The ANC spent its early years in government shielding Telkom from competition based on the idea that the company, which had been partly privatised in the 1990s, wouldn’t deploy services in rural areas if it wasn’t protected from the vagaries of the free market.
The prevailing theory — in the ruling party, at least — was that the private sector would never connect underserviced areas of its own volition. It just wasn’t profitable.
The experiment failed. Telkom, with a sophisticated foreign management team, jacked up prices under the rubric of “tariff rebalancing”. Soon, the wireless voice services it did roll out in underserved areas were abandoned in favour of cellphones, which, while certainly not cheap back then, offered the convenience of being contactable on the go. It turned out poor people wanted the convenience of mobility too, even if it was at a price premium at the time. The government, not for the first or last time, had failed to predict what the market desired.
Progress in connecting the poor has happened not because of the ANC government but in spite of it. Whether it was the underserviced-area licensees or the wholesale open-access network, the government’s interventions have achieved little and even hindered progress, as in the case of licensing spectrum.
So, a visit last week to Alexandra township, just across the M1 highway from Sandton, was instructive for what is achievable with the right approach.
I was in Alex as part of a media tour arranged by Vumatel, the fibre infrastructure operator part-owned by Remgro. Vuma is conducting a trial in Alex, and in Kayamandi in Stellenbosch, to test whether it is commercially and technically feasible to deploy fibre into low-income communities — even into informal housing. Called Vuma Key, it’s aimed at delivering uncapped fibre broadband for as little as R99 per month per endpoint (provided the dwelling has electricity).
Imagine a school kid in Alex having access to the same educational resources as a kid in Sandton
This is not a corporate social investment project. Senior executives at Vumatel and Remgro — including former Vodacom Group CEO Pieter Uys, now a senior executive at Remgro — believe there is a real business case here, that wiring up millions of homes in townships (and further afield) is the next logical step in delivering affordable and unlimited broadband to South Africans.
The private sector could achieve what politicians have been promising for decades but have never delivered: universal broadband access — and real broadband that’s fast and uncapped, not flaky, best-effort and expensive wireless alternatives.
Unlike fibre in the suburbs, which is typically buried in ducts underground (an expensive process), fibre in Alex is suspended from poles and then deployed aerially to each endpoint, and from there internet is provided via a unique Wi-Fi hotspot in each dwelling.
If the Alex and Kayamandi trials prove successful (and it’s looking promising), Vumatel plans to expand the initiative to the rest of the country. Vumatel CEO Dietlof Mare says the company is prepared to spend billions of rand to make this a reality.
Mare and Uys’s optimism about the potential here is infectious, and it could change South Africa for the better. Imagine a school kid in Alex having access to the same educational resources as a kid in Sandton.
We know there’s a critical shortage of good teachers, particularly in subjects such as maths and science, and especially in schools with limited resources. Imagine making South Africa’s school curriculum, from grades 1 to 12, available free online in the form of web-based classes led by the country’s top teachers — a bit like the content produced by the Mindset Learn TV channel, but modernised, broadened and made available on demand. That’s a great use of tax money and would require only a tiny fraction of the amount the government squanders every year propping up failing state enterprises.
While Vuma has been busy wiring up Alex and Kayamandi, public enterprises minister Pravin Gordhan was interfering at Eskom over the appointment of a new CEO, and setting up yet another state-owned entity (SOE) — this one to oversee other SOEs.
It would be funny if it wasn’t so tragic: Gordhan and the ANC are so steeped in Marxist ideology that they simply don’t know how to fix the mess they’ve made. The ANC’s recipe is yet more socialism, which leads to more corruption and state failure. It is unbending about it, even as the economy sinks, joblessness rises, the country’s fiscal situation deteriorates, and people lose hope in the future.
As we walked through a portion of Alex last week, moving from one Vuma Key customer to the next to learn how residents are using their access to unlimited broadband, the smell of sewage trickling through the streets became overpowering.
Covering my nose against the stench of state failure, I couldn’t shake the thought that South Africa would be a much better place with a government that genuinely embraced the power of the market. It’s been shown the world over that free markets can lift millions out of poverty. It’s not rocket science. Sadly, Gordhan and his ANC cabinet colleagues have demonstrated again and again that this is a concept they haven’t even begun to grasp.
* McLeod is editor of TechCentral.co.za
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