A showdown is looming between Telkom and municipalities across the country as they begin to roll out their own telecommunication networks.
One municipality, Knysna, is already using its own wireless network even though it has received a warning from Telkom. It plans to offer wireless services through a private company to consumers from early next year.
Other municipalities have pilot projects, are testing networks, conducting feasibility studies, completing business plans and selecting private sector partners to offer these services.
Major municipalities that are rushing to offer Internet services from next year include Johannesburg, Cape Town, Durban and Tshwane. They aim to halve their telecommunication costs and promise huge potential savings for consumers who use their networks.
Tshwane is ahead of the pack. It has conducted eight pilot projects and is rolling out infrastructure.
While the smaller towns are likely to opt for wireless technology, the larger municipalities are likely to use a combination of wireless, fibre-optics and cables — currently used to supply electricity.
In February this year, Minister of Communications Ivy Matsepe-Casaburri allowed municipalities to lease spare infrastructure capacity to licenced telecoms operators.
However, when the first network was set up in Knysna by Internet service provider UniNetwork (UniNet), Telkom sent the company a letter claiming its network in Knysna was illegal and threatened to sue for loss of earnings.
UniNet CEO David Jarvis said the company is in talks with 35 municipalities across the country and is close to finalising deals with at least two of them.
Knysna’s director of finance services Grant Easton said that, when the municipality initiated the project two years ago, he had travelled to nearby George to talk to Telkom and invited it to participate.
“There was silence from them, until they came to us and said you can’t do this,” said Easton.
Jarvis has accused Telkom of using “underhand tactics” to prevent its broadband roll out in the south-eastern Cape. Telkom refuted this.
Jarvis told The Herald Online that, while Telkom had requested regulator the Independent Communications Authority of South Africa (Icasa) to look into the matter, indicating that clarity was required, it nonetheless informed UniNet’s clients that the network was illegal.
“Telkom has in fact addressed this matter in a way that is wholly transparent and open,” said Lulu Letlape Telkom’s group executive of corporate communication.
Telkom has claimed that, according to the Telecommunications Act of 1996, UniNet is not entitled to provide a private telecommunications network, while UniNet claim that its value-added network services licence allows it to do so.
Icasa councillor Zolisa Masiza said the municipality’s attempts to provide affordable telecoms access was “commendable” and as long as it was leasing its spare infrastructure capacity to do so, it was legal.
“For us, since the Telecommunication Act was drafted in 1996, a lot has changed, yet we are still using the same law. We are confined by legislation, that is why the regulatory framework needs to change,” said Masiza.
Dene Smuts, Democratic Alliance spokesperson on communications, said the new Electronic Communications Bill would allow value-added network services to build infrastructure of any size below district or local municipality scope with a class licence. “They can offer any service under a class licence for electronic communication services,” says Smuts.
Masiza said Icasa was studying the Knysna case before it decides on regulation, but if UniNet was building the network for the municipality, it was okay. If it was building the network for itself it was illegal.
David Gale, head of telecoms service provider Storm, said competition is the only thing that will bring prices down.
“Regulation is clumsy and can end up affecting areas of the market that no one realised it would. Regulation seldom gets it spot on,” said Gale.
“I heard somewhere that telecoms are just legal firms with an antennae on the top. Most telecommunication firms know every trick in the book to cloud the issues and entrench their monopoly position,” said Gale.
Storm is running pilot projects in conjunction with the City of Tshwane municipality, testing a variety of technologies such as wireless, power-grid communcation and fibre optic cables.
Charles Kuun, head of the Tshwane Digital Hub, said it began investigating the potential for utilising spare infrastructure capacity to provide affordable telecoms six years ago.
Kunn said the municipality’s motives are purely socio-economic. “We look at it as an enabler of growth. We believe the country can reach an 8% growth rate if municipalities get involved in this,” says Kuun.
Gale said it was testing power line communication where residents could access broadband Internet and voice over Internet protocol by simply plugging a modem into an electricity socket in their house.
Gale said Kuun’s dream was to drive telecoms costs down by 90% in Tshwane but admitted he did not know if that would be possible. “I have a feeling it would be more like 50%,” he said.
Gale said Storm had held talks with the City of Johannesburg, City of Cape Town, eThekwini, Stellenbosch, Paarl and Somerset West.
Cape Town UniCity’s infrastructure manager Douglas Geldeblom said it was looking at options for its own network and should have completed its strategy by early next year.
Dave van Niekerk of the City of Johannesburg economic development department said it had spent the past 18 months researching their best way forward and by February next year it will have completed its business model and feasibility study.
Come on down, the oysters and wireless Internet, are fine
If you thought Knysna was only known for its oysters, think again. The small coastal town, a famous Garden Route tourist destination, has staked its claim to be South Africa’s first wireless nirvana, reports Lloyd Gedye.
A wireless network that will blanket the whole of the town, including the informal settlements, is expected to be completed by the end of this month.
The network will provide broadband and voice over Internet protocol (VOIP). Anybody on the network, including those using public phones connected to the network, will be able to make a local call for free.
The first phase of the project called “UniFi” will connect all the town’s municipal offices, libraries and schools as well as the homes of municipal officials.
Internet service provider UniNetwork (UniNet) is rolling out the wireless network on behalf of the Knysna municipality, a contract that is worth R2,5-milllion over the next five years.
“The vibe in town is very positive, people are excited,” says Knysna’s director of financial services Grant Easton. “Everybody is also saying when is Telkom going to shut you down?”
Easton estimates that the project will save the municipality about R5-million over the next five years, however, he says most of the savings will come in years four and five.
UniNet CEO David Jarvis says the project is entirely wireless and there is no dependence on Telkom lines or any existing infrastructure, and formal and informal settlements will be covered. “We are providing coverage where there is none or very little existing coverage,” says Jarvis.
Phase two of the project will see UniNet offering broadband and VOIP services to the communities of Knysna. By March next year 30 public phones will be set up in informal settlements that will allow people free local calls to other VOIP phones.
“We will also be selling handsets like cellphones that use wireless technology,” says Jarvis.
The handsets, which will offer 100 minutes of free call time before charging for calls at a discounted rate, will retail for about R1 000 but Jarvis says they are looking at alternative handsets that could be as low as R400.
Easton says the intention with the network was never to compete with the telecommunications company but merely to do what was best for Knysna in terms of economic development.
“Knysna punches above its weight as an international and national destination. We have to keep the rich coming here as the income is important to the town and the poor communities surrounding Knysna,” says Easton.
According to Easton, Knysna is changing from a four-month town to an 11-month town. He wants to get the message to people that they don’t have to be in Johannesburg to do business, they could be sitting on their boat in the lagoon.
Knysna High School, principal Herman Mellet says: “It’s a great opportunity for the municipality to get involved in the school. For years we’ve been paying municipal bills second to none. We think it’s a wonderful gesture.”
“We think it’s fantastic,” says Tracey from the Knysna Public Library, who would not reveal her last name. “It has already benefited us quite a bit. It benefits communication in the various departments of the municipality, which are quite spread out. And it’s cheaper in the long run. In terms of our library system, we will end up paying far less for our portline costs. I like the fact that we are all connected.” — Additional reporting by Tumi Makgetla