Government’s R200 million a year is a drop in the ocean.

Duncan McLeod, of TechCentral, argued following Sona that he doesn’t “think it’s a bad thing that government isn’t committing tens of billions of rand in taxpayers’ money to build a state-led telecommunications network similar to Australia’s hopelessly over-ambitious and highly controversial National Broadband Network. For one thing, we’re not Australia — we simply cannot afford it. South Africa does not have the money”.

He’s right.

Government should not be spending money it doesn’t have on trenching fibre. Its expensive distraction (vanity project?), Broadband Infraco, is in need of a bailout from Treasury to enable it to continue operating. Quite why both it and Telkom are operating national (and international) backhaul networks, is downright bizarre. The only hope is that Infraco is one of those SOEs to be phased out as they “are no longer relevant to our development agenda”.

McLeod points to the German model “where, in exchange for receiving access to radio frequency spectrum for 4G broadband, mobile operators first had to build high-quality coverage in the rural and under-serviced parts of that country. Only then could they use the spectrum in the cities”.

It really is that simple.

Mobile operators cannot do anymore. Because of spectrum limitations, LTE services often remain 4G in name only. The process of licensing ultra-valuable spectrum (800Mhz and 2.6Ghz) remains stunted. And the pile of unused, ‘returned’ spectrum continues to grow.

License both bands, at say, R1 billion to operators (and to anyone who wants access to it). This will provide a nice boost to the fiscus.

Fibre network

As part of the licensing, ensure that operators connect rural towns and cities to fibre against aggressive – but fair – targets. For every x-dozen smaller towns or y-thousand kilometres of fibre, operators would be able to use the newly-acquired spectrum in z-major metros. And the operators don’t have to each go it alone. That’s the beauty of fibre. You need only trench once for all operators, and there’s already precedent for this with MTN, Neotel and Vodacom working together to build a national backhaul network. Expand on this.

Let Treasury have oversight of this process (neither Icasa nor the the department(s) responsible for ‘communications’ are capable, I’d argue). Plus, operators have proved rather deft at putting one over regulators in the past.

There are ways too of government having access to a national fibre network without having to own one. Perhaps it has a ‘99-year lease’ to capacity on this newly expanded network? Or it relies on a cost-plus formula to buy access? Or the best price wins?

Let’s move beyond this obsession with having to own a national fibre network. We don’t need it. We can’t afford it. The private sector can, and should be incentivised (correctly) to connect South Africa. All government need do, ideally through a central agency like Sita or, here’s a thought, Telkom, is provide free connectivity and free WiFi on top. It’s amazing what free, fast connectivity can do for things like entrepreneurship and economic growth. Just ask Project Isizwe (or the OECD).

* Hilton Tarrant works at immedia. He owns shares in Vodacom, first purchased in June 2013.

This column was first published by Moneyweb and is republished here with the permission of the editor.