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Apr 16, 1999

New bidder for fixed-line network no 2

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Telecom provider to Transnet, Transtel might become a legal entity in its own right by the end of the year, Transtel transmission networks CEO Michael Nuttall tells Engineering News.

“If we are to become involved in a second fixed-line telecom network, we will have to become a legal entity to conform to the provisions of the South African Telecom Act.

“We are seriously considering participation, be it as individual bidder for the second network, or as part of a consortium, in the same way as we are shareholders in cellular operator MTN,” says Nuttall.

In the case of MTN, the company used to have a 20% shareholding; however, as time went by, it increased this to 30%.

Nuttall believes that the company has a huge advantage over other potential bidders for the second network since it already has its own extensive network.

The company owns an independent transmission infrastructure that includes cable, microwave radio, fibre-optic links and satellite terminals.

This network supports data trunks, private telephone exchange junctions, trunked radio systems, and various customised systems.

“Should we be awarded the licence, we will focus mainly on services for big corporations in areas where Telkom does not provide a service.

“We will never be the same size as Telkom, but believe that, by capturing even a small share of the market, we will be able to deliver a cost-effective service,” reports Nuttall.

He also believes that, when a second operator enters the market, it will force Telkom to reconsider its price levels.

The company is already assisting Telkom in providing services to clients in areas where the latter does not have any suitable infrastructure.

“Eskom needed modern telecom for its substations in the Northern Cape and, although we have the infrastructure, according to law we cannot provide services to the electricity provider.” However, Transtel had to upgrade its outdated and obsolete analogue microwave service to Transnet’s Saldanha–Sishen railway line.

An STM-1 (155 Mb/s) digital microwave radio system was installed for prime user Orex, the Transnet division operating that railway line.

The main purpose of this service is to provide communications for train operations at stations and crossing loops along the route from the iron-ore mine at Sishen to the export harbour of Saldanha Bay. However, this user would not use the system to full capacity, and it was decided that Telkom would hire facilities from Transnet services and lease them to Eskom for a minor administrative mark-up.

The three parties agreed that section 44 of the Telecom Act allowed Telkom to use Transtel facilities to provide for the electricity provider’s needs.

As Transtel will earn revenue from the sale of these services to Telkom, the cost of providing the suitable STM-1 service to Transnet (and Telkom) also became economically viable.

The route is 800 km long, making this radio system one of the longest in the world.

The company is providing 27 E1 (2 Mbit/s) transmission links to Telkom for the electricity provider’s use in communicating with its substations in this area.

The services are valued at about R4-million a year.

Apart from the upgrade of telecom infrastructure on the iron-ore line, the company is also busy upgrading telecom services on the coal link stretching from Witbank, in Mpumalanga, to Richards Bay and Durban, in Kwazulu-Natal.

Alcatel Altech Telecoms and Bosch Telecom, as well as the company’s own technicians, are providing the technology for the system.

“We realised in 1990 that we had to extend our network to relieve pressures in the bigger centres.

“We have worked out a plan to upgrade the entire network, but will do it according to priority.

“We anticipate that the next part of the network that will need an upgrade is the one between Johannesburg and Cape Town.

“However, this will probably be done in various phases,” says Nuttall.

Apart from its activities in South Africa, the company also operates a number of networks in Africa, and provides a wide variety of information-technology-related products and services to the telecom industry.

During the past few years, the company has developed more than 200 high-sites countrywide that it uses for microwave radio transmission and for maintenance radio repeaters serving Transnet field staff.

It has operated plesiochronous digital hierarchy digital microwave systems since 1977, and last year commissioned an 800 km 155 Mb/s synchronous digital hierarchy system.

The traction masts of the 8 000 km of electrified railways are exploited to suspend optical-fibre cables economically and securely.

Systems operating at speeds of 622 Mb/s, equivalent to over 7 500 normal speech circuits, have been operational since 1993.

More than 10 000 devices are connected by various data networks. A wide-area network linking hundreds of local area networks (Lans) is being rolled out for South African Airways and Galileo SA at a rate of over 40 Lans a month.

Transtel operates a private automatic branch exchange (PABX) network with internal direct dialling and over 100 connections to the South African public switched telephone network.

Analogue exchanges have almost been eradicated, with more than 95% of the 60 000 ports now digital.

Ultramodern switches now in service provide a virtual nationwide PABX with integrated services digital network and advanced automatic distribution facilities.

Transtel has advanced radio skills, and has created a national network of radio repeaters for maintenance of track and pipelines.

It is about to extend this network to provide full coverage for Spoornet’s northern dc fleet, which will see radios permanently installed in all of its locomotives.

The company has also leased significant capacity on PanAmSat 4 and Intelsat 704, and has built an earth control station near Johannesburg.

It employs advanced compressed multiple-access technologies to realise voice and data communication capabilities.

Most of this business is conducted outside South Africa, where it is free of local legislation.

The company has established its competence as a data-network service provider, creating and operating frame relay and asynchronous transfer mode networks.

It will extend satellite communications capabilities, which are geostationary systems at present, to include low- and medium-earth orbit systems.

The company has assets of just under R750-million (US$150-million), and invests an average of R90-million a year on new and replacement infrastructure.

The company’s turnover is about R450-million a year, of which 80% is spent providing services to the Transnet businesses.
Edited by: System Author

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