South African state-owned fibre operator in deep trouble

State-owned fibre network operator Broadband Infraco has applied for an extension of its universal access obligation for eight districts nationwide, raising questions about the company’s ability to fulfil its mandate.

This follows several concerns about the financial stability of the government fibre operator, which became technically insolvent in 2024.

Broadband Infraco provides long-distance national and international connectivity to private sector partners and is mandated to provide universal Internet access to South Africa as part of the SA Connect programme.

In February, it announced that it had deployed 6,312 community Wi-Fi hotspots nationwide in partnership with 76 Internet service providers.

The company’s fibre optic network currently comprises 15,000km of cabling and 156 points of presence, according to its company profile.

The Independent Communications Authority of South Africa has now announced that the entity has applied to amend its Electronic Communications Network Service (I-ECNS) licence.

It hopes to extend the deadline for fulfilling the universal access obligations in eight districts around South Africa. The districts in question are:

• Bojanala (North West)
• uMkhanyakude (KwaZulu-Natal)
• Sekhukhune (Limpopo)
• uKhahlamba (KwaZulu-Natal)
• Bophirima (North West)
• Sutherland (Northern Cape)
• Loeriesfontein (Northern Cape)
• Springbok (Northern Cape)

Broadband Infraco has asked that the deadline be extended to 30 November 2026.

“Broadband Infraco submits that the extension will provide it with sufficient time to raise the necessary funding to meet its outstanding access obligations,” Icasa said in the Gazette.

MyBroadband contacted Broadband Infraco to find out the initial deadline for these districts and why it has not managed to raise the necessary funding.

The state-owned entity has been through some significant financial challenges, with the Auditor General of South Africa not being able to complete an audit of its financial statements in the past five years.

The severity of its financial instability became apparent in 2021 when state-owned signal distributor Sentech conducted due diligence about whether to buy Broadband Infraco to create a State Digital Infrastructure Company.

For the merger to occur, Broadband Infraco’s solvency and liquidity were tested, and Sentech found that the acquisition would likely result in severe financial strain for both companies.

The Department of Communications and Digital Technologies told Parliament in November 2024 that Broadband Infraco was technically insolvent as of the first quarter of the current financial year as its liquidity ratio was less than one.

It also warned that the state entity does not have the capital to realise its growth plans and generate positive cash flows from operations in the near future.

Despite this, its CEO, Gift Zowa, said the company is on track to becoming a “more commercially sustainable entity.”

In its corporate plan for the 2025/26 through 2029/30 financial years, the company notes that underinvestment in its infrastructure has negatively impacted its financial stability.

“The board has, over the years, supported management in ensuring that the limited cash resources of the company are managed prudently; this has allowed the company to remain operational despite its many challenges,” the corporate notes.

“The company requires funding of R380 million to pay Eskom, Transnet, the Transmission Equipment Supplier, and other service providers to resolve the impasse with Eskom and prevent others from suspending their services that cause another catastrophic crisis.”

It added that it requires between R621 million and R1.3 billion in the medium to long term for “revenue-generating projects, improve service availability,” and expand its network capacity.