SA's largest cellular operator Vodacom SA has established a company that will go head-to-head with the fixed-line business of 50% shareholder Telkom.
Speaking this morning at the presentation of the company's financial results, Vodacom Group CEO Alan Knott-Craig said the local operation would follow global trends and set up its own fixed-line network.
"Unlike our other locations, Vodacom SA does not provide its own infrastructure. However, this year will see our first big move into this arena. In all cellular companies around the world, you see a move to fixed-line interests and vice versa. The fact is the only part of mobile that is mobile is the last mile," he said.
The new company, Vodacom Converged Solutions, will start by building six or seven pilot optic fibre rings in metropolitan areas to create additional capacity for data growth.
While this will initially be a case of self-providing, the group says it aims to on-sell additional services to customers by next year at the latest.
"Converged Solutions will initially focus on the corporate market and offer a full range of services on one integrated electronic communications network, including virtual private networks, WiMax and an ISP," said Knott-Craig.
Competition for Telkom
The move into the fixed-line market means Vodacom is positioning to compete directly against part-shareholder Telkom. However, this is a position that Knott-Craig noted had been ongoing for 14 years.
"We've been competing against Telkom since the beginning. I don't believe customers care what the technology is that delivers the service. They want a good quality of service, at good costs and high-availability. To shy away from fixed-line because only one company's been involved really is silly and we need to take the opportunity while we can," he explained.
"There are two reasons why we are doing this. Firstly, we need to ensure there is enough infrastructure for the transmission of data as we just don't have enough spectrum available.
"Second, is price - we are getting good prices now, but we can't afford to be solely dependent on one provider or another. Of course we may change our mind about laying down our own infrastructure if high-quality infrastructure becomes available at better costs."
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