MTN SA and Neotel today (15 January) signed a historic joint agreement to co-build the planned national long-distance fibre-optic network. The network will cover a distance of 5 000km, connecting the major centres across South Africa.
Says Tim Lowry, MD of MTN SA and VP: SEA Region of the MTN Group: “This co-build agreement with Neotel marks the largest collaboration in the South African telecommunications industry, and is a defining moment in the history of the industry. The partnership has enabled us to enhance shareholder value and has substantially reduced infrastructure and operational costs.”
”The collaboration of these two companies signifies a bold step towards convergence in the South African telecommunications space,” says Ajay Pandey, CEO and MD of Neotel. “We have seen so many exciting developments in the industry since late last year, and believe that this partnership is a significant milestone as we redefine the telecommunications landscape.”
The first route of the national fibre network will extend from Gauteng to KwaZulu-Natal, incorporating Pietermaritzburg and Durban. Construction of the first leg is expected to commence in the first week of March 2009 with a completion date scheduled before the FIFA World Cup 2010. This initial route will play a significant role in both companies' goals to take Africa to the world and bring the world to Africa, by linking up with the undersea cables such as Eassy and Seacom currently under construction along the eastern coast of Africa.
The optic fibre network will provide both companies with almost infinite bandwidth capacity to carry more information (voice and data) at higher speeds over greater distances using far less power than copper cables.
The deployment of high-speed, quality voice and data transmission is vital to remain competitive within the industry and to improve the overall customer experience for both MTN and Neotel customers in the converged mobile and fixed line arenas in terms of availability, reliability and cost-effective end-to-end solutions.
Currently MTN is reliant on third-party transmission provisioning from Telkom, but has struggled to get enough links and provisioning capacity which is constraining the development of the network. While both companies have different objectives for building the network, these support their collaboration on this co-build project.
Comments Lowry: “Bringing a partner or partners on board to deploy the optic fibre network was integral to MTN's self-provisioning plans from the start. By sharing the costs and infrastructure with Neotel in rolling out this ambitious project, MTN is benefiting through the substantial Opex cost savings we will achieve.
“Self-provisioning, although somewhat of a buzzword in the industry, is a strategic imperative for MTN to ensure network quality and to create a positive growth platform across South Africa and globally. With Neotel on board, we will only need to dig a single trench to serve both companies' need. This will ensure that our customers benefit from the improved services in the long run with the least disruption to the environment and road-users during the construction phase,” states Lowry.
Says Ajay Pandey, CEO and MD of Neotel: “One of our core objectives has always been to bring down the cost of communications in South Africa - this can only truly be achieved when we completely self-provide.”
With the latest developments in the telecommunications sector further accelerating the liberalisation of the market, one of the major concerns raised has been that of the cost of building a network. “It makes sense for us to work together in building this infrastructure as it will enable us to bring services to a broader group of customers and furthermore reduces the direct cost of building that network,” says Pandey. He believes that going this route should eventually lead to a reduction in telecommunications costs.
Lowry concurs, stating that it has become imperative for MTN to build its own network if the company is to maintain its current competitive data offering.
“MTN's transmission strategy is well advanced and we have significant plans underway which deploy other technologies such as point-to-multi-point radio and microwave systems in order to provide alternative and quality enhanced transmission solutions to meet and exceed our current demands.
“All these offerings are being put in place to benefit our customers and improve the overall MTN customer experience,” concludes Lowry.
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MTN Group
Launched in 1994, the MTN Group is a multinational telecommunications group, operating in 21 countries in Africa, Asia and the Middle East. The MTN Group is listed on the JSE Securities Exchange in South Africa under the share code: "MTN". As at 30 September 2008, MTN recorded 80.7 million subscribers across its operations in Afghanistan, Benin, Botswana, Cameroon, Cote d'Ivoire, Cyprus, Ghana, Guinea Bissau, Guinea Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo Brazzaville), Rwanda, South Africa, Sudan, Swaziland, Syria, Uganda, Yemen and Zambia. The MTN Group is a global sponsor of the 2010 FIFA World Cup South Africa and has exclusive mobile content rights for Africa and the Middle East. Visit http://www.mtn.com.
Neotel
Neotel is South Africa's first converged communications network operator. It provides a range of value-added voice and data services for businesses, wholesale network operators and providers and consumers using its pure-IP Next Generation Network, powered by Neotel's high-performance fibre-optic backbone. Neotel connects the major centres in South Africa to each other and to the world, directly linking the country into Tata Communications global Tier 1 network. Neotel offers fresh thinking, a creative approach and flexible solutions for communications in South Africa.
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