Broadband Infraco – Connecting the Nation

South African Broadband Infraco SOC strives to enhance connectivity within the country as well as South Africa’s connection with its neighbours.

Broadband Infraco (BBI) was incorporated in 2007 as a state-owned enterprise with a mandate to expand the availability and affordability of access to electronic communications in South Africa, and became commercially operational in 2010, just after the FIFA World Cup.

Given its form and size, the company’s role is specific – Broadband Infraco derives its distinctiveness from its founding mandate, which includes improving competition in the wholesale connectivity market; and addressing the challenges of connectivity in underdeveloped and underserviced areas that were historically neglected in terms of infrastructure.

“The company’s investments in infrastructure in the last decade have been driven by the need to fulfil this mandate,” said CEO Andrew Matseke. “This is a role we take on with pride, which is evident in how we have implemented projects of national importance whose aim is to provide universal access to rural and underserviced communities. This includes SA Connect, the government’s project derived from the National Development Plan (NDP), which aims to deliver widespread broadband access to 100% of the country’s population by 2030.”

In addition to its key mandate, BBI is the provider of wholesale international capacity to institutions like the CSIR for purposes of national research; and also acts as a wholesale provider of connectivity to Mobile Network Operators (MNO) and Internet Service Providers (ISPs), enabling access to wholesale products at competitive pricing. This is especially important in ensuring that mobile operators deploy connectivity cost-effectively to reach the masses of South Africa.

The company also fulfils an important role in the SADC region – it provides connectivity to all of South Africa’s neighbours which enables them, especially the landlocked countries, to connect to the Internet Exchange at the Teraco Data Centre in Johannesburg; and from there to the undersea cables that link the region to the rest of the world.

Turning challenges into opportunities

Mr Matseke pointed out that with its headcount of 150, BBI is a relatively small player, able to offer customised solutions and focus on specific customers who prefer a more intimate relationship with their service provider. This is a certain competitive advantage but comes at a cost.

Coming to a highly competitive market with strong, established players was not easy, and the government’s non-achievement of the plans to implement the investment originally committed did not help. Undercapitalisation has been another challenge – operating in a market where fibre and basic connectivity have become commodities with pricing on a downward spiral has affected the revenue base. Last but not least, unlike its counterparts in the private sector, Broadband Infraco has legislative and regulatory requirements that make some decisions take longer to finalise.

Rather than making the company unstable, the challenges pushed BBI to be creative in finding ways to differentiate itself from the others. “Operating in a commodity market, we have managed to be entrepreneurial in our product offerings, introducing other ancillary products to supplement the revenue fall,” noted Mr Matseke.

“The acquisition of market share and the solid growth of the company are reflective of the strength of our people, a strong and resilient ‘can-do’ culture and a sound business model. Although a state-owned entity, we have always been funded by our own operations, which speaks volumes of the ‘capability’ of our people.”

These achievements would not have been possible without committed and dedicated staff. Broadband Infraco has a core complement of employees who have the ICT skills that are required in the sector and when recruiting a new workforce, the focus is on acquiring skills that enhance what the company already has.

“We are a young company in terms of demographics with an average age of 34, operating within a dynamic organisation almost like an entrepreneurial company, with close interaction between different levels of management and employees. That works well even in times of difficulties, such as now during the Covid-19 pandemic,” Mr Matseke acknowledged, adding that due to the good skills foundation built over the years, the company has not been impacted by skills shortages.

“Our employees have a good understanding of the need to provide universal access and are aware of the importance of what BBI stands for in South Africa. We value our people and provide them with appropriate training and opportunities to contribute to matters of national interest – making input into key policy matters around ICT, country development, SADC development, BRICS development. These keep employees motivated as the role played by them is that of serving the national duty.”

In a new shape

Building on its progressive development over the ten years of its operation, Broadband Infraco’s role is going to change in the months to come, revealed Mr Matseke.

“Under the governmental plan, within the next 12 to 24 months Broadband Infraco is going to be merged with Sentech, a distributor of broadcasting signal in South Africa, to create a State Digital Infrastructure Company. We are already in the mode of planning for that future company which will be the foundation of the digital infrastructure that South Africa will need to be able to participate meaningfully in the 4th industrial revolution.”

The BBI/Sentech merger is seen as a positive move for both the public sector and for customers, enabling efficiencies in how to engage the market as well as an end-to-end product offering to the customer. It is also expected to optimise government assets and remove bureaucracies.

The second priority for the future, as highlighted by Mr Matseke, is to have a full IP network that will cover the whole country including the underserviced areas that are part of the scope of the SA Connect project.

“In implementing SA Connect the company has developed the relationships with small internet service providers operating in rural areas who have become a very important growth market for us. This has been a positive step as we have managed to empower a number of SMMEs (Small, Medium and Micro Enterprises) which we have seen develop and sustain themselves over time.”

Full completion of SA Connect is another major task in which BBI will be actively participating. Challenging as the future may seem, the company has demonstrated that it is in sound shape to achieve its objectives.

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