Communications budget cut by a third as broadband spend slows

The department of communications & digital technologies is expected to cut its spending by more than a third in the 2025/26 financial year, the 2025 national budget shows, driven by lower broadband project spend.

The Budget Review for 2025 shows that the department’s spending will decrease from an expected R3.968bn in 2024/25, to R2.545bn in 2025/26, a 36% reduction. This trend is expected hold steady over the medium term, with spend of R2.557bn in 2026/27 and R2.673bn in 2027/28. 

The government’s financial year comes to an end on March 31. 

The reduction in expenditure was mainly due to cuts in spend for the department’s “ICT Infrastructure Development and Support Programme”, whose purpose was to “promote investment in robust, reliable, secure and affordable ICT infrastructure that supports the provision of a multiplicity of applications and services”, said the Budget Review.

In the current year, 2024/25, this is expected to account for 48.4% of the department’s spend at R1.92bn. 

More specifically, spend on broadband through the rollout of the SA Connect project is set to fall dramatically. Estimated at R1.895bn in 2024/25, this will come down to R267.1m in 2025/26, holding steady at R267.1m in 2026/27, then R292.2m in 2027/28. 

SA Connect is now more than a decade in the making, with billions of rand already spent. It aims to connect 5.8-million sites to high-speed internet by 2025/26 and was approved in 2013.

“The department will continue to roll out the SA Connect project in under-serviced areas, supported by relevant state-owned entities such as Broadband Infraco, Sentech and the State Information Technology Agency,” the finance department said.

As a result, 970 government facilities will be provided with connectivity over the medium term. A projected R709.8m has been allocated for the broadband programme over the medium term.

A year ago, under former minister Mondli Gungubele, the department had earmarked R2.4bn to continue work for the SA Connect project. 

While spending is expected to slow down, the work will continue, though probably in a different phase. 

Over the medium-term period, Solly Malatsi’s department “will focus on co-ordinating the rollout of broadband internet to under-serviced areas through the SA Connect project; and on enabling digital transformation and inclusion through licensing spectrum to improve network quality, contribute to economic growth and lower data costs”.

On the whole, the department’s allocation over the period amounts to R7.8bn. Of this, an estimated 69.1%, R5.4bn, is allocated to transfers to entities for their operations and for project-specific funding. Of this, R1.8bn is allocated to the SA Post Office for its universal service obligations to provide postal services in under-serviced areas.

Another R1.6bn has been allocated to telecom and broadcast regulator Independent Communications Authority of SA (Icasa) for overseeing the ICT and postal sectors. Icasa is expected to hold another spectrum auction during the year after successfully raising R14bn for state coffers in 2022 when it conducted the first auction since 2004/05. 

An additional R102m has been allocated for 2025/26, with respect to the second phase of spectrum licensing through an auction process.

National broadcaster the SABC has been allocated R707.4m for its “various activities”. Rival MultiChoice funds its operations mainly through subscriptions and eMedia mostly through advertising. 

In addition to allocations from the government, the SABC takes in money from TV licences. All these entities — including Talk Radio 702 owner Primedia and African Media Entertainment — compete for advertising revenue. 

gavazam@businesslive.co.za