Cellular operator targets fixed-line internet market
South Africa's biggest cellular provider, Vodacom, is aggressively pursuing an entry into the fixed-line internet business market with the establishment of a new entity, Vodacom Converged Solutions, and a R7 billion investment to build a fibreoptic network.
So far, Telkom and Neotel compete in the fixed-line space, although Neotel's impact has not yet materialised.
Vodacom chief executive Alan Knott-Craig said the company had been competing with Telkom since the beginning. "I don't believe customers care what the technology is that delivers the service. They want a good quality of service at good costs and high availability. To shy away from fixed-line because only one company's been involved really is silly and we need to take the opportunity while we can."
Vodacom said the network would allow it to create additional capacity for internet growth as demand has doubled since it reduced prices earlier this year.
"Data traffic in South Africa is growing at a rate that can't be sustained by the current transmission capacity," said Knott-Craig, adding that Vodacom needed to ensure there was enough infrastructure for the transmission of data.
To fast-track its entry into the market, Vodacom would buy an existing internet service provider. This would be finalised in the next three months. Vodacom already has a 10 percent stake in iBurst, a high-speed internet provider.
Vodacom Converged Solutions will initially focus on the corporate market and offer a full range of services on one integrated electronic communications network, including WiMax.
Knott-Craig said the market could expect services from early next year. "We believe this area of business has the potential to grow bigger than Vodacom is today."
Vodacom reported a 366 percent increase in high-speed internet subscribers to 139 000. Telkom increased asymmetric digital subscriber line subscriber numbers by 78.1 percent to 255 633. It is targeting 420 000 by the end of March next year.
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