Billions in taxpayer money wasted on failed broadband projects

The South African government’s endeavours to establish broadband networks have squandered taxpayer funds, plagued by corruption and inefficiency. Projects like Stellenbosch’s Wi-Fi town and Tshwane’s free Wi-Fi faltered, reflecting broader issues in service delivery. Despite high mobile data usage, home Internet access remains low at 14.5%, highlighting systemic challenges.

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By Daniel Purchet*

The South African government has wasted billions of taxpayer rands trying to build and operate broadband networks in South Africa.

Even on a small scale, most of its attempts failed miserably, regardless of the noble intentions behind a particular project.

Some of these projects include Stellenbosch’s 2012 plan to become the country’s first Wi-Fi town, Tshwane’s free Wi-Fi, and the Johannesburg Broadband Network Project.

Unfortunately, due to crippling corruption, maladministration, and poor service delivery, these projects never last long — if they even get off the ground.

As a result of this and other poor policy choices, home Internet access in South Africa still stands at a meagre 14.5%.

Most families continue to rely on more expensive mobile data for connectivity, with Stats SA reporting that 78.6% of households have some kind of mobile Internet access.

Tshwane’s free Wi-Fi

Launched in 2013, the first phase of the Tshwane Free Wi-Fi project was initiated and funded by an ANC-led municipal government.

Hotspots were located at various academic institutions, the Mamelodi Community Centre, and Church Square.

However, problems started a few years later when the DA took over the municipality, and it noticed irregularities in the finances.

In 2017, the Auditor General declared R180 million spent on the Wi-Fi network as “unlawful and irregular”.

The project was reportedly paid for by grant funding, which was provided under a section of the Municipal Finance Management Act meant for non-profit organisations and charities.

The project costs also raised eyebrows, amounting to R320 million when the irregularities were noticed in 2017. This worked out to about R302,000 per site.

The total investment also included R75 million in value-added services, which included:

Tshwane TV – R22 million
Drive-In – R19 million
VOIP on Tshwi-Fi network – R25 million
Chat with City – R9 million

Cilliers Brink, a member of the city’s mayoral committee at the time, said that the municipality was too far in to withdraw from and cancel the project by the time the irregularities were noticed.

MyBroadband tested the City of Tshwane’s free Wi-Fi service in 2022 and was surprised to find that some sites still work, even though the app seems to have disappeared.

Cilliers Brink, City of Tshwane’s current Mayor

Stellenbosch free Wi-Fi

Stellenbosch mayor Conrad Sidego first announced the town’s free Wi-Fi project in February 2012, promising that everyone would have free Internet access.

It was a collaborative effort by Stellenbosch, Mxit, and the University of Stellenbosch.

By November of that year, things slowly started unravelling when stakeholders struggled to agree on the best way to proceed.

Some of them alerted MyBroadband about the issues, saying virtually no progress had been made with the infrastructure rollout.

According to one stakeholder, Mxit had been providing the free bandwidth that made the service possible but was no longer supporting the project.

However, Mxit disputed this, saying they were unaware of anything being switched off and that Project Isizwe maintained the network relationship with the municipality.

A Stellenbosch councillor at the time said Project Isizwe was not involved in the project, but she could not say who was running the network.

Stellenbosch Central

Sentech’s MyWireless

First launched in 2004, stated-owned signal distributor Sentech’s MyWireless uncapped broadband service aimed to compete with Telkom’s DSL 512 service, which was limited by a 3GB monthly cap.

MyWireless, which offered speeds ranging from 128 Kbps to 512 Kbps, initially enjoyed strong uptake.

However, the wireless service’s reputation suffered irreparable damage due to poor service levels and increased consumer backlash.

Sentech eventually exited the retail broadband market after further funding problems decreased its marketing budget and subscriber base.

Sentech officially shut down MyWireless on 30 November 2009.

The Johannesburg Broadband Network Project

The Johannesburg Broadband Network Project aimed to provide access to broadband services, improve the city’s service delivery, and increase individuals’ and businesses’ access to affordable Internet services.

Former Johannesburg mayor Herman Mashaba said the project to build a broadband network throughout the city was commissioned in 2010 and became riddled with corruption.

“It was a massive project that would have brought benefit to our city,” Mashaba said in 2018.

“After just four years of the 12-year BOT contract, the city decided to buy back the broadband network despite having no expertise or capacity to manage it. The price of this decision you may ask? R2.3 billion.”

“But, as usual, what lay behind the decision was insidious corruption, characterised by benefitting the cadre networks.”

At the time, investigations indicated that the City of Johannesburg (COJ) had over 3,500 cases of fraud, corruption and maladministration involving over R18 billion.

Herman Mashaba, former Joburg Mayor