Broadly speaking
Municipalities have long been annoyed with the high cost of telecommunications and have often spoken of developing their own telecom networks to save costs.
Not only will shifting voice and data traffic from Telkom’s network save them millions of rand, it will also enable municipalities to offer cheaper broadband services to residents and businesses.
But the move has been a long time coming. It is six years since municipalities started muttering about running their own broadband networks.
The biggest obstacle has been Telkom’s threat of legal action. It argued that, under the old Telecommunication Act, municipalities did not have the right to provide telecom services. But last year’s introduction of the Electronic Communications Act changed this, providing municipalities with a legal framework for operating their own networks.
The cities are a real threat to Telkom. They have had basic telecom infrastructure in place for years and access to buildings that can be used as bases for running wireless broadband services.
A 2003 report by the Association of Municipal Electricity Undertakings argued that running their own networks would not only cut costs but would generate revenue for municipalities through the leasing of their infrastructure to telecom companies.
eThekwini (Durban) is alive to this. It is upgrading its network to “carrier class” to make it available to telecom players.
Apart from the Telkom problem, the metros have to determine which department should be responsible for running the network — whether it should be the city power division, which controls telecom infrastructure, or some other municipal body.
Johannesburg has resolved this by housing all its telecom assets in a new structure. It has put out a tender for the running of its network.
The city will announce its candidate short list in the third week of August, says Stephan Mkhawane of Ernst & Young’s business advisory services, which is managing the process. Johannesburg is expected to declare the winner in the first quarter of next year.
Cape Town is still in the process of defining the controlling structure to run its network but this has not stopped it from putting out a tender to manage the network. It is committed to creating its own high-speed broadband network and is drawing up budgets and timetables, says Cape Town councillor Demetri Qually, who chairs the subcommittee set up to look into the network.
Cape Town may be sketchy on the details but there is no doubting its ambitions. It wants its network, which is expected to cost R400m, to be ready by 2009. “We are trying to put in a telecom infrastructure in the same way as we have a road network,” says Qually.
eThekwini has not been idle, either. It has built its own fibre network and is putting together a tender to manage it. “We are hoping to put out the management tender by end-August,” says Jacquie Subban, head of geographic information and policy at eThekwini.
Not all cities are faring so well. Tshwane, once the leader in municipal networking, has fallen off the pace. Says Charles Kuun, who oversees the capital’s network plans: “We’ve had three operating officers in four years. Under the current structure there is no operating officer.”
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