---

MTN, Neotel to build national network

16 January 2009

Pan-African cellular operator MTN and fixed-line operator Neotel are to jointly build a 5 000km fibre-optic cable network connecting several major centres across South Africa.

According to an article by Engineering News this week, the total cost of building the network will be about R2-billion, while the two companies will be able to save between R400-million and R500-million in capital and operational expenditure as a result of working together.

"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," MTN South Africa MD Tim Lowry said in a statement this week.

'Almost infinite bandwidth'

The first phase of the national fibre network will run from Gauteng to KwaZulu-Natal province, incorporating Pietermaritzburg and Durban, and also linking up with undersea fibre-optic cables such as Seacom, which is currently being laid, and Eassy.

Construction of the first phase is expected to start in March, with completion ahead of the country's hosting of the Fifa World Cup in June 2010.

According to the statement, the fibre-optic network will provide both companies with "almost infinite" bandwidth capacity to carry more voice and data information, at higher speeds, over greater distances, and using less power than conventional copper cables.

"The collaboration of these two companies signifies a bold step towards convergence in the South African telecommunications space," said Neotel CEO Ajay Pandey. "We have seen so many exciting developments in the industry since late last year, and we believe that this partnership is a significant milestone as we redefine the telecommunications landscape."

Self-provisioning, reduced costs

By having their own network in place, both companies will no longer have to rely on competitor Telkom to provide them with bandwidth capacity, which MTN said was both costly and unreliable.

In addition, Lowry pointed out that the two companies working together on the fibre-optic network had an added benefit, in that they would only need to 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," he said.

Pandey pointed out that a core objective of Neotel was to bring down the cost of telecommunications in South Africa - a task which the company believed could only be achieved through self-provision.

"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 reduces the direct cost of building the network," he said, adding that he believed the move would eventually lead to a reduction in telecommunications costs.

SAinfo reporter