Neotel, Telkom go head-to-head

By Candice Jones for Neotel
Johannesburg, 16 Mar 2009

Neotel has stepped up the roll-out of its next-generation network (NGN), hot on the heels of Telkom's increased marketing around its own.

The second national operator says it has enlisted the services of Cisco's metro Ethernet offering to connect to corporate customers. Neotel announced the roll-out of its NGN last year, and has connected several corporate clients to its service.

Cisco's metro Ethernet switching technology is being used by several large-scale telecommunications businesses globally, including the likes of Nortel. Using an IP-based technology will allow companies like Neotel to provide a wide range of services.

The offering is being used as a basis for many global companies as a means to allow both consumers and businesses to connect to operator backbones using fibre. While Neotel had not confirmed this at the time of publication, the Cisco switching could be preparation for fibre-to-the-home.

Neotel's current strategy is not consumer-focused and it is rather more likely Neotel will roll-out fibre-to-the-business, before it takes on the consumer market.

One step ahead

According to Richard Hurst, programme manager for communications for Africa at IDC, it makes sense for Neotel to leverage the masses of fibre it has already set in the ground. “Fibre-to-the-home and -business is definitely on the cards for them.”

He says connecting companies using a fibre-based platform is only logical, especially when based on practices of international companies using the same technology.

According to a statement from Neotel MD and CEO Ajay Pandey, the services currently available on the NGN are still limited to voice and data. However, he notes services will be expanded to include IPTV, video-on-demand, gaming, digital media and broadcast capability, among others.

Neotel's youth has lent it an advantage in the race to roll-out its NGN, since it has little legacy technology to deal with. Since its initial launch, the company has been working towards the deployment of a converged network.

Hurst explains Telkom is lagging slightly behind Neotel in its NGN deployment. “They have a large legacy network to convert to more modern technologies. If it were a horse race, Neotel would be a nose ahead.”

Telkom stepping up

Since the details of the unbundling of Vodacom from Telkom were released, the fixed-line giant has been pushing the marketing of its own NGN.

The company has decided to funnel much of the finances it will receive from the sale of its mobile arm, into the roll-out of a converged network. The move seems to be in response to growing competition, specifically from Neotel.

Telkom and Neotel are not the only operators looking at converged services; the mobile operators are also looking at the option to combat increasingly saturated mobile penetration in SA.

With the looming landing of undersea cables that are expected to boost international capacity, as well as local operators' national fibre networks, all operators will be looking at grabbing the customer through new services.