Tshwane Broadband Network Development Project

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Tshwane Broadband Network Development Project entailed the development of the 1500 km broadband network of the city of Tshwane in South Africa. The project would be designed and built through a special purpose vehicle Thobela Telecoms (previously - Newshelf 1327). Altech Alcom Matomo parent Altech Radio Holdings would have and maintain 9% of shareholding for five years. Cloud Connect and New GX Capital Holdings would each have 25% and, as of May 2016 41% were listed as “available”. The approval of the broadband project came after Altech Alcom Matomo was appointed in June 2015, following a competitive tender process. Financial closure took place on 11 November 2016. Pursuant to BOT contract, signed between the City of Tshwane and Thobela Telecoms (Service Provider), the latter would raise financing for, design and build a broadband network. Inter alia, the network would be used with prioritization of delivery of services to previously under-serviced areas and to promote other social welfare objectives, such as job creation and development of small, medium and micro enterprises. The Service Provider would be entitled to sell and provide services/products on the Network to third parties. City of Tshwane would be entitled to 30% of the net profit after tax generated from revenue. The Service Provider would undertake to operate the Network for the term of the contract (18 years), support and maintain the Network (and initially its sections on an incremental basis), conduct one refresh of the Network during the Term. The City of Tshwane would pay a minimum price for operate and maintenance services. Following the term of the contract, ownership of the network would be transfered to the City of Tshwane. The project was estimated at ZAR 2.736bn (229,824 mln USD). The Special Purpose Vehicle was funded through 30% equity and 70% debt. The loan comprises ZAR 950 mln (69,9 mln USD) term loan arranged by Barclays. Financial close took place on 11 November 2016. As of September 2017, the City of Tshwane approached the High Court in Pretoria to set aside the broadband deal, claiming the former administration entered into the contract unlawfully.