Cape Town — Reducing the cost of doing business in South Africa received a leg up on Friday, with President Thabo Mbeki's announcement that state-owned broadband supplier, Sentech, will become a wireless internet provider following an injection of funds.

"Accordingly, we will this year complete the licensing and operationalisation of InfraCo," President Mbeki said during his State of the Nation Address on Friday.

"Already, money has been allocated for Sentech to become a wireless internet wholesaler as well as finance its digitisation," said President Thabo Mbeki delivering his State of the Nation Address in Parliament on Friday.

This will go a long way towards furthering Information Communication Technology (ICT) infrastructure in the country.

InfraCo is a company which aims to stimulate greater private investment in African and Asian infrastructure development by acting as a principal project developer, focusing on lower income countries.

The President highlighted that government and the private sector has been working to complete the process to launch the Eastern Africa Submarine Cable System (EASSy) - a 9 9000km-long submarine cable between Duran and Port Sudan.

The undersea ICT infrastructure initiative will see the cost of telecommunications significantly reduced also impacting greatly on the cost of doing business in South Africa.

The president explained that government aims to provide digital broadcasting to 50 percent of the population by the end of the year.

In terms of South Africa's international ranking regarding access to ICTs, the country is fifth on the continent and 86th in the world.

Addressing Africa's leaders at the 10th African Union (AU) Summit in Ethiopia recently, Mr Mbeki said an important area where work is underway in South Africa and on the continent is in telecommunications infrastructure.

"This, as we know, will have a profound impact on the cost and ease of doing business, enhance access to internet and other critical areas of modern technology," said the president.

He highlighted that he hoped the EASSy initiative will be operational by the end of 2008.

"ICT skills are also very crucial for industrial development. Until now we have been importing abroad, or alternatively outsourcing ICT related projects to service providers from outside our borders.

"The development of ICT skills is a time-bound process that must necessarily start to be implemented in the lives of younger generations of Africans," he said.

At the release of the business environment indicators contained in the Africa Development Indicators report in November 2007, it was indicated that to start a business in South Africa it took 35 days and nine procedural steps.

The high cost of telecommunications and broadband in South Africa us said to influence foreign companies decisions whether or not to setup shop in the country.

With the operationalisation of EASSy at the end of the year and with government furthering its efforts to enhance competition in the ICT sector, both companies and the general public will befit greatly.