The Development Bank of Southern Africa (DBSA) has agreed to invest R50-million to support local broadband service provider, iBurst’s nationwide network expansion.
Simon McGill, DBSA's principal investment officer on the project, says: “DBSA has a mandate to advance economic growth and regional economic integration and it considers ICT development as a key enabler of this goal. As such, DBSA is delighted to help facilitate iBurst’s network expansion throughout South Africa.
“Furthermore, with iBurst being a black-owned enterprise, DBSA’s investment in the project is also in line with the bank’s mandate to drive broad-based black economic empowerment (BEE), particularly in the ICT sector where transformation has been sluggish.”
According to McGill, DBSA will fund half of the total capital expenditure of R100-million that has been earmarked for infrastructure expansion. Investec will fund the other half.
He explains that iBurst already has 76 live base stations across the country but, with its subscriber-base expanding rapidly and to comply with its licensing obligations to the Independent Communications Authority of South Africa (ICASA), extending and expanding its transmission infrastructure has become a top priority for iBurst.
“With almost 1 800 new subscribers signing-up every month, iBurst needs to expand its network to meet this growing interest and demand for broadband internet services.
“Also, in terms of its licence obligations, iBurst is expected to provide internet connectivity to 1 000 public schools and further education and training institutions in previously disadvantaged areas,” says McGill, adding that this also fits the DBSA’s policy to make ICTs more accessible to previously disadvantaged communities.
“Unfortunately, infrastructure rollout of telecommunications and ICT is skewed towards urban areas at the expense of under-serviced areas. The result is that the overwhelming majority of South Africans still do not have access to ICT services. This project will help extend the development impact of information technology to previously disadvantaged communities,” he says.
iBurst director David Hilewitz comments: “The transaction went smoothly and within the same time frame of approval as any other private sector finance institution."