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State lets Sentech down on funding

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Sentech, which is expected to carry the national television signal, upgrade its network to accommodate the new digital signal and provide wireless broadband connectivity, is being hamstrung by a lack of funding from government – which further prevents it from raising cash in the private sector. 

The organisation yesterday came out with a statement detailing its financial woes and government about-turns.
Chairman Colin Hickling went as far as to state that the funding dilemma could compromise the signal carrier's ability to function as a going concern.
Yesterday's statement attributes Sentech's challenegs to both funding and the policy environment.
Last month Sentech received R500-million from the Treasury, but this is a far cry from the R3,1-billion that will be required – and there is no sign that any more funds are forthcoming.
Hickling states that its has applied for R955-million for the digital network, of which R200-million was allocated and a further R450-million promised – leaving a shorfall of R300-million.
The company has also applied for total funding of R224-million in both capital and operating funds to provide satellite services in support of South Africa’s contractual obligations for the FIFA 2010 World Cup. R300 million has been allocated for the next two years.
For Sentech's participation in the undersea cable project, R140-million was requested and R21-million allocated so far.
"While the commitments to date of National Treasury are encouraging, it can also be seen that a persistent lack of funding over the past five years has resulted in Sentech being unable to maintain and expand the broadcast network and to optimally operate the two licences," Hickman states.
Sentech has reported losses of R73,3-million in 2004, R93,2-million in 2005, R85,3-million in 2006 and R21,5-million in 2007.
The company has proposed a number of funding options, which would allow it to function efficiently, but government has rejected them all.
In terms of the policy, the statement points out that the regulatory environment has changed significantly since Sentech was awarded the Carrier of Carriers and Broadband licences in 2002, with the Electronic Communications Act (ECA) opening the market to new players.
In addition, the establishment of Infraco is seen as a "direct competitor" to Sentech.