Telecoms infrastructure takes off
Telecoms groups Telkom and MTN are pumping billions of rands into rolling out more infrastructure to meet an insatiable appetite for voice and data services and improve the sometimes shaky quality of their networks.
MTN has earmarked R7bn for upgrading its network in SA this year after admitting that the quality was not what it ought to be. “A lot of the issues that you see with congestion will start to disappear,” MTN’s senior manager for data, Brian Seligmann, promised at a conference hosted by online forum MyBroadband. “Improving the overall experience for every one of our subscribers is important.”
User demand was so strong that SA’s cellular operators could no longer afford to lease enough backbone from Telkom to link their base stations, so they must supply their own. But it was an expensive process, Seligmann said, with fibreoptic lines costing R1000 a metre.
Demand for data was “absolutely astronomical” with MTN’s data traffic rising 20% a month. “The problem for mobile operators is that we have always built our networks to handle voice traffic,” Seligmann said. The changing traffic patterns as data boomed meant they had to alter the technical structure of their networks.
Vodacom is investing more than R3bn in broadband data networks. Although its capacity was improving it could still do better, said CEO Pieter Uys. It would also keep watch on the prices charged by rivals and respond accordingly. More than 500000 people use its mobile data services, and that is expected to rise dramatically in coming months as data prices keep falling.
Vodacom Business division director Wally Beelders said providing its own backbone capacity to base stations would cut the cost of bandwidth substantially.
Uys said Vodacom was going through a major change as Telkom shed its stake and the UK’s Vodafone became its controlling shareholder. That opened up new opportunities by giving it far more access to research and development skills that Vodafone had not always shared with it. The closer relationship arising from the change of ownership had already let Vodacom bring Apple’s iPhone to SA, and BlackBerry’s latest handset, the Storm, was developed for Vodafone and would also be sold in SA.
Telkom is also expanding its network and widening its range of services to counteract losing the highly profitable contribution from its Vodacom stake. Telkom plans to sink R30bn into its network over five years to improve its coverage, capacity and data services delivery.
“People want data and content everywhere they go. We need to build a network that can cater for that,” said Mike Vos, its senior manager for technical product development.
Revenue generated for each bit of data traffic would drop as bandwidth became a commodity. But consumers should never expect data to be free because of the high cost of constructing a network, Vos said.
A court victory granting hundreds of voice and internet providers a licence to build their own networks would probably not see massive new infrastructure being built because of the high cost, speakers at the conference said.They would need their own spectrum to operate, and the industry regulator had yet to clarify how spectrum would be divided up between the licence holders.
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