Tata-led consortium to build South Africa’s optical fibre network

By Fakir Hassen, IANS,

Johannesburg : The Tata-led Neotel consortium and mobile phone giant MTN South Africa have signed an agreement to jointly build a 2 billion rand ($202 million) 5,000-km optical fibre network that will connect all major centres across this country.

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This joint venture is not only expected to improved telecommunications and reduce costs for consumers but will also connect Africa to the rest of the world with the undersea cables EASSy and SEACOM, currently under construction along the eastern coast of Africa.

”The collaboration of these two companies signifies a bold step towards convergence in the South African telecommunications space,” said Ajay Pandey, CEO and managing director of Neotel.

“We have seen so many exciting developments in the industry since late last year, and believe that this partnership is a significant milestone as we redefine the telecommunications landscape,” he said.

MTN South Africa managing director Tim Lowry added: “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.”

Neotel is South Africa’s first converged communications network operator. It provides a range of value-added voice and data services for business, wholesale network operators and providers and consumers using its pure-IP Next Generation Network, powered by Neotel’s high-performance fibre optic backbone.

Neotel connects the major centres in South Africa to each other and to the world, directly linking the country into Tata Communications global Tier 1 network.

The MTN Group is a multinational telecommunications group, operating in 21 countries in Africa, Asia and the Middle East. MTN hogged the headlines for weeks last year amid rumours of a merger with Indian giant Reliance Communications, which fell through later.

Their new venture will reduce the dependence of MTN and Neotel on Telkom, the former state-owned fixed-line operator.

Lowry said Telkom was not able to provide everything that the industry required though MTN was paying a billion rand annually to Telkom for using its infrastructure.

Neotel currently uses the services of Infraco, the state-owned infrastructure company. Pandey said the new venture would not result in Neotel ending this relationship.

Although there would be a saving of about half a million rands and environmental benefits by digging up a single trench to lay the cables across the country, MTN and Neotel will each have their own optical fibre cable in the single trench.

The costs of between 1.7 billion and two billion rands would be shared equally between MTN and Neotel.

“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.