Telkom loses R192m internet connectivity deal in South Africa


The GEN3 contract has been awarded to Neotel and IS following a procurement process. This involved a call for expressions of interest and a request for proposal phase, in which proposals were invited from seven operators. IS, Neotel and Telkom responded to the invitation. Representatives of the institutions that Tenet acts on behalf of were heavily involved in the procurement process, says Tenet CEO Duncan Martin. Tenet runs a national research and education network (NREN) on behalf of 40 research and educational institutions in SA and surrounding areas. It is responsible for securing connectivity and associated services for the institutions it serves, and which control it. These institutions include all 23 of SA's universities.

The organisation utilised Telkom's services for its first two connectivity contracts (called Higher Education Internetworking Solution with Telkom and GEN2, respectively), both of which ran for relatively short periods (March 2001 to 31 December 2004, and January 2005 to December 2007). The procurement process this time was different, says Martin: “When we procured for the previous two contracts, there was only one game in town [Telkom], and this is no longer the case due to changes in the South African marketplace. Secondly, a worldwide movement called Research and Education Networking (REN) has taken off.

“In a nutshell, at a national level, research and educational institutions get together and form an NREN, which interconnects the member institutions with as big and fat pipes as they can afford. The NREN provides them with shared services, connections to each other and to other RENs. “Tenet has, since 2000, grown into being the South African NREN, and for the first time this has seriously impacted procurement. It meant that not only did we require Net access as cheaply as possible, but we also had to meet requirements that would enable us to fulfill the function of an NREN, notably to make and fulfill interconnections with other NREN's worldwide ourselves.”

Hence Tenet's procurement of layer 2 connectivity on the international circuits, and a gateway (from IS) that will be under Tenet's control and not the provider's.

IS, Neotel and Tenet are in the process of finalising a tripartite agreement in which the two service providers agree to collaborate with each other in the provision of services to the universities and research institutions through Tenet.