New player warms up
Communications minister Ivy Matsepe-Casaburri is expected to announce before the end this month that Sentech is being given the green light to provide the kind of switched-voice telephony that, until now, has been provided only by Telkom, Vodacom, MTN and Cell C.
Sentech, which will offer voice services on all its network platforms, including its satellite and broadband wireless systems, has promised it will compete aggressively with the incumbent operators on price. It says it will introduce unmetered voice products. SA consumers have not enjoyed unmetered telephony since Telkom discontinued flat-rate local calls in 1982.
Sentech plans to offer voice services on its MyWireless third-generation (3G) cellular data network, on its VSat satellite products and on its BizNet Xpress wireless offerings.
There will be challenges, though. For one thing, Sentech’s MyWireless network is built using a type of 3G, known as UMTS-TDD, that few of the big cellular operators worldwide have deployed. Most 3G implementations – including those of Vodacom and MTN – use UMTS-FDD, which, theoretically, is more suited to voice.
Because most of the large operators have chosen FDD, and not TDD, for their 3G networks, equipment manufacturers have invested most of their research and development funds in the former technology. That means there are more FDD handsets available and they are also cheaper than TDD handsets.
But Sentech’s MyWireless portfolio manager, Winston Smith, says that might not matter. Both TDD and FDD networks are geared to offer voice and data, he says.
Sentech chose TDD for a number of reasons. At the time, the TDD standard was more advanced than FDD. Also, TDD uses "unpaired spectrum" – two separate frequencies can be used to transmit and receive data – making it easier and cheaper to acquire access to scarce radio frequency spectrum.
"We still believe that TDD has significant potential," Smith says. "T-Mobile in the Czech Republic has deployed the product commercially. Sprint Nextel in the US is doing extensive trials on TDD. And Japan’s IPMobile has chosen TDD for an 8 000 base station rollout.
"We are looking at deploying voice because we know the technology roadmap shows that it’s quite possible," Smith says. "There are other UMTS-TDD operators that have deployed voice on their networks."
Though it hasn’t contracted suppliers yet, Sentech is conducting a trial with Swedish equipment maker Dovado. "We haven’t made our minds up that we will use Dovado’s products, but the company is affiliated to the UMTS-TDD alliance and manufactures products specifically for TDD."
It was important for Sentech that it was not a "guinea pig" and that other TDD operators first built voice networks to prove the business case. Smith says he is aware of two other operators that have launched commercial TDD voice services – Germany’s Airdata and New Zealand’s Woosh Wireless. Airdata is selling mobile voice services, using cellular handsets from UTStarComm. Woosh offers a fixed-wireless option designed to compete with Telecom New Zealand, the fixed-line incumbent.
Initially, Sentech will also only offer a fixed-wireless solution. This is because the MyWireless coverage map – where Sentech’s base stations provide access – is very limited. There is little contiguous coverage . Only once Sentech has grown its coverage map dramatically will it begin offering mobile telephony to compete with the cellular operators.
This may happen sooner rather than later, though. Sentech has been promised funding by government to build a national broadband network. Though government hasn’t yet committed itself to a number, it is expected to grant Sentech at least R400 million to build this infrastructure.
Rivals may balk at what some consider to be unfair competition – private-sector rivals have to raise capital in the market and can’t rely on government hand-outs – but Smith feels there is a danger that Sentech could quickly fall behind, especially if it doesn’t begin its network deployment soon. MTN, Vodacom and smaller rival Wireless Business Solutions are rapidly expanding their networks, Smith says. Sentech, on the other hand, hasn’t built much new infrastructure for MyWireless since the network’s initial deployment more than two years ago.
Sentech, which drew fire early on for poor service and network problems, says it will take care in ensuring its voice network will offer consumers the quality of service they expect. To do this, it is upgrading the core of its network. It will also enhance the access component of the network – the part that connects consumers. This will mean ensuring that when a customer places a voice call, a dedicated voice channel, with a minimum guaranteed throughput, is created on the MyWireless network. After the call is completed, the channel will be reallocated dynamically for data.
Smith says Sentech is in no rush, particularly when it comes to mobile telephony. "We’ve learnt that being first is not necessarily best," he says of the company’s early teething troubles.
TDD handset costs are also still too high, given the newness of the technology, Smith says. "It would be a lot cheaper in the fixed-wireless environment."
Initially, Sentech will offer only bundled products. Its broadband Internet customers will be offered cheap telephony bundles. Also, the service will probably at first work only between Sentech customers. The ability to call other operators will come later, once the regulator, the Independent Communications Authority of SA (Icasa), has dealt with the high interconnection fees that operators charge one another to terminate calls on each other’s networks. Icasa is expected to tackle this issue in the next few months as part of its review of regulations pertaining to interconnection and facilities leasing.
Because it will focus initially on fixed-wireless, and not on mobile telephony, Sentech’s initial target will be Telkom. Cellular will follow later. Smith says Sentech will price its services aggressively and introduce flat-rate telephony. "We will be flat-rated but there will be limits [on call lengths]," Smith says.
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