State hangs up on Telkom, dials Neotel
The contract, awarded to Neotel by the State Information Technology Agency, will see the second network operator providing government departments with a faster, more advanced “new generation network” for the next five years.
The new infrastructure replaces the old government common-core network, which was built on Telkom’s infrastructure and launched in 2003.
The network has not been upgraded since then, despite capacity requirements growing by 150percent each year.
The Neotel deal was concluded in May last year and migration of technology and information in government departments was completed last month.
Llewelyn Jones, Sita’s chief executive, said: “Users may not have seen a major difference with their screens, but they surely noticed a difference in speed.
“We will shortly be adding converged services which will include video and voice capabilities.”
Telkom is losing its grip on the telecommunications market because of its inability to adapt to the fast-changing environment.
The Sita contract is the second major deal that Telkom has lost to Neotel that it would normally have been awarded by default.
Tenet, a non-profit organisation that runs a national research and education network, awarded a R192-million two-year contract to Neotel and Internet Solutions for a third-generation communications network for academic research.
Experts say consumers can expect lower land-line telephone prices as competition causes the parastatal to rethink its monopoly position.
Telkom still has a monopoly in asymmetric digital subscriber lines, a high-speed Internet technology, but limited coverage is causing customers to seek other technologies.
Rudolph Muller, MyADSL director, said: “Telkom's business is coming under pressure. They will have to drop their prices if they want to remain competitive.
“MTN and Vodacom are creating competition for Telkom’s ADSL products with higher speeds in their wireless offerings.”
Neotel chief executive Ajay Pandey said the company would announce a consumer offering within 100 days.
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