Telkom South Africa Confirms Fixed Wireless Network rollout Plan using W-CDMA


Telkom has confirmed its plan to roll out a new wireless network with the prime aim of winning more business from small and medium-sized enterprises.

Telkom's relatively high prices for voice and data calls were inflating the day-to-day running costs for business clients, its chief of operations Motlatsi Nzeku admitted last week. It was also "acutely aware" of losing customers to the mobile networks as its own services were made unreliable because of copper cable theft, he said.

To resolve those problems a new network will be rolled out using W-CDMA a cost-effective wireless technology that offers high-speed data and video downloads as well as voice calls. One aim is to give small companies more affordable data packages for high-speed internet access.

The technology will initially provide voice and data services to fixed- line phones, but later this year Telkom will introduce new national numbers to use on cellphones, pitching it head-to-head with the cellular players. That is necessary as Telkom may soon shed its 50% stake in Vodacom, at a time when operators need to offer a blend of fixed and mobile services. The new network being installed by Huawei would also let it provide a wider range of products and services, Nzeku said.

CEO Reuben September said the move was part of an effort to grow its income. "Our revenues have been under significant pressure from declining voice services due to competition and are further affected by copper cable theft."

The services are being tested with customers in Gauteng, where 38 base stations have been erected. More than 200 should be operating by March next year.

Telkom is looking to outsource the running of all its networks, in a controversial plan invoking a threat of strike action by unions representing many of its 26,000 staff. It expects to save R1.3bn a year by outsourcing network maintenance, and negotiations are under way with several bidders.

Last week an insider said Amdocs had already been quietly selected to handle the billing and customer relationship management systems without the task being put out to tender. Amdocs is the world's largest billing and customer support software company by sales, and already supports some of Telkom's existing systems. Telkom would give Amdocs a new contract worth about US$70m to provide and maintain some IT systems for the wireless network, he said. But procurement managers had been instructed to encourage a second company to bid for the outsourcing tender so the process did not look like a done deal, he claimed.

The insider also alleged that HP had been identified as a preferred supplier for hardware to run some of the systems, and some rivals were not bidding as they realised they would not win.

Telkom executive for capability management Theo Hess said the new wireless network would be built and operated by Huawei, a market leader in the technology, and was not part of the general outsourcing deal. Huawei was also supplying the hardware for that network. Telkom was still awaiting proposals from several bidders to manage its other services, and no one entity was favoured.

Business Day