FUNDING to improve broadband connectivity in South Africa will only be allocated once a policy framework has been agreed, the Treasury said on Wednesday in its 2013-14 budget review.

It said public-sector investments by Broadband Infraco and national signal distributor Sentech focused on service provision in rural areas and institutions such as schools, libraries and clinics.

Cape Town, eThekwini and Johannesburg have also been investing in their own urban networks.

The budget review said the private sector had made substantial investments in broadband connectivity, concentrated in mobile networks and in overland and undersea fibre-optic cable infrastructure.

Average internet connection speeds in South Africa had increased 32% to 3.1MBps between October 2011 and October 2012.

"The increase in broadband capacity means that user charges have fallen somewhat, but remain high by global standards," the budget review said.

The 2011 Census results showed that 64.8% of households did not have access to the internet, and that most of those with access relied on cellphone connections.

"Access to the internet is still hampered by relatively high costs and undersupply of broadband infrastructure across the country," the review said.

The Treasury said that an improved regulatory environment would help expand access and reduce costs across the sector.