Cabinet this week approved the establishment of South Africa’s State-owned broadband infrastructure company, Infraco, spokesperson Themba Maseko said on Thursday.

The non-core fixed services network assets of Eskom and Transnet will be transferred to Infraco, which the government is creating in order to bring down the costs of broadband in the country.

Infraco will provide broadband services on a cost basis to the market through an initial arrangement with South Africa's second network operator, Neotel, which has indicated it plans to begin providing telephone and Internet services to individuals and companies later this year.

The Broadband Infrastructure Company Bill will be tabled in Parliament during the 2007 session, Maseko said.

The South African government, and President Thabo Mbeki in particular, has repeatedly identified telecoms and internet connection charges as a key barrier to doing business and attracting investment in the country.

Last month, Mbeki accused fixed-line operator Telkom of charging “absolutely phenomenal” rates for access to some of the infrastructure that enables broadband.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.