R/€ = 14.22
R/$ = 10.41
Au 1233.59 $/oz
Pt 1364.00 $/oz
Jul 05, 2002
R1bn SNO investment poised for take-offBack
Econet Wireless|Eskom|Eskom Enterprises|Lesotho Telecommunications|Siemens|Siemens Information And Communications|Siemens Information AndnCommunications|Siemens Telecommunications|Lesotho|Nigeria|South Africa|Network Operator|Private Networks|Telecommunications|Telecommunications Infrastructure|Telephone Facilities|Alwyn Martin|Transtel|Vusi Ngubeni|Fibre Optic
© Reuse this With a R1-billion investment, 30% shareholders to the second network operator (SNO) Eskom and Transtel have completed the infrastructure, which includes fibre optics and switching for the SNO to begin operating.
Eskom Enterprises executive director Vusi Ngubeni says that the Eskom/Transtel partnership will invest a further R1-billion into the SNO to boost a smooth take-off when it begins operations.
The investment excludes previous investments in telecommunications on private networks.
For the first time, Telkom will be facing competition from a rival and this will be the harbinger of many interesting developments as, for the first time in South Africa, there will no longer be a monopoly.
Ngubeni says that the SNO will focus on improving services in the rural areas by investing more in these areas, where more than 70% of the population currently does not have access to telecommunications.
"We would like to see more people in rural areas have access to telecommunications for educational, business and training purposes," he says.
He explains that the SNO will improve services and will provide the South African public with an opportunity of choice, thus providing more bandwidth than currently available.
Ngubeni insists that Eskom Enterprises telecommunications infrastructure is already placed throughout the country both in rural and urban areas.
However, he is quick to point out that the extension of the announcement of the 19% black-empowerment entity and the 51% private entity has allowed the present incumbent to lock business by entering into long-term contracts with customers.
The announcement of the company that would have a controlling stake in the SNO was expected in May, but will now only be announced in October, thus extending Telkom's monopoly for a further five months.
"Consequently, the delay creates a barrier to entry for the SNO and provides the incumbent with an advantage to lock up business," bemoans Ngubeni.
He has appealed to the Independent Communications Authority of South Africa (Icasa) to speed up the process or, alternatively, issue a preliminary licence to Transtel, Eskom and a black economic empowerment entity to begin operations.
"We were geared for the May announcements as investments were already in place, hence there is a need to begin sweating the assets," he elaborates.
Ngubeni is optimistic that the SNO will provide quality services, avail customers with a choice of service provider and provide telephone facilities on demand as opposed to so-called begging, noting that it will not force its customers to sign long-term contracts.
There has been scepticism from certain sources who believe that what happened with the cellular phone market, with Vodacom and MTN benefiting from keeping prices artificially high, will occur in this instance, with a duopoly simply replacing the current monopoly.
Nevertheless, Ngubeni states that duopoly is not the best form of competition, but can be viewed as a start to the move towards competition.
He observes that it is a natural process to first institute a duopoly and then liberalise the market fully later, adding that prices drop due to declines in the number of people using the services as they would be shared between the two service providers.
He notes that there is added value to services when they are available and cost-competitive.
Further, Ngubeni believes that to slowly build up a customer base depends on how fast and stable business areas are developed.
Nevertheless, he cautions that there is a need to create a steady balance between commercial business and social responsibility, hence the SNO will work on this policy by investing in the upliftment of rural areas.
Commenting on the ability of Eskom and its partner Transtel to sustain the SNO, Ngubeni boasts that the two firms have experience in telecommunications.
Furthermore, Eskom Enterprises and Siemens Information and Communications group have signed a R400-million contract for the roll-out of Eskom Enterprises' fibre optic network infrastructure.
The fibre optic network together with Eskom Enterprises' existing private telecommunications network infrastructure will create the platform for Eskom's participation in the SNO.
Fibre optic cable is already being deployed on the existing Eskom power-line infrastructure. The purpose of this contract is to procure, install and commission the additional telecommunications equipment necessary to complete the desired Next Generation Network solution. Network rollout began in January and was completed by the end of April, in time to connect the first customers shortly after the liberalisation of the fixed tele- communications network.
"Our joint vision is to provide innovative telecommunications solutions and premium customer services for the SNO," says Siemens Telecommunications CEO Alwyn Martin. He explained that Siemens began preparing for deregulation of South Africa's telecoms industry in the mid-90s. Ngubeni explains that Siemens was chosen by Eskom Enterprises over its competitors because of its integrated technology offering, its strong regional presence in South Africa and on the African continent, and its comprehensive telecommunications business solution ability. Currently, Eskom Enterprises, in partnership with Econet Wireless, owns 70% of Lesotho Telecommunications.
After a year of operations in Lesotho, the firm was granted a licence in mobile phones and launched Econet EZI-Cel in May this year.
With the current 10 000 cellphone subscribers in Lesotho, the firm is close to reaching its first-year target of 12 000 subscribers.
In Nigeria, it is also involved in a 50:50 joint venture with NEPA for the fixed-line telecommunications in that country.
Ngubeni believes that electricity and telecommunications work hand-in-hand to enable speedy development of any country.
Edited by: nkolola halwindi© Reuse this Comment Guidelines
Other Electricity News
Updated 3 hours ago Eskom recorded a profit of R12.24-billion for the six months ended September 30 but this will be eroded by maintenance costs, it said on Thursday. "The company has indicated, consistent with the seasonality inherent in the sales and maintenance profiles, that this...
Updated 2 hours 7 minutes ago The South African Nuclear Energy Corporation (Necsa) and its subsidiary Pelchem on Thursday launched Phases 3 and 4 of their multipurpose fluorochemical pilot plant (MFPP) at the Necsa site, in Pelindaba. Phases 1 and 2 of the project, aimed at producing commercial...
Updated 2 hours 29 minutes ago The resumption of trading in telecommunications group MTN’s broad-based black economic-empowerment (BBBEE) scheme – MTN Zakhele – has been delayed until December 17, as the group continued to add capacity and retest the system. The online trading platform,...
Updated 2 hours 36 minutes ago The South African Communications Forum (SACF) on Thursday praised Cabinet’s decision to include a control system for set-top boxes (STBs) in subsidised decoders. Cabinet on Wednesday put to bed the hotly contested issue of STB control by approving the use of a...
Recent Research Reports
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
Projects in Progress - Second Edition (PDF Report)
Creamer Media’s second Projects in Progress supplement considers some of the major project developments under way, including high-profile energy and transport projects, as well as a few of the lower-profile public and private developments. What remains apparent is...
Water 2013: A review of South Africa’s water sector (PDF Report)
Creamer Media’s Water 2013 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Canadian Mining Roundup for June 2013 (PDF Report)
The June 2013 roundup includes details of the development of TSX-V-listed Aldridge Minerals’ flagship Yenipazar polymetallic project, in Turkey; the Canadian Nuclear Safety Commission’s renewal of Cameco’s uranium mining licence pertaining to the Cigar Lake...
This Week's Magazine
As US car maker Ford on Thursday unveiled its new Mustang on the global stage, Ford Motor Company of Southern Africa (FMCSA) announced that local fans can look forward to seeing the iconic pony car in local showrooms in 2015. The new Ford Mustang has been redesigned...
MAN Truck & Bus South Africa (SA) has opened a new R180-million parts distribution centre (PDC) in Germiston, Gauteng. The new facility, located roughly four kilometres from the company’s Isando headquarters and the OR Tambo International Airport, has been designed...
Does crime, political enemies or shady business deals make you a little bit nervous? Looking for an armoured sports-utility vehicle (SUV)? Mercedes-Benz has the product for you. The new R2.3-million ML500 Guard vehicle has been unveiled in South Africa. The M-Guard,...
A joint venture (JV) company created by South Africa’s Denel defence industrial group and the United Arab Emirates (UAE) group Tawazun has won a R5-billion contract for precision guided munition (PGM) systems for the UAE Air Force. The JV is Tawazun Dynamics and it...
A dry flue-gas desulphurisation (dry FGD) system uses a lime-based reagent to remove sulphur oxides (SOx) from the flue gases of any combustion installation without using water, says gas and energy specialist engineering company Tractebel Engineering South Africa...