Photo by: Reuters
Local telecoms company Telkom says it hasn’t financially committed to a new African undersea cable despite signing a memorandum of understanding on the project.
On Monday, Hong Kong ICT firm PCCW released a statement saying that it along with Telkom, MTN, Saudi Telecom Company (STC) and Telecom Egypt (TE) signed a memorandum of understanding to build Africa-1.
The Africa-1 submarine cable broadband system is planned to stretch 12 000km from South Africa towards Saudi Arabia, Egypt and Pakistan. A construction and maintenance agreement is expected to be signed by June with the cable planned to go live in the third quarter of 2017, said the statement.
PCCW’s statement further quoted Telkom’s networking engineering and build managing executive as saying the cable would complement “existing high-bandwidth cable systems in the region” and “provide more diversity for the large volume broadband traffic from South Africa to the rest of the world”.
But Telkom has indicated it hasn’t fully committed itself to the cable.
“The Africa1 Group has been conducting preliminary talks with industry players to establish interest in a new undersea cable along the East coast,” Jacqui O’ Sullivan, Telkom’s spokesperson, told Fin24.
“Telkom has participated in these talks but has not committed to any investment in the initiative.
“We are always looking for ways to best collaborate within the industry but importantly, any such collaboration would have to be in a manner that added value to the business,” O’Sullivan said.
Meanwhile, MTN has not yet responded to Fin24’s request for comment on its involvement in Africa-1.
If the Africa-1 project goes ahead, it would join other subsea broadband cables such as Seacom, which landed on local shores in 2009.
Telkom job cuts
The announcement by PCCW regarding the Africa-1 cable comes after Telkom has been shedding jobs in South Africa in a bid to cut costs.
Earlier this month, Telkom confirmed to Fin24 that it received 1 629 applications for the company’s voluntary severance and early retirement packages.
The company has subsequently approved 73% of these applications, allowing for 1 184 people to exit Telkom, a company spokesperson told Fin24.
Telkom’s job cuts form part of its “turnaround” phase which was initiated last year.