Telkom bashing

IF THE BUSINESS community isn’t lashing Telkom for its pricing policy, then it’s its competitors dragging the telecoms behemoth to South Africa’s Competition Commission alleging predatory pricing.

Add to that consumer complaints concerning second-rate speeds of local broadband, Telkom bashing – coined to describe consumer lobbyists and industry stakeholders’ incessant attacks on the incumbent fixed line operator’s pricing policy – has become something of a national sport.

In yet another development indicative of the frustration concerning SA’s broadband and bandwidth constraints, Johannesburg is the latest to join a growing number of municipalities rolling out their own IT networks.

Following the successful deployment of a microwave 18GHz backbone (running at 100 Mbps/second), Herklaas du Plessis – Johannesburg municipality’s deputy director for information technology – says that its IT support systems are now almost independent of the Telkom network.

Though Du Plessis wouldn’t be drawn on the cost of Jo’burg’s infrastructure, he says that the municipality was able within three months after deploying the new backbone to realise a steep return on its investment.

Says Du Plessis: "Estimated fiscal savings as a result of deploying our own backbone is roughly R3,5m/month, translating to R42m/year. The savings could even be higher, as the R42m figure accounts only for data services. We’ll now spend around R2m/year on maintenance costs.

"But you have also got to take into account the fact that we now have access to bandwidth big enough to enable us to roll out our own IP telephony network. We still use the Telkom network, but only for voice services.

If the Johannesburg mayoral committee buys into the municipality’s ICT department’s strategy to extend services beyond the precincts of the city, then end users – including small businesses and academic institutions within the Johannesburg metropole – will soon have access to affordable broadband.

"If our proposal is accepted, then we intend entering into private partnerships with businesses looking to provide affordable ICT services to Jo’burg’s residents."

Though Du Plessis was guarded, reports indicate that the municipality, in partnership with City Power (its power distributing subsidiary) is piloting a project that could soon result in extending ICT services to outlying areas of the city.

The project – involving deploying broadband over power lines (BPL) to outlying residential areas – is at an advanced stage, with Florida and Roodepoort being picked as pilot sites. BPL is cutting edge technology that turns every power point in homes and offices into a potential network point.

Says telecoms analyst Richard Hurst: "If the Johannesburg municipality succeeds in its efforts to introduce BPL, that will go a long way in addressing SA’s broadband access and affordability conundrum."

Hurst says that the main impediment regarding broadband rollout to a wider market has been the legal issues with regard to SA’s loop – the cables that extend from telephone exchanges to homes and businesses.

With Telkom’s argument that it owns the infrastructure it has effectively elbowed out other telecoms players from providing services to end-users.

However, BPL completely bypasses the SA loop, because any home receiving electricity can access the services. With BPL, every power point in a home/office can become a network point by simply plugging in a modem, with the power grid becoming an IP network.

Though acknowledging that Jo’burg is doing its best to allow access to broadband, Hurst is extremely cynical concerning its capacity to offer a comprehensive range of telecoms services.

"Much as wireless technology is easy and cost effective to deploy, do they (municipalities) have the technical capacity required to successfully offer an efficient and reliable telecoms service? Yes, they can fill in the gaps where Telkom has failed to deliver, but you must also understand that telecoms service delivery is not their core competency."

Tshwane (Pretoria) and Knysna are the other municipalities in SA that have successfully deployed their own IT backbone, thus effectively disconnecting Telkom from their IT spend. Since deploying a fibre optic backhaul network, Charles Kuun – who heads Tshwane municipality’s global digital hub – says that Tshwane is now able to save in excess of R50m/year.

"Our fiscal savings will increase in due course, considering that we’ve only freed about 75% of our ICT services from the Telkom network."

Kuun adds that the city is already providing full services to local businesses and academic institutions. However, he emphasises that’s mainly being done to prove the concept.

Records at SA’s telecoms regulator indicate that Ethekwini (Durban), the Nelson Mandela metropole (Port Elizabeth) and Buffalo City (East London) have been granted private telephony network (PTN) licences.

Discuss this article

Other stories in Finweek this week
–Nokia holds top spot
–Managed Liberalisation not the way

Latest news

Share this article
Telkom bashing