{"id":548582,"date":"2006-04-21T07:10:42","date_gmt":"2006-04-21T07:10:42","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/548582-don-t-expect-miracles.html"},"modified":"2006-04-21T07:10:42","modified_gmt":"2006-04-21T07:10:42","slug":"don-t-expect-miracles","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/548582-don-t-expect-miracles.html","title":{"rendered":"DON\u2019T EXPECT MIRACLES"},"content":{"rendered":"

Long-suffering consumers, tired of high telecommunications prices and lousy service, have been pinning their hopes on the recently licensed second network operator to bring down prices and give Telkom a run for its money in fixed-line telephony. They\u2019re set to be deeply disappointed. <\/font><\/p>\n

SNO Telecom, as the second network operator is known for now, says it will not intentionally start a price war with Telkom. Nor will it be able to compete head-on with the incumbent. <\/font><\/p>\n

That\u2019s the warning from the company\u2019s new MD, Ajay Pandey, who says SNO Telecom wants to raise about R7bn to build its network over the next five years. That\u2019s less than 25% of the R30bn investment Telkom will make in its network over the same period. <\/font><\/p>\n

\u201cExpectations are very high but . we are not here to trigger a price war,\u201d Pandey says. <\/font><\/p>\n

Rather, SNO Telecom will focus on customer relationships and on providing solutions that will differentiate it from its rivals. \u201cThat\u2019s where the customers will hopefully see some tangible value.\u201d <\/font><\/p>\n

Pandey is reluctant to give away too much of the company\u2019s strategy. He says it\u2019s too early to comment in detail. He does say, however, that the issues that bedevilled the company in its early days \u2014 when shareholders and prospective shareholders were at each other\u2019s throats \u2014 have been resolved. <\/font><\/p>\n

Of particular interest to Pandey and his management team is the telecom infrastructure owned by shareholders Transnet and Eskom Enterprises, which together own 30% of SNO Telecom. Pandey says this infrastructure will form the basis of the company\u2019s network backbone. \u201cThe intention is to transfer these assets to the SNO,\u201d Pandey says. \u201cThey would hopefully give us a good presence right from the start.\u201d <\/font><\/p>\n

These assets will help only up to a point, though. The company will have to raise billions of rand to expand this core network and to build a national access network. It plans to raise the R7bn it estimates it needs through a combination of debt and equity. Pandey says he expects that both local and international banks will be interested in providing the necessary finance. <\/font><\/p>\n

SNO Telecom should begin offering its first services to the wholesale market \u2014 Internet service providers and the like \u2014 by midyear. Thereafter, it will begin selling to corporate customers. Residential consumers will follow only next year, provided the company can get access to the radio frequency spectrum it needs to build a wireless access network. <\/font><\/p>\n

There could be a hiccup, though. State-owned broadcast signal distributor Sentech is opposing a proposal by the regulator, the Independent Communications Authority of SA (Icasa), that the 800MHz frequency band, which is currently used for television broadcasting, be reclassified for use by telecom operators (see Technology & Communications April 14). <\/font><\/p>\n

Fixed lines are another option. Planned policy changes may mean SNO Telecom will be able to make use of Telkom\u2019s last-mile infrastructure \u2014 the local loop of copper cables that connects consumers to its network. <\/font><\/p>\n

But Pandey warns that, though unbundling the local loop is a \u201cgood thing\u201d, it requires detailed regulations and it could take some time to craft these. He emphasises that access to the right frequency spectrum is essential, particularly if the company is to provide telecom services to the rural poor. <\/font><\/p>\n

Pandey says SNO Telecom has seen \u201ctremendous excitement\u201d from individuals, corporate buyers and Internet service providers. The market, he says, wants choice. \u201cAnybody and everybody wants to know how soon we can be up and running.\u201d <\/font><\/p>\n

But he does not believe that the company will be able to capitalise on anti-Telkom sentiment to win business. \u201cWe\u2019ll gain [customers] if we offer something good. We cannot match the size of Telkom\u2019s network. We are just coming [into the market],\u201d he says. \u201cWill we take Telkom head-on? I think the answer to that question is no.\u201d <\/font><\/p>\n

SNO Telecom currently has fewer than 20 employees at its head office in Woodmead, north of Johannesburg, and several vacancies in management remain, including the position of chief financial officer. Angus Hay has been seconded from Transnet subsidiary Transtel, where he is chief technology officer, to head strategy. Indian nationals Pravir Dahiya and Harjit Singh are head of networks and principal executive officer respectively. <\/font><\/p>\n

India\u2019s VSNL, which has a controlling 26% stake in SNO Telecom, has the right to appoint the company\u2019s MD and chief financial officer.<\/font> <\/p>\n

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SNO Telecom cautions prospective customers that it will not be able to tackle Telkom head-on.<\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-548582","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/548582"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=548582"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/548582\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=548582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=548582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=548582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}