State-owned broadband capacity supplier Broadband Infraco was showing signs of a turnaround after improving its financial performance during the year ended March 2012, the company said on Friday.

Broadband Infraco, for the first time, generated positive cash from operations of R52-million during the year – contributing to a 54% improvement in the company’s net loss, which was reduced to R95-million. Last year, the company recorded a R206-million loss for the year, CFO Ramasela Magoele, standing in for the newly appointed CEO Puleng Sejanamane, told journalists at a media briefing.

The company, which came under fire last year after an external audit revealed significant irregular and wasteful expenditure, also increased its revenue by 36%, reaching R393.6-million, compared with the R297.6-million in the prior year.

Public Enterprises Minister Malusi Gigaba commended the group’s performance and stabilisation, but warned that despite achieving or exceeding many of its key targets, much remained to be done to ensure the long-term sustainability of the company.

He noted that increasing focus must be placed on the development of leadership and management competencies and effective people management, as well as the continued alignment of the business plan with the national aims for broadband infrastructure. He also believed that a plan should be developed to ensure that government was efficient and cost-effective in its broadband services, while attracting the broadband traffic of other State-owned companies and national and provincial government.

Gigaba said that South Africa was behind many countries in the roll-out of broadband, and many things, including the dispersal of the assets of the State, the lack of an integrated information communication technology (ICT) policy and regulatory issues were hindering the development of broadband for all by 2020.

A discussion document compiled by the Department of Communications (DoC) found that only 4 out of 100 households used broadband, compared with Organisation for Economic Cooperation and Development countries, which average 23.3 fixed broadband subscribers per 100 households.

In April, the DoC, headed up by Communications Minister Dina Pule, embarked on a process to overhaul South Africa's ICT policies.

The National Integrated ICT policy, which was expected to be complete by 2013 and implemented in 2014, would be aligned with the government’s developmental goals, as well as provide a platform for South African companies to further develop the sector to compete globally.

It would retain the elements of the policies that worked, and revise and replace the aspects of the legislation that were irrelevant and stunted economic growth.

Public Enterprises director-general Tshediso Matona, discussing the possible consolidation of Sentech, Telkom and Broadband Infraco, said that the government was examining ways of optimising the State-owned enterprises’ capacity in broadband space and penetration. While the joining of the three were an option, he stressed that there was no finality in the concept.

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