Thursday, July 24, 2008

South Africa - abandoning copper

Telkom moves to wireless

After losing millions to copper cable theft, fixed-line operator Telkom will turn to CDMA technology to reach homes from its backbone. However, it says this does not mean it is competing with the mobile players.

Speaking at this week's Internetix conference, hosted by Internet Solutions, Telkom chief of global operations Thami Msimango said Telkom had taken a beating financially by cable thieves and it had started looking at alternatives to copper to complete its last mile.

“We decided to fill the hole using wireless CDMA technology. Our network costs can not withstand the high levels of theft,” he added.

However, Msimango said, while Telkom was working closely with 50% subsidiary Vodacom, the wireless solution is not intended to be a competitive move against the mobile providers.

Over the 2007 financial year, Telkom lost at least R571 million to cable theft. In response to a question posed in Parliament, communications minister Ivy Matsepe-Casaburri revealed that the dual-listed telco spent R197.5 million on replacing copper cables and a further R5.5 million on fibre cables. The estimated revenue loss of this theft was put forward as R368.1 million.

Telkom has been working with the Non-Ferrous Theft Combating Committee (NFTCC), under the auspices of Business Against Crime, and the South African Police Services, as well as looking for a more sustainable solution to the theft problem.

Second national operator Neotel, Telkom's direct competitor, has been using CDMA technology as its last mile, both for consumer and enterprise services, since it completed its metro networks in Johannesburg, Cape Town and Durban.

It has also recently started rolling out WiMax and VectaStar technologies as an option for enterprise customers to connect to its fibre backbone. Neotel was granted spectrum by the Independent Communications Authority of SA on the 3.5GHz (commonly known as WiMax) and 10.5GHz (VectaStar) bands.

This spectrum was allocated as part of the operator's initial licensing conditions, which stipulated it would be licensed under conditions that are no less advantageous than Telkom's.

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