The Council of the City of Cape Town has committed itself to a R300 million investment in a fibre optic network. A full meeting of the Council on 5 December 2007 unanimously approved a recommendation to install an initial 171 km network of fibre optic cables, linking all the main administrative complexes.

Cllr Belinda Walker, Mayoral Committee Member for Corporate Services and Human Resources, whose portfolio includes telecommunications, says: "Cape Town is the first major city in South Africa to adopt such a plan. Whilst others have either built small networks for their own use, or are planning to offer telecommunications services themselves, Cape Town will build the basic infrastructure, and then invite telecommunications companies to use it to offer services to the public. In this way the private sector will be involved in running the network, whist the City will keep control of the asset so that it cannot be monopolised.”

The City Administration will make primary use of the infrastructure, but will also make spare capacity available to licensed telecommunications service providers, who can use it to set up their own telecommunications networks. The first of these is likely to be the four universities and other research institutions in the metropole.  The network infrastructure will eventually extend throughout Cape Town, including areas that are currently poorly served.  This will enable telecommunications companies to offer services where there are none at present.

“The City will not be running its own telephone company,” says Leon Van Wyk, Head of the City’s Telecommunications Department. “It is not our intention to displace or compete with the private sector. Instead we will provide the basic infrastructure and contract with telecoms companies to make use of it to provide us with the internal telecommunications services that we need. This will be the first time that our basic telephone and data transmission services will go out on public tender. If we provide the cables then a large number of companies will be in a position to offer us competitive services.”

The City has over 10,000 computer users, who are increasingly dependent on data networks and the Internet to do their work. “The current bandwidth available to us is totally inadequate”, says Nirvesh Sooful, the City’s Chief Information Officer.

“We cannot afford to upgrade the service unless we do something to reduce recurrent costs and introduce competition. We have looked at the various approaches, tried both in South Africa and in other countries and decided that this is the best way to do it. The City administration staff will be the first to benefit. Clinics and libraries will quickly follow.”

The project is also aligned with the telecommunication requirements for the 2010 Soccer World Cup. It will support the City’s 2010 ventures in at least four ways:

- Fan zones will need fibre infrastructure
- FIFA residence and dignitary spaces need broadband facilities
- Stadium management, security and traffic control require broadband connectivity
- Showing Cape Town to be a "smart city" will help to attract foreign investment after the event

Phase I of the construction project will cost R300 million over five years. Internal cost savings will repay this investment over a similar period. But the real economic benefits come from letting other companies use the cables to offer new services.

Research by well-known UCT economist Prof Barry Standish projects that the investment could result in a cumulative contribution to the City’s GDP of R5.7 billion by 2012. Over the 20 year lifetime of the network, it should add about 2.25% to the Cape Town economy. Direct job creation in the construction of the network will be a few thousand, but this boost to the broader economy could result in many more indirect jobs in the following years.

“Telecommunications infrastructure has become basic economic infrastructure, as important as roads and water systems,” says Van Wyk.  “This project will provide the City with improved telecommunications and contribute towards service delivery. The people of Cape Town will enjoy more competitive telephone and Internet services. Everybody will win.”

Planning is already well advanced and construction should start early in 2008.

ISSUED BY:
COMMUNICATION DEPARTMENT
CITY OF CAPE TOWN
TEL:  021 400 2201


MEDIA QUERIES:
LEON VAN WYK
DEPARTMENT HEAD: TELECOMMUNICATIONS
TEL: 021 970 3641    CELL:  084 905 0575