It may be seen as a case of hedging its bets, but it appears that MTN will be prepared to work with whichever consortium is eventually awarded the second network operator (SNO) licence.
According to Yvonne Muthien, group executive, corporate affairs at MTN, the cellular operator has indicated its desire to support the SNO with access to its infrastructure and other resources, should the opportunity to do so arise.
"MTN has entered into a non-exclusive agreement with the Two Consortium bid, but we believe our involvement will enhance the viability of the SNO and enable the new operator to save costs and launch its new services in the shortest possible time, whoever is awarded the licence," she says.
Muthien says that what Two Consortium has in mind is to lease spare capacity on MTN`s next-generation network, which will allow it to deliver what is termed "last mile" service, meaning that Two would piggyback on MTN`s network and thus avoid the costly capital expenditure involved in setting up a fixed-line service.
Two`s Per-Olof Jansson says the two organisations have had a "meeting of minds" in terms of the potential working agreement, and that should it come to fruition, it would allow Two to set up a fixed mobile network which will see it grow market share rapidly.
Although Two would be using the cellular provider`s network to provide fixed mobile calls at land-line rates, Jansson believes that such deal would be good for both parties.
"Yes, MTN may experience some kind of loss initially in terms of GSM rates versus fixed-line rates, but I believe that something like this will expand and grow the market, so no one will lose in the end," says Jansson.
A source at another cellular provider says that while it would depend on what arrangement the two parties will strike up, there are reasons why cellular providers do not charge calls at fixed-line rates.
Muthien says the whole issue of GSM versus fixed-line rates will not be an issue at all. "Two would be leasing spare capacity on our network and would be charged commercially viable rates for this, so there would be no problem in this regard," she says.
"There would be no competition, as there would be no infringement on each others` markets, it would simply be a commercial agreement which would utilise our spare capacity and provide them with the opportunity to avoid the massive expenditure and long-term roll-out that would be required to set up an ordinary fixed-line network."
Regarding the issue of interconnection rates, ITWeb was told there are both commercial and regulatory constraints on charging different rates to different providers.
"The important thing to remember is that if the SNO offers better termination rates between fixed and cellular, Telkom will have to follow suit, and this will be good news for consumers, who will obviously be the real ones to benefit," says Muthien.
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