Neotel plans for bandwidth needs
National bandwidth
Neotel will use both its own network and that of InfraCo for its national bandwidth needs.
Neotel has a well established inner-city fiber network, and through its recent agreement to acquire Transtel it will gain some inter city capacity. It will however still rely heavily on InfraCo for inter-city capacity for the first few years of operation.
Neotel has a four year exclusivity agreement with InfraCo, and has further reached an agreement which gives them the option to maintain this network, although they are not under obligation to do so. Neotel said that they are currently exploring an outsource model for this part of their operations.
Ajay Pandey, MD at Neotel, said that while they will consider building their own network after their exclusivity agreement with InfraCo expires, it will depend heavily on the business case at that time. He further said that it is even possible to acquire capacity from Telkom if it makes business sense for the second national operator.
International bandwidth
International bandwidth remains very expensive in South Africa, mainly because of Telkom’s monopoly on the SAT3 submarine cable system. Telkom’s SAT3 exclusivity agreement is however about to expire, and this may give Neotel the opportunity to compete with Telkom through their shareholder VSNL which is also a shareholder in SAT3.
Pandey said that Neotel, through their partner, has raised this issue at the appropriate level but that they unfortunately have not received any positive news to date.
The Neotel MD pointed out that he feels strongly that Government and ICASA should declare the SAT3 landing station an essential resource, this will give Neotel the opportunity to compete head on with Telkom in the international bandwidth space.
Pandey noted that this move will allow the second national operator to provide a full international circuit to clients, and while this is not the only option it is the most practical, especially in the short and medium term.
Neotel is also involved in EASSy, but this is not the only SAT3 alternative in the pipeline and they are also involved with SEACOM. SEACOM is a new proposed cable which will follow the same route as the EASSy cable down the eastern seaboard but it will either connect internationally directly into Italy or India via VSNL.
Pandey said that Neotel is considering all the options for their short term, medium term and long term needs. Non-exclusive access on SAT3 will definitely be the best short term solution for more affordable international bandwidth access for them, but it is clear that they are looking beyond SAT3 for their future needs.
Bring the Internet to South Africa
The second national operator has previously indicated that they plan to ‘bring the Internet to South Africa’, but this will require a large amount of both national and international bandwidth.
Neotel however seems to be well aware of the bandwidth needs which a well established broadband network places on an operator, and with many proposed submarine cable projects looming on the horizon, Telkom’s monopoly on international bandwidth may be coming to an end.
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