Telkom moves ahead with NGN

By Nicola Mawson for Telkom
Johannesburg, 06 Nov 2006

SA's first fixed-line operator, Telkom, has already invested almost R5 billion as it increases capital spend and moves towards a next-generation network (NGN).

The fixed-line operator plans to spend another R25 billion in the next four years, reaching a total of R30 billion in its customer centricity drive. Total capital spend in its fixed-line arena - up to the end of March - totalled R4.9 billion, says CTO Thami Msimango. The remaining spend, he says, will "increase the capacity of our network; the evolution to a fully enabled Internet Protocol (IP) network".

An analyst - who asked not to be named - points out that Telkom's results presentation to the end of March indicates that only 40% of its 2007 spend will be on NGN. The rest, he says, will be spent on IP systems, legacy systems and the last mile upgrade, among other aspects.

Telkom's fixed-line spend for 2007 is expected to reach R5.9 billion. This is 18% of its sales revenue in this area, he says. Telkom spent 15.1% of its fixed-line sales income on capital expenditure in 2006.

The fixed-line operator's increased spend - which is in line with government's targets to increase gross fixed capital formation to 25% of the country's revenue over the next few years - is a response to the need for improved technology and to be more competitive, says the analyst.

Telkom's current network has an average life of 13 years, while the copper component is older than this, he says. In addition, Neotel, the second national operator, will be expected to leapfrog straight onto an IP network.

Complex technology

Msimango points out that NGN is not a single technology, but is made up of different components and technologies. "Some of these have already been deployed in the Telkom network."

He says, for example, ADSL has been in the network for a few years and an "IP network has also been in existence for several years". During the last financial year, the company started rolling out the NGN synchronous digital hierarchy, and a soft switch has already been installed.

"During 2007, we expect to begin deployment of WiMax," he says, with other technologies to follow including metro Ethernet, a passive optical network and symmetric high-bit-rate digital subscriber loop.

The expected benefit for end-users, states Msimango, includes "greater control and personalisation, ease of migration between services, as well as offering continuity of existing public switched telecommunications network line services".

He adds that customers will be able to, for example, view television through the broadband pipe, as well as access Internet service providers using a WiFi network.