The second fixed line operator to enter the South African market after Telkom`s exclusivity expires is likely to be largely government-owned. The Department of Public Enterprises has confirmed that Eskom and other parastatals are looking at ways of combining their resources into a single bidder for the licence.
"We expect, when events have progressed further, to make an official announcement on the details," says Zaid Nordien, director of the public relations office for Public Enterprise. He says Eskom chairman Reuel Khoza yesterday told a telecoms and IT conference that he had received a government directive to look at the formation of the combined company.
Denel, and its now-private IT arm Ariel Technologies, has also been named as a possible participant, as has the telecommunications division of Transtel. The new company is expected to be formed in 12 to 18 months.
Khoza told a conference hosted by financial services group HSBC and CCH that Eskom Enterprises has developed a very fast way to lash a fibre optic cable to existing electricity cables without interrupting power transmission. He estimates that broadband fibre communications between Cape Town and Bulawayo can be installed in four months by 15 men using one helicopter. Eskom has 250 000km of high voltage lines connecting "every centre of commerce and industry".
Using electricity infrastructure to expand telecommunications coverage is one of the best options available, the head of HSBC`s European telecoms team Steve Scruton told the same conference. He says gas and railway infrastructure can also be used, and railroads often give better penetration to urban areas. "You don`t have high-voltage pylons running through the centre of a town with any kind of environmental regulations." But using any existing infrastructure is preferable to the alternative. "You can negotiate with all the farmers from here [Johannesburg] to Cape Town to dig a two meter trench through their land."
Scruton suggests that a new fixed-line operator acquires a systems integrator, something not known to be considered for the new South African contender. However, he warns that an integrator strategy could be dangerous for incumbents. "Systems integrators have a lot of power over telecoms operators and could divert business to new entrants [if they resent the alliance]. But as a new entrant you have nothing to lose."
Eskom line workers, supported by a helicopter, can use a specialised lashing machine to install fibre optic cables on the ground wires of high voltage lines. Kelvar tape is used to hold the optic cable in place and the installation can be done, as most line maintenance is, on active lines.
One substantial benefit of this method, Scruton says, is avoiding the prevalent problem of cable theft. "This thing is 60 feet in the air and has a high voltage power line running below it. Nobody is going to climb up there and take it down."
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