Neotel bags spectrum

Johannesburg, 30 Mar 2007

SA's second national operator, Neotel, has received a spectrum licence from the regulator, allowing it to bypass the local loop.

This week, the Independent Communications Authority of SA (ICASA) confirmed it had awarded an 800MHz licence to Neotel. Spokesman Sekgoela Sekgoela confirmed the licence allows Neotel to use CDMA technology to roll-out wireless network infrastructure.

As the second fixed-line operator, Neotel will be able to establish its network at national level.

Richard Hurst, senior telecommunications analyst at BMI-TechKnowledge, says this will allow the company to bypass Telkom's local loop and provide services to residences and smaller businesses.

Government earlier this year formed a task team to investigate the local loop unbundling process. The committee should deliver a report on the matter to communications minister Ivy Matsepe-Casaburri by mid-year, the Department of Communications stated earlier this year.

However, Neotel had already said it would go ahead, with or without unbundling, while Telkom previously said the process would take years.

Good news

Neotel MD Ajay Pandey says the company has been moving ahead with its plans to introduce a variety of voice and data services in spite of the delay. These offerings include high-speed Internet and broadband access services for the consumer segments.

"We are on track and ready to roll-out initial services to consumers around the middle of the 2007."

Hurst says the awarding of the licence is good news, as it is central to Neotel's CDMA strategy. CDMA will give Neotel the ability to offer voice and data at higher speeds. He says the licence should allow Neotel to provide a cost-effective fixed-wireless solution. This, he says, could enable Neotel to circumvent the local loop, which is still to be unbundled.

Hurst says as the telecoms landscape changes, the company will be able to offer mobile wireless. Neotel's Web site says the 800MHz frequency band "is critical for ensuring consumers benefit optimally from technologies such as CDMA".


ICASA chairman Paris Mashile said the allocation of the spectrum would "open up access to new, innovative and world-class technologies, and the provision of services to low-income consumers for whom telecoms has previously been unaffordable".

Hurst points out CDMA handsets are available at a low cost, which will allow Neotel to start filling its universal service obligations.

The allocation follows Neotel's application in December, after ICASA said non-broadcasting companies could apply for spectrum in the 800MHz band.

In preparation for the allocation, Neotel tasked Motorola with designing a radio frequency plan for the CDMA network.

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