Siemens wins SNO deal

Johannesburg, 25 Oct 2001

In a joint statement released this morning, Eskom Enterprises and the Siemens Information and Communications Group announced that Siemens will be the technology partner for the roll-out of a national fibre optic backbone for the second national operator (SNO).

"Contract negotiations are in the final stages of completion for a multimillion-rand network roll-out, and details should be finalised within the next fortnight," the companies say.

Work on the project is to start in January with a switch-on date in April. The SNO is generally expected to be operational in May.

Siemens says it beat Alcatel, Nortel Networks and Marconi in the final round of bidding for the contract.

The Siemens I & C group is currently rolling out the mobile network for Cell C after winning that contract earlier this year. The Cell C deal was valued at $221 million, now more than R1.8 billion.

However, the Cell C roll-out started after the company had a licence. The Telecommunications Amendment Bill, which makes provision for the SNO, is being presented to the National Assembly in Parliament today. Although it is generally expected that there will be an SNO and that Eskom Enterprises will form part of it, nothing is certain yet.

The equity percentage Eskom Enterprises will hold in the SNO via its Esi-Tel subsidiary has also not been determined, although Eskom has called for a stake in the region of 30%.

However, Siemens Telecommunications COO Pete da Silva says his deal is with Eskom, regardless of its status in the SNO, even though the network will be planned as the SNO backbone.

"At this point the [Telecommunications] Bill is still being negotiated," he says. "We don't know what role Eskom will play and we don't know the share they will have, but we are really excited about being involved and are setting resources aside for it."

Because of the tight timelines involved, Da Silva says he expects any majority partner with the ability to overrule Eskom to be glad the deal was struck.

As for the four-month timeframe, Da Silva says the company has taken some chances and has some of the necessary equipment on hand. He is confident the deadline can be met.

Capacity is also not expected to be a problem, even though the company will still be rolling out Cell C base stations when it starts work on the Eskom project.

"This is a problem I always said I wanted to have," Da Silva jokes. "We will use the same strategy [as with Cell C] and use partners extensively. We will use local talent and develop the SA industry, and if we need to rely on the Siemens worldwide force we will do it."

Network planning is underway and more details are expected with the signing of a formal contract during November.

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