Telkom’s plan for better, cheaper broadband

To lower the cost to communicate operators should share the cost to build networks. This is the view of Telkom CEO Sipho Maseko.

In a column in Business Times, Maseko said that there is a “need to expand the reach of communication services and take broadband into underserviced areas”.

“If operators duplicate the building of networks, it will cost more, and consumers will ultimately pay more. If we share the cost required, we will all reduce our capital expenditure and this could lower the cost of communication”.

Maseko said that duplication in the public sector is a particular concern, adding that government and the private sector should work together to “provide top class products at low cost”.

This concept is not new. In 2012 Cell C CEO Alan Knott-Craig said that a great way to decrease the input costs faced by operators, which would result in lower prices, is to have one national wholesale operator.

He added that this network should not be government owned or controlled, and suggested a consortium which involved both government and the private sector.

Former Vodacom CEO Pieter Uys previously argued that such a wholesale network, provided the right frequency spectrum is made available to it, is actually particularly suitable to cover rural areas.

Uys said that since it is hardly profitable for operators to roll out data networks in these areas, a combined effort will make the most sense to operators and South Africa as a whole.

Former MTN South Africa CEO Karel Pienaar also supported the concept of an open access LTE network in the past, which he said could provide broadband access to rural and peri-urban areas.

Pienaar explained that the cost of rolling out a wireless broadband network in areas where backhaul is not available is costly, and there is typically no business case to support such an investment.

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