Vodacom to join fibre network project in South Africa


Vodacom's board has finally given the operator approval to go ahead and join a project with MTN and Neotel to build a 5,000km national fibre backbone. Vodacom CEO Pieter Uys explained last night in a conference call to media that the company's joint shareholding had held it back from joining the project. He said the company's 50:50 ownership by SA's incumbent, Telkom, and UK-based telecoms giant Vodafone, had made a decision on the matter impossible.

However, with Vodafone set to gain the majority ownership of Vodacom in the next few months, the company has made a decision on whether to join its competitors. “We received board approval to go ahead and join the consortium. We are looking through the documentation and will make an announcement on the partnership at the pertinent time,” said Uys.

Mobile giant MTN and SA's second national operator, Neotel, signed a partnership agreement early this year to co-operatively build a national long-distance fibre-optic network that could cost between R1.7 billion and R2 billion.

The telecoms companies agreed to share the costs of trenching and project-managing the 5,000km network; however, they are expected to provide their own fibre and transmission equipment.

Almost all of the country's major telecoms companies have, individually, been frantically laying fibre cable in the metropolitan areas. This national network co-operation will be the first time the network operators work together to lay fibre.

Neotel and MTN have high expectations on the timelines for the national backbone, hoping to have it completed over the next two years. This timeframe could be revised when Vodacom joins the mix.

Without Vodacom, the first phase of the project, expected to begin in March, will be the national route from Johannesburg to Durban (including Pietermaritzburg), a total of 592km. This portion of the network will then be linked to Richards Bay, the landing point of many of the undersea cables. This segment is expected to take around seven months and will cost around R200 million.

This will give MTN access to Neotel's landing point for Seacom, scheduled to land in SA by June, and later to Eassy - estimated to land by 2010. While the companies have not stipulated the timelines for the rest of the phases, they hope to begin a Johannesburg-Cape Town leg after that, which would reach 1 676km.

Mobile operators are finding it harder to justify leasing the backhaul - or the ground-based technology that houses the wireless services - from Telkom. The laying of a national fibre network that each operator will control wipes out the need to lease infrastructure from the incumbent.

A partnership with MTN and Neotel will give Vodacom freedom from Telkom's ownership, as well as its backbone. Vodacom has not released any of the details around the impending agreement, so it is not clear whether it will receive the same benefits afforded to its competitors in the deal.