The Johannesburg Broadband Network (JBN) Build, Operate and Transfer Agreement (BOT) was initiated in 2006 as a way to integrate the city’s telecommunications structures and lower costs to government and other municipal owned entities, as well as giving citizens increased access to telecommunications services.
Ericsson South Africa was appointed in 2010 to build a fibre optic network, and later ceded the contract to CitiConnect Communications, a joint venture between the City and Ericsson.
At least 900kms of fibre have been rolled out thus far, and the entity created to implement the project, BWired, was intended to operate it over the next 12 years.
The City however has cancelled the contract, citing contract breaches by CitiConnect, and intends to establish a municipal-owned entity to roll out the broadband.
CitiConnect said, at the time of the cancellation, that the matter was in dispute, claiming that the agreement was terminated unlawfully.
According to council documents, settling with Ericsson will absolve the City from paying the company R3.348-billion over the stipulated 12-year period the contract was meant to have run.