Neotel ‘not another Sentech’
Neotel has come under fire from some of its subscribers for poor network performance and a lack of pro-active feedback about network related problems. These problems are closely related to the fast growth of Neotel’s subscriber base – currently increasing at around 150 new users per day – and subsequent oversubscription in certain regions.
This is however nothing new in the local broadband market, and the first wireless broadband provider in South Africa, Sentech, has learned the hard way that a company should address these problems very quickly to avoid suffering irreparable reputation damage.
One telecoms expert working closely with many of the country’s largest telecoms operators has now warned that Neotel is running the risk of ‘becoming a second Sentech’ unless they address their network congestion problems quickly.
He says that Neotel’s tower congestion problems and consumer unhappiness look very similar to Sentech’s battles back in 2004 – something which caused Sentech significant reputational damage which it never really recovered from. Sentech has recently announced that it will exit the retail broadband market completely in the near future.
According to the industry expert, who asked to remain anonymous due to his ties with various telecoms players, the solution to Neotel’s problem is rather simple: roll out more towers, and fast. Site acquisition and environmental approval can be challenging, but he said that there are ways to ensure things get done quickly.
He further said that it is perplexing that Neotel is taking so long to provide their subscribers with a bandwidth usage monitoring system. According to him the Neotel network has the core functionality built in, and that his company can “implement a system to provide users with full usage stats in less than 24 hours.”
Neotel responds
Neotel seems well aware of the issues it is facing and agrees that more towers are needed to address the current network problems. “We are planning to double the number of sites within the next six months, as well as adding channels on heavily-loaded sites,” Neotel said.
“We typically do not have any backhaul bottlenecks, and our accelerated rollout of sites is based both on extending coverage, as well as capacity growth where we have measured high load. We have responded to the much higher than expected demand for our services by putting in place an new rollout plan and contractors to make all of this possible.”
Neotel said that the establishment of new sites remain one of the biggest issues in their network expansion plans, and it “is certainly one of the potential delaying factors in network rollout.”
“We manage this in multiple ways, including an increased use of shared sites, as well as better management of the acquisition process, to meet planning targets.”
The implementation of a bandwidth usage monitoring system is high on the list of many Neotel subscribers, something which the company said will be here soon. “We are currently busy with Impact Assessment. The implementation is imminent,” Neotel said.
‘Not another Sentech’
Neotel says that it is definitely not another Sentech and that, apart from the comments in the market about their rollout not keeping up with demand, they have very little in common with Sentech as a wireless Internet access provider.
Neotel gave very specific reasons why it is far better suited to deal with the network issues it is facing, including:
• Neotel has established South Africa’s first national converged services IP backbone, carried over a high capacity (many tens of Gbps), and highly scalable national fibre backbone, as well as more than 3000 km of metropolitan area networks. It is this network that provides the backhaul for our wireless services, and our fibre-based enterprise services.
• Neotel has become an important player in the wholesale and enterprise markets, for example delivering the highest capacity service in the market (NeoMetro Link, a Metro Ethernet service up to 1 Gbps), as well as converged voice, data and Internet services over fibre to many enterprise customers. In this, as well as the consumer market, Neotel’s converged offering includes the most cost-effective carrier grade voice service in the market, which is already carrying many millions of voice minutes nationally, and internationally through Tata Communications, the world’s largest carrier of international voice.
• Neotel has extended the Tata Communications global Tier 1 IP network (which carries about 15% of all Internet traffic) into South Africa, making use of multiple submarine cables. Neotel is the only player with direct capacity and connectivity on SAT-3/SAFE, SEACOM, and, in future, EASSy and WACS. As a key player in the Internet in South Africa, Neotel carries a rapidly increasing proportion of South African Internet traffic, with high capacity connectivity / peering to all the major players in the market.
• Neotel is an ISPA member, and an active supporter of JINX, as well as the soon-to-be-established CINX, and abides with ISPA’s rules in its interaction with customers and other players in the market.
• Neotel has established two world-class Internet Data Centres (Midrand and Cape Town), which are on Neotel’s national backbone, with high availability fibre connectivity nationally an internationally. (SEACOM capacity is delivered in South Africa at Neotel’s Data Centre in Midrand, not Mtunzini, and the Cape Town Data Centre is connected to SAT-3.)
• In addition to all of the above credentials, Neotel has the backing of its strong private shareholders and lenders for a capital investment programme of more than R 10 billion over the next few years, including further national fibre backbone growth (co-build with MTN), as well as continued rapid growth of metropolitan fibre and wireless access networks. Neotel aims to be responsive to the needs of its customers and the market, and is focussing this investment where it best serves these needs, which will include new, market-changing products to be introduced.
Neotel’s strong backhaul network and international backing should serve to reassure their subscribers that the company is well positioned to improve its network performance, but unless the service levels of subscribers, who are currently experiencing problems, improve it may be seen as little more than lip service.
Neotel versus Sentech – give your views
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