its members had great hopes that Infraco will have positive spinoffs, it was disconcerting that government could end up having a stake in another telecommunications operator.
Government already owns 100% of Sentech, has a 38% stake in Telkom, as well as 30% of SNO Neotel through its Eskom and Transtel shareholdings.
The group says it remains hopeful that Infraco will potentially open up new opportunities for its members because the adjusted estimates of national expenditure released last year stated that "the intervention in national long-distance and international connectivity infrastructure should significantly reduce SA's broadband costs."
This, it adds, appears to suggest that Infraco will break Telkom's stranglehold on the market by allowing ISPs (Internet Service Providers) to purchase capacity directly from it.
"Specifics that need to be ironed out before the ISPA can wholeheartedly lend its support to the establishment of Infraco relate to licensing issues, shareholders, last mile access and particularly the relationship between Infraco and other state-owned enterprises," says the ISPA's co-chair, Greg Massel.
Trade & Industry Minister Alec Erwin said last year he planned to set up Infraco using the long-distance fibre optic networks of Eskom and Transnet. Minister of communications, Ivy Matsepe-Casaburri had earlier stated that Sentech would be used by her department to roll out wireless broadband services in rural areas.
Possibly the most urgent Infraco issue to be addressed is the fact that the licence conditions for Neotel would have to be changed.
Neotel's licence conditions had assumed that Eskom and Transtel's transmission assets would be owned by Neotel.
"Infraco is not necessarily a bad development, but we have to guard against an excessive government presence in the market," says Massel. "While it's encouraging that private players could be brought on board as shareholders and that government is serious about boosting SA's global broadband standing, a R627-million state intervention would make any industry nervous."