Telecommunication – not a fly-by-night business
Speaking at the first of a series of breakfasts to celebrate the centenary of the South African Institute of Electrical Engineers, Neotel’s MD and CEO, Ajay Pandey said that progress in telecommunication in South Africa has been by default and not design. He said that Neotel’s entry into the local market is making significant inroads to change that.
Pandey told the audience that Neotel was much more than a new business or a telecommunications company. “From the outset Neotel was labelled as the second network operator but no one wants to be second in life,” he said. “So the first thing we did was to change that label to ‘the first converged network operator’. We made that shift as we are bringing something entirely new to South Africa.
“Building a telecom company is a very capital-intensive operation; we are spending some R11-billion over a period of time to establish our next generation network. From four people when we first arrived in the country in December 2005, today we employ a 1000 strong workforce.”
Neotel realised from the start that if the company was to get enough skilled staff to make a real impact in South Africa they had to seriously look at training. The company could have thrown some money at it, but opted for keeping to its objective to make a real difference and launched the Neotel Academy to train people — particularly from the previously disadvantaged community — in telecommunications technology. After completing their training graduates have the opportunity to take up employment with Neotel or look for greener pastures with other companies.
“When we arrived in South Africa, we started on a journey that has been very satisfying and a journey that I believe has made a difference in how business is done today,” said Panday.
Neotel’s major projects have been truly massive. The backbone itself spans some ten to twelve thousand kilometres of fibre cable. The company has introduced code division multiple access (CDMA) wireless technology to the country, has already installed 150 base stations and is planning to double that number during the next year. “If all goes well we may triple the CDMA network, ensuring that our network reaches every corner of the country, providing people with the type of internet experience not seen before.”
One of the latest Neotel developments is the establishment of a data centre in Midrand and one is under construction in Cape Town. “The data centre is an example of a fresh new modular design, with energy-efficient technologies allowing the highest data centre cooling density. This is particularly important in the South African context following severe electricity shortages last year as well as Eskom’s latest proposed price hikes.
Efficiency issues and solutions in the data centre include a design that must minimise power overheads and thereby drive power efficiencies all the way to the power socket. Also, improved cooling techniques such as water-chilled and hot row/cold row methods, will further limit power utilisation,” Pandey said.
He referred to the cost of international bandwidth, and although it has dropped since Neotel’s entry into the market, he believes that it will be further reduced when the Seacom project comes into its own in the next month. The contact centre industry had lost business opportunities because of high connectivity cost. “We are in the same time zone as Europe and with future cheaper bandwidth, South Africa should be able to recapture some of that business.” He said that the four sub-marine cable projects to be completed in the next two years should bring connectivity prices down and that we can expect higher internet speeds and bandwidth, which will trigger another business growth spurt.
Much is happening in the telecommunication sector but Pandey believes the market is moving towards consolidation. “A few months ago Independent Communications Authority of South Africa issued 400 telecommunication licences; were these 400 licences or 400 sheets of paper? Telecommunications is not a fly-by-night business. It is about serious investment, serious efforts, it is about people, it is a service industry, it is about creating infrastructure and about bringing in new technologies. I wonder what is happening with those 400 sheets paper? I believe that only those companies who have infrastructure, the technology and who can make a real difference, will succeed.
“I am often asked what the government can do to set the rules of the game.
“I am of the opinion that our regulations don’t have to be reinvented. If something works in the rest of the world why do we want to re-invent it? Bill Gates gave us a good cut and paste feature in Windows. Copy and paste good practices and get on with life. Let the sector grow. If we don’t take the leap in our regulatory environment, technology will overtake regulation,” he said.
Telecommunications business discussion
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