MTN SA and Neotel today (15 January) signed a historic joint agreement to co-build the planned national long-distance fibre optic network. The network will cover a distance of 5 000km, connecting the major centres across South Africa.
Says Tim Lowry, MD of MTN SA and VP: SEA Region of the MTN Group: “This co-build agreement with Neotel marks the biggest collaboration in the South African telecommunications industry, and is a defining moment in the history of the country. The partnership has enabled us to enhance shareholder value and has substantially reduced infrastructure and operational costs.”
”The collaboration of these two companies signifies a bold step towards convergence in the South African telecommunications space,” says Ajay Pandey, CEO and MD of Neotel.
“We have seen so many exciting developments in the industry since late last year, and believe that this partnership is a significant milestone as we redefine the telecommunications landscape.”
The first route of the national fibre network will extend from Gauteng to KwaZulu-Natal, incorporating Pietermaritzburg and Durban. Construction of the first leg is expected to commence in the first week of March 2009 with a completion date scheduled before the FIFA World Cup 2010.
This initial route will assist MTN and Neotel to link up with the undersea cables such as EASSy and SEACOM currently under construction along the eastern coast of Africa.
The optic fibre network will provide both MTN and Neotel with almost infinite bandwidth capacity to carry more information (voice and data) at higher speeds over greater distances using far less power than copper cables. MTN said that its initial network will have a capacity in the Tbps range.
“The deployment of high-speed, quality voice and data transmission is vital to remain competitive within the industry and to improve the overall customer experience for both MTN and Neotel customers in the converged mobile and fixed line arenas in terms of availability, reliability and cost-effective end-to-end solutions,” said MTN.
Currently MTN is reliant on 3rd Party transmission provisioning from Telkom, but has struggled to get links and provisioning capacity which impacts on delivery turn-around to clients, and is both costly and unreliable. While both companies have different objectives for building the network, these support their collaboration on this co-build project.
Comments Lowry: “Bringing a partner or partners on board to deploy the optic fibre network was integral to MTN’s self-provisioning plans from the start. By sharing the costs and infrastructure with Neotel in rolling out this ambitious project, MTN is benefiting through the substantial Opex cost savings we will achieve.
“But,” he continues, “more importantly, it means that we are no longer reliant on buying fibre bandwidth from Telkom to provide our clients and customers with a quality service they have come to expect from MTN as a leading service provider.
“Self-provisioning, although somewhat of a buzzword in the industry, is a strategic imperative for MTN to ensure network quality and to create a positive growth platform across South Africa and globally. With Neotel on board, we will only need to dig a single trench to serve both companies’ requirements. This will ensure that our customers benefit from the improved services in the long run, with the least disruption to the environment and road-users during the construction phase,” states Lowry.
Says Pandey: “One of our core objectives has always been to bring down the cost of communications in South Africa – this can only truly be achieved once we completely self-provision.”
With the latest developments in the telecommunications sector further accelerating the liberalisation of the market, one of the major concerns raised has been that of the cost of building a network. “It makes sense to work together in building this infrastructure as it will enable us to bring services to a broader group of customers and furthermore reduces the direct cost of building that network,” states Pandey. He believes that going this route should eventually lead to a reduction in telecommunications costs.
Lowry concurs, stating that it has become imperative for MTN to build its own network if the company is to maintain its current competitive data offering.
“MTN’s transmission strategy is well advanced and we have significant plans underway which deploy other technologies such as Point to Multi-point radio and microwave systems in order to provide alternative and quality enhanced transmission solutions to meet and exceed our current demands. All these offerings are being put in place to benefit our customers and improve the overall MTN customer experience,” concludes Lowry.