​29/05/2015: City of Johannesburg poised to fast track Smart City project following network transfer from Ericsson SA 
 
The City of Johannesburg and Ericsson South Africa have entered into an agreement to transfer over 900km of fibre optic broadband network to the City.
 
This agreement, which followed months of negotiations, was signed in Johannesburg on 28th May 2015.
 
At its January sitting, the City Council took a resolution mandating City Manager, Mr Trevor Fowler, to begin negotiations with Ericsson SA, guided by the prescripts of the Municipal Finance Management Act and other applicable legislation. The City will now obtain full control of the network and house it in a Municipal Owned Entity (MOE).
 
As part of the agreement, Ericsson is to transfer all contracts and the network to the City’s MOE. The agreement will see the City pay Ericsson an amount of R1.2 billion for costs incurred in the roll out of the network and the contracts related to the network based on an independent valuation.
 
The CoJ intends to use the broadband infrastructure to drive down the cost of telecommunication and thus the cost of doing business in Johannesburg. The transfer will also bolster the City’s desire to eliminate digital exclusion through the massification of affordable broadband.
 
 
The primary objectives of the Johannesburg Broadband Network (JBN) include:
 
Lowering the cost of doing business in Johannesburg,
Increasing usage and penetration of high-speed broadband connectivity,
Facilitating the growth and development of new and existing information and communications technology businesses,
Increasing access to the benefits of Internet-based communications,
Achieving digital inclusion,
Reducing government telecom costs, and
Improving service delivery
 
City of Johannesburg Executive Mayor Parks Tau said the City was now “in a position to turn this valuable public asset into an instrument of accelerated delivery”.
 
He added: “The City has addressed the infrastructure spatial inequality by, amongst others, building the network. We can now accelerate the rollout of 1000 Wi-fi hotspots, extend the range of our smart Citizen initiative to encompass almost all points of citizen engagement in the City.
 
“We can use the network as a platform to engage more constructively with ratepayers via interactive research and surveys and extend the reach of government closer to where the Citizens are”.
 
Fowler said the settlement was a very significant development. “It will allow us to speedily transform Joburg into a Smart City, a city that uses technology and innovation to turn challenges of today into opportunities,” said Fowler, appreciating Ericsson's commitment to ensure a smooth handover of the infrastructure to the City.
 
The completion of the agreement is subject to approval by the Competition Commission and other customary closing conditions. The parties expect the agreement and the transfer of the network to be completed by end of August.
 
Ericsson SA’s Vice President and managing director Magnus Mchunguzi said: “We are pleased to have reached this agreement with the City of Johannesburg. We continue to work with our partners and industry stakeholders to enable the Networked Society in Africa and are very excited about the new opportunities the network will offer the city once it is fully operational”.
 
ENDS
 
Issued by the City of Johannesburg