The City of Johannesburg is selling its 1 000 km fibre network through an open tender process and expects to raise minimum proceeds of R853-million and maximum proceeds of just over R1-billion.
The city explained in a statement issued on Friday that the sale of the fibre network was aimed at lowering data costs by up to 50% and bridging the digital divide across the city.
To effectively do this, the city said that its Metro Trading Company (MTC), which is responsible for enabling all Smart City programmes, was transitioning from being an owner of the network asset, to becoming an agent that made use of others’ networks to deliver city services.
MTC proposed a new business model – a build, operate and transfer model – to the Johannesburg municipality in May 2018. Under the business model, MTC will transfer an asset to a private entity, enter into a commercialisation arrangement with the private entity, and procure network services from the private entity.
MTC will also ensure that it has the first right of refusal to procure the asset at the end of a services contract with a private entity.
Within all this lies the opportunity for training and development, skills transfer and employment opportunities for small to medium-sized enterprises, the city said.
MTC is conducting public participation meetings in the city’s seven regions to create awareness of the new business model in preparation for a second round of public meetings to be held later in the year to provide updates on the tender process.