Telkom trials mobile

By Nicola Mawson for Telkom

Johannesburg, 23 Jun 2009

Fixed-line telecommunications operator Telkom is expected to wrap up market research and trials for its entry into the mobile market by the end of the year.

CEO Reuben September says the company aims to exploit opportunities created after it unbundled its Vodacom stake.

Telkom has 141 W-CDMA sites in major metropolitan areas throughout SA. It says the liberalisation of the licensing arena, advancements in convergence technology, as well as the unbundling of its Vodacom stake - which saw the end of the shareholders' agreement with Vodafone - pave the way for it to enter the mobile market.

Telkom says there has been a “continued decrease in our voice revenue” as people use cellphones rather than landlines. One area of growth that it seeks to use to mitigate this is to enter the mobile market. Fixed-line traffic declined 3.9% during the year.

The telecommunications company aims to take advantage of its next-generation network and newer technologies. It believes this will “give us an advantage over the current mobile operators in terms of our ability to carry increased traffic, provide superior quality and to compete”.

In its annual results for the year to March, the company says it believes an “integrated fixed-mobile operator” is well positioned to meet its customers' requirements. This is due to “mobile customers experiencing the effects of a highly congested network and poor quality of service”.

Wait and see

In April, Telkom's full mobile offering was expected to get off the ground in the last quarter of this year.

However, Telkom says that - because the other mobile operators are entrenched in the market - it will not commit any capital to rolling out the network until it has finished its market research.

MTN, Africa's largest mobile operator, had 17.4 million South African subscribers at the end of March. Vodacom, SA's largest operator, had 26.5 million subscribers at the end of December, while Cell C - SA's third operator - has more than five million subscribers.

Telkom says its final mobile version depends on wrapping up market research and roaming agreements. It aims to differentiate itself based on price, efficient IP-enabled technology and fixed-mobile converged products.

Look-alike beats copper

Telkom's initial sites have been focused in areas where there have been cable theft, breakages and “incident-prone” areas. It has also focused on areas where customers are waiting for service and greenfield areas where it has no copper infrastructure.

It says the W-CDMA technology allows it to “deploy fixed-line look-alike services with regional fixed numbering plans, instead of deploying copper, especially in high copper theft areas or areas where copper deployment is not feasible or too slow to roll out”.

The deployment will be extended to rural areas and will also be used to replace maintenance-heavy legacy equipment.