Cell C gets 1800MHz

Johannesburg, 24 Aug 2001

Cell C says its frequency spectrum licence was formally issued earlier this month, removing one of the two remaining stumbling blocks for its planned pre-Christmas launch.

The licence, issued on schedule in early August, gives Cell C the right to operate its service in both the 900MHz in use by MTN and Vodacom, and in the 1800MHz frequency which has to date not been used in local networks.

The 1800MHz frequency is narrow-but-deep and can carry larger quantities of data than 900MHz but with a smaller coverage area, necessitating more base stations. Cell C plans to have 550 of its own base stations operational in urban areas by year-end, while its users will roam on the Vodacom network when outside Cell C coverage.

"In effect, access to the 1800 spectrum means that Cell C can make use of technology which will reduce the likelihood of dropped calls and network congestion during peak periods," says CEO Talaat Laham in a statement.

Because of its data capacity, 1800MHz is better suited to generation two-and-a-half (2.5G) services such as GPRS (General Packet Switched Radio System). Cell C says its network will be ready to offer GPRS from day one, but that it plans to introduce such offers only later next year.

The company is proud of what it says will be a network superior to that of either MTN or Vodacom, as GSM technology has advanced since the incumbents built their infrastructure. However, it says this will not be used as a marketing point.

"We most certainly will have a superior network," says spokesman Zwelakhe Mankazana. "But if you ask me if we will use that as our main marketing drive the answer is no. It will be around issues of service and quality, around people more than technology."

The spectrum licence also gives Cell C access to 900MHz, and a roll-out of a network in rural areas based on it is to start in January next year.

MTN, Vodacom, Telkom and the second national operator, a competitor to Telkom to be introduced in May, are all to receive access to 1800MHz early next year in accordance with government`s policy directions on telecommunications.

Bartering with Telkom

With the frequency licence in place, Cell C faces one more major hurdle: negotiations with Telkom.

The companies have to conclude an interconnect agreement to allow their subscribers to reach numbers on each other`s networks. But Telkom has a long running dispute with MTN and Vodacom on the interconnect agreements in place with them, saying the terms are skewed in favour of the cellular players.

Telkom has not been able to force a renegotiation of the agreements to date, but has been testing a redirect service, which uses a voice over Internet protocol (VOIP) link to route calls internationally instead of directly to MTN and Vodacom. International calls fall outside the interconnect agreements.

Cell C has said it expects an agreement on the exact same terms as those enjoyed by the incumbents, but Telkom is expected to be reluctant to grant that.

Mankazana says an agreement with Telkom is expected to be announced shortly. Agreements on the sharing of infrastructure, such as base station towers, are expected even sooner. Negotiations on both are ongoing.

So what can we expect?

Paul Doany, chief advisor to Cell C, confirms that GPRS will not be available until sometime next year, although testing on services could start as early as November. He also does not foresee the company introducing high-speed circuit-switched data, a system which provides data rates slightly higher than the average cellular throughput.

However, content services may be on the market soon. "We may have a bit of a surprise for the market," he says.

The company will be using 32k SIM cards from launch, giving it the ability to provide SMS-based data services similar to those currently offered by MTN. It will also have the ability to offer unified messaging, and Doany says "very basic types of data services providing tailored information" and eventually transactions, are in the pipeline.