Municipal telecoms networks making waves

Municipalities doing it for themselves

Municipal telecommunications networks are nothing new in South Africa.

Knysna’s municipality has already made various wireless services available to their inhabitants and is by far the most successful example of the benefit a municipal network can have for a community.

Tshwane has also invested in their own fiber infrastructure, and in partnership with network specialists, like Neology, has rolled out wireless and wired networks which are available to residents in many parts of the city.

While many South African municipalities are quietly going about the business of building networks and saving money on Telkom bills, the two largest cities, namely the City of Cape Town and the City of Joburg, have been making headlines with their ‘Smart Cape wireless project’ and the ‘Joburg Broadband Network Project’ respectively.

The City of Cape Town has recently dismissed Telkom's objections to the awarding of a tender to MTN-NS and Cornastone Enterprise Systems which threatened to keep the Smart Cape wireless project back.

The Joburg Broadband Network Project is also forging ahead after a request for information has attracted an overwhelming interest from companies to be involved in this project which, according to ITWeb, is estimated to be worth about R500 million.

A shortlist of candidates, who will be asked to build demonstration networks to show off their technologies, is expected very soon.

But with most of the largest cities in South Africa looking into building their own telecommunications networks and possibly providing services to their inhabitants, Telkom and Neotel stand to lose millions in revenue.

Telkom and Neotel responds

Neither Telkom nor Neotel look too enthusiastic about municipalities starting to play in the telecoms space, and MyADSL has even received information that the two operators are actively trying to slow down municipal network development.

Telkom however denied these allegations, saying that while they don’t feel that municipalities should provide services to their residents, they are not officially challenging any of these developments.

“While Telkom does not agree that municipalities can provide electronic communication services to third parties on the basis of their PTN licences, there are currently no formal challenges by Telkom before any competent authority,” said Lulu Letlape, Group Executive for Corporate Communication at Telkom.

Neotel had a more philosophical approach to the issue, which more or less amounted to the same view as Telkom.

“Paradoxically, cities in a number of developed countries, where there is already strong competition in telecoms services, are deploying networks to provide more ubiquitous Internet access at little or no cost to consumers. Such networks can potentially fill the sub-economic gaps left by commercial players,” Neotel said.

“Some municipalities in developing countries have seen this "digital cities" concept as a solution to a lack of competitive, affordable world-class telecommunications. In practice, though, whilst it certainly can make a city marginally more attractive for its inhabitants and businesses, it is no substitute for the vibrant, sustainable array of communications services that appears when there is real competition in a telecoms market, supported by investment incentives.”

Neotel said that it firmly believes that at South Africa's current stage of development, it is very important for every organisation – municipalities and telecoms operators – to focus on their core competencies in order to ensure that a win-win situation is created between municipalities, telecoms operators and consumers.

“Neotel, by virtue of its nationwide deployment, and its global relationships through its strategic equity partners, brings unrivalled economies of scale and technical expertise in the deployment and operations of telecoms services over next generation networks. We are therefore in discussions with various municipalities in order to create synergistic models for the deployment of telecoms infrastructure and provision of cost-effective telecoms services,” said Neotel.

Neotel further said that municipalities have a critical role to play in facilitating the deployment of new infrastructure, by making servitudes and other facilities available faster and more readily to licensed operators, thereby reducing the deployment time for new infrastructure, ensuring expedited roll-out of competitive networks, resulting in better offerings for the consumer.

“Cities that have chosen to be world-class ICT hubs have typically adopted this approach, together with other incentives, strongly encouraging high-tech companies (like Neotel, and some of its customers) to invest in their cities,” Neotel concluded.

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