/ 15 January 2009

MTN, Neotel to build 5 000km fibre-optic network

Africa’s biggest cellphone operator MTN and South Africa’s second biggest fixed-line operator Neotel will build a national long-distance fibre-optic network for between R1,7-billion and R2-billion.

MTN’s head of Southern Africa Tim Lowry told a news conference that having its own cable would save the company R200-million in operating costs in 2009, and more in the future, once the whole cable is rolled out.

The network will cover a distance of 5 000km, connecting the major centres across South Africa.

This co-build agreement with Neotel marks the biggest collaboration in the South African telecommunications industry, and is a defining moment in the history of the country, said Lowry.

”The partnership has enabled us to enhance shareholder value and has substantially reduced infrastructure and operational costs,” he added.

Ajay Pandey, CEO and MD of Neotel, said the collaboration signifies a bold step towards convergence in the South African telecommunications space.

The first route of the national fibre network will extend from Gauteng to KwaZulu-Natal, incorporating Pietermaritzburg and Durban.

Construction of the first leg is expected to commence in the first week of March 2009 with a completion date scheduled before the 2010 Fifa World Cup.

Infinite bandwidth
This initial route will play a significant role in both companies’ goals to take Africa to the world and bring the world to Africa, by linking up with the undersea cables such as Eastern Africa Submarine Cable System (EASSy) and Seacom, which are currently under construction along the eastern coast of Africa.

The optic-fibre network will provide both companies with almost infinite bandwidth capacity to carry more information (voice and data) at higher speeds over greater distances using far less power than copper cables.

The deployment of high-speed, quality voice and data transmission is vital to remain competitive within the industry and to improve the overall customer experience for both MTN and Neotel customers in the converged mobile and fixed-line arenas in terms of availability, reliability and cost-effective end-to-end solutions.

Currently MTN relies on third-party transmission provisioning from Telkom, but has struggled to get links and provisioning capacity which impacts on delivery turnaround to clients, and is both costly and unreliable.

Substantial cost savings
”Bringing a partner or partners on board to deploy the optic-fibre network was integral to MTN’s self-provisioning plans from the start. By sharing the costs and infrastructure with Neotel in rolling out this ambitious project, MTN is benefiting through the substantial cost savings we will achieve,” said Lowry.

”But, more importantly, it means that we are no longer reliant on buying fibre bandwidth from Telkom to provide our clients and customers with a quality service they have come to expect from MTN as a leading service provider.

”Self-provisioning, although somewhat of a buzzword in the industry, is a strategic imperative for MTN to ensure network quality and to create a positive growth platform across South Africa and globally.

”With Neotel on board, we will only need to dig a single trench to serve both companies’ needs. This will ensure that our customers benefit from the improved services in the long run with the least disruption to the environment and road-users during the construction phase,” added Lowry.

”One of our core objectives has always been to bring down the cost of communications in South Africa — this can only truly be achieved once we completely self-provision,” Pandey added.

”It makes sense for us to work together in building this infrastructure as it will enable us to bring services to a broader group of customers and furthermore reduce the direct cost of building that network,” said Pandey.

He believes that going this route should eventually lead to a reduction in telecommunications costs.

Lowry concurred, stating that it has become imperative for MTN to build its own network if the company is to maintain its current competitive data offering.

”MTN’s transmission strategy is well advanced and we have significant plans under way which deploy other technologies such as Point to Multi-point radio and microwave systems in order to provide alternative and quality-enhanced transmission solutions to meet and exceed our current demands.

”All these offerings are being put in place to benefit our customers and improve the overall MTN customer experience,” Lowry said. — I-Net Bridge, Reuters