MTN and Neotel have clubbed together to build a new national fibre network, spanning 5 000km and costing up to R2-billion. The first leg of the network, from Johannesburg to Pietermaritzburg and Durban then on to Mtunzini to hook up with the Seacom undersea cable, will be completed as early as July this year.
In what is being billed as the biggest collaboration in the South African telecommunications industry, the two companies will share costs of surveys, trenches and project management. Each will lay its own fibre and run its own terminal equipment.
By working together, MTN SA's MD Tim Lowry believes each will save about R500-million off to the estimated R1,7-billion to R2-billion each would incur if they were to go it alone. The door is also open for other players to come into the project, Lowry adds.
The full 5 000km network is expected to be completed within two years.
Lowry points out that this project is the first that MTN and Neotel are working on together, and they will likely find other areas to collaborate in future.
However, he stresses that there is no joint venture or share swops between the two companies.
Engineers from the two companies explain that the network will offer unlimited bandwidth capacity, with the terminal equipment determining how much is delivered to users. An initial 10Tbps capacity is being planned.
"For MTN and the country, building this network reduces our reliance on Telkom's transmission quality and links," Lowry says. "And we all know that Telkom has been struggling to deliver over the last few years."
MTN expects to save an initial R200-million per year just on its payments to Telkom, rising to about R300-million a year by 2012, he adds. And, without self-provisioning, the Telkom bills would have undoubtedly risen, so the new network helps to defray future costs as well.
For customers, he believes the new network will offer them better connectivity and will soon result in lower prices.
Ajay Pandey, CEO of Neotel, adds that Neotel has always encouraged partnerships.
"The collaboration of these two companies signifies a bold step towards convergence int he South African telecommunications space," he says. We have seen so many exciting developments in the industry since late last year, and believe taht this partnership is a significant milestone as we redefine the telecommunications landscape.
For Neotel, the new network will offer redundancy to the Infraco network while also providing additional capacity.
"One of our core objectives has always been to bring down the cost of communications in South Africa – this can only be achieved once we completely self-provision," Pandey adds.