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address digital exclusion issues and to improve would return responsibility for operating the
digital connectivity among Johannesburg’s citizens network back to CoJ .
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and businesses. The JBNP’s vision was to become
a "Smart City," and the JBNP was expected to The network build was expected to go live in 2013,
develop economic growth by creating business but in 2014 the CoJ terminated the contract with
opportunities, providing access to public services CitiConnect Communications, saying that the
and increasing employment opportunities for company had breached the agreement, a claim
youths. CitiConnect disputed. The CoJ paid USD 93 million
to Ericsson for the infrastructure that had been
To realize its vision, the CoJ awarded a contract to built to date and in February 2015, the CoJ took
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Ericsson – which then transferred it to CitiConnect responsibility to complete the network build. It
Communications – to build a fibre network is now a public DBO project, meaning that the
that would extend coverage across the city’s infrastructure is fully owned and operated by the
business and residential premises. The network municipality.
was estimated to be 900 km in length . The goal
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was to provide broadband and ICT services at a The project has come under scrutiny from
lower cost by enabling service providers to access independent analysts and officials, who have
wholesale capacity from the JBNP on an open- questioned the need for a municipally owned fibre
access basis. This, in turn, would allow service network. Questions have also been raised about
providers to provide lower retail prices to end the ability of CoJ to compete with commercial
users. The CoJ would also act as an anchor client, service providers to generate profitable returns.
connecting its buildings to the JBNP (this would There have been calls for the CoJ to sell the
only account, however, for a small percentage of network to private service providers.
network capacity).

The investment was estimated at about USD 1.3.4 Joint ventures (JVs)
100 million in capital, with management costs
expected to be around USD 24 million annually. A joint venture assumes that ownership is split
The contract was constructed along the lines of a between the private sector (typically one or
public outsourcing model. After 12 years, Ericsson more network operators) and the government.
The network operator takes responsibility

Box 1.3: Key lessons: National ICT Broadband Backbone (NICTBB)
• NICTBB is operated and managed by TTCL on a transparent and open-access basis and
is separate from the rest of TTCL’s business. This is essential in ensuring that service
providers are not adversely affected by government intervention in infrastructure.

• Other regulatory measures, such as cuts in MTR rates in conjunction with broadband
interventions, may be necessary to stimulate growth in mobile services.

• Infrastructure intervention, backed by a strong business case and development agenda,
can attract significant development funding or loans.

• National backbone networks are not an end in themselves. Further investment in metro
networks and access networks will still be required to deliver last-mile connectivity.

• The lack of specific and defined outcomes makes it difficult to measure the true success
of an intervention or investment.

• Allocating universal service funds to competing operators can stimulate competition in
the development of rural broadband networks.

14 Trends in Telecommunication Reform 2016